Despite ongoing US-Taiwan tariff negotiations showing no significant progress, Taiwan's semiconductor industry has not yet been affected by the "Section 232" tariffs targeting electronics. According to recent data, Taiwan's information and communication technology (ICT) and electronics exports to the US have continued to grow at double-digit rates, even as US manufacturing has contracted for nine consecutive months under President Donald Trump's administration.
Key Taiwanese companies such as TSMC and Foxconn have expanded investments in US manufacturing operations aligned with the "Made in America" initiative. Nonetheless, critical chip production and AI server hub activities primarily remain in Taiwan. The Taiwanese Executive Yuan has proposed a "Taiwan model" emphasizing four principles: allowing companies to plan industrial investments autonomously, enhancing government financial support through credit guarantees, leveraging Taiwan Science Park expertise to foster US industrial clusters, and seeking US assistance with infrastructure, visas, and regulatory facilitation.
In contrast to Taiwan's strong export performance, US manufacturing has faced ongoing contraction, reflected by the Institute for Supply Management's manufacturing PMI falling to 48.2 in November 2025—the ninth consecutive month below the 50-point expansion threshold. This contraction encompasses declining new orders, employment, and supplier delivery indexes. The Taiwan Institute of Economic Research (TIER) identified these metrics as evidence of persistent shrinkage amid tariff-induced uncertainties.
Furthermore, reports cite a surge in US corporate bankruptcies since Trump assumed office in early 2025, reaching a 15-year high with over 700 companies filing for bankruptcy protection from January to November 2025. Elevated borrowing costs and increased import prices attributed to tariffs have disrupted supply chains and raised operational costs, challenging the viability of many US businesses.
Although tariffs have minimally impacted US semiconductor and AI server imports, several Taiwanese manufacturers report substantially higher operating expenses when producing in US plants. This has led to calls for careful assessment of cost implications before further investment decisions are made.
Article edited by Jerry Chen
