TSMC Shares Dip After Trump Declares Taiwan Should Pay US For Defense

Former president Donald Trump made a bombshell statement, saying that Taiwan would have to pay for the defense provided by the U.S., because, after all, the Asian nation "doesn't give us anything." This statement subsequently caused shares of Taiwan Semiconductor Manufacturing Co Ltd (TSMC) to slip on Wednesday.

Trump was interviewed by Bloomberg Businessweek, and his responses were published on Tuesday.

One of the questions posed to Trump was whether he would defend Taiwan against China, eliciting his iconic line, "Taiwan should pay us for defense."

He then compared the U.S. to an insurance company, saying that the country does not benefit from defending Taiwan, Reuters reported.

One may recall that President Joe Biden has previously made comments about the China-Taiwan issue, implying that in the event Beijing makes a move on Taiwan, the U.S. would come to its defense. This position deviates from the country's long-standing "strategic ambiguity" stance.

Trump noted that he knew the "people" very well and accorded them great respect. However, he admitted that the Chinese took 100% of the chip business in the U.S. Hence, he believes that Taiwan should pay for defense.

Trump's comment, as a Republican, seemed to point to Taiwan's semiconductor industry, which, according to CNBC, is considered among the most advanced in the world.

TSMC is now recognized as the largest and most advanced chipmaker in the world. It manufactures essential chips for Apple and Nvidia, CNBC reported.

In response to Trump's comments, Taiwan Premier Cho Jung-tai said that while the U.S. and Taiwan may not have formal ties, he underscored the good relationship between the two countries.

"Taiwan has steadily strengthened its defense budget and demonstrated its responsibility to the international community," he mentioned to reporters in Taipei.

"We are willing to take on more responsibility; we are defending ourselves and ensuring our security."