Taiwan proposes strategic tech alliance with the White House — "Taiwan Model" would help companies invest easily in the U.S. to satisfy demands

The U.S. and Taiwan have been engaged in months-long bipartisan trade talks since the Trump administration took over, negotiating largely around the tech both countries hold. According to Bloomberg, the latest progress stemming from these discussions is a potential new high-tech strategic partnership dubbed the "Taiwan Model" by Vice Premier Cheng Li-chiun, that would involve Taiwan striking a balance between domestic importance and foreign soil influence. The deal largely echoes prior developments between the two nations and hasn't been formalized yet.

The Taiwan Model, put forth by a delegation sent to the U.S. during September 25-29, is essentially a proposal to keep the U.S. happy while ensuring that most of Taiwan's chip production remains in the country. Vice Premier Cheng-Li-chiun led the envoy, saying that this alliance will help Taiwanese companies invest in America easily, letting the firms themselves choose how/where to put their money.

Taipei will provide export credit guarantees and an investment insurance scheme that would make it less risky for local businesses to invest in the United States. The country will also share its extensive experience in building science parks, allowing the U.S. to strengthen its own. In exchange, the U.S. will offer land, visas, and improved regulations to assist the effort.

Both countries hold immense importance for each other, especially amidst the AI boom. Cheng says the Taiwan Model received a positive response from officials, a promising sign following the country's flat-out rejection of a proposal that Taiwan should move 50% of its chip manufacturing to the U.S. Taiwan says it will not agree to such a move, which was one of the more controversial proposals floating around.

Washington has been on a run to fortify local chip manufacturing with various proposed and enacted policies, the most recent of which is the 1:1 rule, where chipmakers would have to make one chip in the U.S. for each chip imported from abroad to avoid 100% tariffs. Taiwan's semiconductors are already exempt from the 20% "reciprocal" tariffs imposed on the country, but it wants to extend this leniency across the board with the Taiwan Model, seeking to decrease these taxes overall. It also wants the U.S. to make visa procurement easier for Taiwanese nationals and aid them in acquiring land, along with relieving regulatory protocols.

Despite TSMC being heavily invested in Arizona with plans to manufacture even more high-end nodes there, Taiwan has previously made it clear that it will keep cutting-edge production local to its borders — which are only 80 miles from mainland China — a pledge that worries U.S. officials. Commerce Secretary Howard Lutnick recently expressed these concerns in an interview: "The Chinese have said, 'we’re going to take Taiwan.' They’re not even shy about it." Lutnick also teased a new semiconductor deal with Taiwan that was close to being finalized; whether this delegation has cut through the red tape to catalyze that remains to be seen.

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