China says trade deal with U.S. will ‘drain Taiwan’s economy’ for American benefits

China has expressed strong disapproval of the recent trade deal between Taiwan and the U.S., claiming that it will only benefit Washington at the expense of Taiwan’s economic interests. The agreement, which saw U.S. tariffs on Taiwan’s exports reduced to 15%, involves Taipei committing billions of dollars in additional investments in America.

Peng Qingen, a spokesperson for China’s Taiwan Affairs Office, criticized the deal for allegedly undermining Taiwan’s industrial strength and allowing the U.S. to hollow out the island’s key industries. Beijing had previously stated its firm opposition to agreements between Taiwan and countries that have diplomatic ties with China, urging Washington to adhere to the “one-China principle.”

Taiwanese companies have pledged significant investments in the U.S., with plans to build and expand tech operations, including chip and AI manufacturing. Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, has committed to investing $165 billion in chip fabrication facilities in the U.S. The goal is to bring 40% of Taiwan’s semiconductor supply chain to America.

Despite China’s criticism, Taiwan remains a dominant player in global chip production, with TSMC producing a large portion of the world’s advanced chips. The island’s strategic importance in the semiconductor supply chain has made it a focal point for the U.S. and its allies in preserving its autonomy against potential Chinese aggression.

The trade pact between Taiwan and the U.S. deepens their ties at a time when China is increasing pressure on the island. While experts believe that the deal may not fully reduce Washington’s reliance on Taiwan’s advanced semiconductors, it underscores the importance of diversifying the semiconductor supply chain and strengthening national security priorities.

In conclusion, the trade deal between Taiwan and the U.S. has sparked controversy and criticism from China, but it also highlights the strategic significance of Taiwan in the global semiconductor industry. The partnership between Taiwan and the U.S. aims to strengthen technological capabilities and bolster economic cooperation in the face of growing geopolitical tensions.