Silicon Shield Thins: Where is the U.S.-Taiwan "Win-Win"？
United Daily News Editorial, January 17, 2026
After eight months of negotiations, the outcome of the U.S.-Taiwan tariff negotiations has finally been revealed. On the surface, Taiwan secured the same 15 percent non-cumulative tariff treatment as Japan and South Korea, and obtained most-favored-nation tariff arrangements for certain automobiles, aviation components, and wooden furniture under Section 232. In exchange, however, Taiwan’s government must assist domestic companies in investing up to US$250 billion in the United States and provide credit guarantees to support financial institutions in extending loans to Taiwanese firms investing in the United States, also amounting to as much as US$250 billion.
Following the announcement, President Lai immediately framed the outcome as a “win-win” for Taiwan and the United States, saying the agreement would deepen bilateral economic and trade cooperation and drive shared prosperity. Vice Premier Cheng Li-chun, Minister of Economic Affairs Kung Ming-hsin, and several ruling-party legislators also expressed optimism, describing it as a major advancement in U.S.-Taiwan relations.
However, does this so-called “win-win” truly stand up to scrutiny and earn public recognition? In normal international trade negotiations, a win-win outcome should not be a political slogan, but rather be grounded in reciprocal rights and obligations, a reasonable sharing of risks, and long-term benefits that outweigh short-term costs. This U.S.-Taiwan agreement appears far more like a one-sided concession under pressure from President Donald Trump of the United States than a mutually beneficial arrangement.
Since returning to the White House, Mr. Trump has clearly reverted to an “America First” unilateralist trade approach. His reciprocal tariff policy, proposed last year, uses goods trade surpluses as the sole benchmark, treating countries with large surpluses vis-à-vis the United States as “free riders” and demanding rebalancing. Yet this framework deliberately ignores long-standing and substantial American surplus in services trade, depriving the so-called “reciprocity” of economic theory and international trade law legitimacy, and instead reflecting the arrogance of a great power using tariffs as tools of political and industrial policy.
Under this unequal negotiating structure, Taiwan’s ability to secure the same non-cumulative tariff treatment as Japan and South Korea does reflect the efforts of its negotiating team. But simplifying this result into “Taiwan also wins” is not only naïve, it risks obscuring the long-term impact of American tariff policy on Taiwan’s industrial structure and economic sovereignty.
The critical turning point came with remarks by U.S. Secretary of Commerce Howard Lutnick. After the results were announced, he bluntly stated that the United States had indeed negotiated with a “big stick,” not carrots, and made it clear that Taiwan must make Trump “satisfied.” That satisfaction points directly to the Taiwan Semiconductor Manufacturing Company (TSMC) and the broader semiconductor supply chain expanding investment in the United States, with a concrete target: before the end of Mr. Trump’s term, 40 percent of Taiwan’s semiconductor supply chain and capacity is to be transferred to American soil.
Such a “bloodletting” outflow is no small matter for Taiwan. TSMC’s market capitalization accounts for over 43 percent of Taiwan’s stock market, and together with its upstream and downstream supply chains forms the strategic lifeline of Taiwan’s economy. If, under American pressure, as much as 40 percent of capacity is moved to the United States, then even if the government insists this is “expansion” rather than “relocation,” it is difficult to dispel public concerns: Taiwan is gradually losing its central position in the semiconductor industry, shifting from a “Taiwan model” to a forced “hollowing-out model.”
Moreover, Taiwan’s pledged investment scale in the United States carries significantly asymmetric risks. Japan and South Korea have committed US$550 billion and US$350 billion respectively, amounts that account for only about 10 percent of their gross domestic products (GDP); Taiwan’s pledged investment, however, exceeds 50 percent GDP, posing a clearly higher risk. Many details of the negotiations remain undisclosed, such as: What role does the government play in the two US$250 billion investment arrangements? Will the credit guarantee mechanism transfer risks to taxpayers? Will further market opening be required in the future, such as lowering tariffs on imported automobiles? All of these will affect Taiwan’s long-term industrial and fiscal stability.
Mr. Trump’s negotiating style has always been about “I am satisfied,” not “mutual benefit.” Taiwan may have been unable to resist certain pressures in the talks, but this by no means justifies the government portraying the outcome as “win-win.” Honestly informing the public of the costs and risks to be borne is far more important than papering over reality.
What Taiwan needs is not a sugar-coated narrative of victory, but a clear national industrial strategy: how to maintain economic and trade relations with the United States while ensuring that the semiconductor industry remains rooted in Taiwan, preserving critical technological advantages, and avoiding excessive dependence on a single market. Otherwise, the so-called “win-win” may turn out to be merely U.S. satisfaction at Taiwan’s expense.