Numbers Reveal How U.S. Plans to Squeeze Taiwan Dry
The Storm Media Editorial, August 5, 2025
In the foreseeable future, Taiwan will face a grueling and drawn-out tariff negotiation with the United States. A glance at a few key figures reveals that Washington’s demands on Taiwan amount to what can only be described as harsh and outrageous. Ultimately, both the government and the public must confront a single question: How high a price is Taiwan willing to pay in exchange for a U.S.-granted tariff rate of 15 percent?
The United States has imposed a 20-percent reciprocal tariff on Taiwan—down 12 percentage points from the 32 percent announced on April 2. Yet, the real significance of any tariff level lies in comparison, particularly against neighboring and major competitor economies. Japan and South Korea enjoy a 15-percent rate; Vietnam, 20 percent; Indonesia, Thailand, Malaysia, and the Philippines, 19 percent; and Singapore, just 10 percent. By comparison, Taiwan’s rate places it at a clear disadvantage.
Why has Taiwan failed to reach an agreement with Washington, leaving the tariff at 20 percent? While officials have revealed nothing, cases involving Japan, South Korea, and the European Union allow for reasonable inferences about U.S. conditions.
Before reaching trade deals with Washington, President Donald Trump of the United States set tariffs at 25 percent for Japan and South Korea, and threatened 30% for the EU. After agreements were struck, all were reduced to 15%—but not without heavy costs. The EU pledged to purchase $750 billion of American energy over three years and invest $600 billion in the United States; Japan committed $550 billion in American investments and $100 billion in natural gas purchases; South Korea pledged $350 billion in investments and $100 billion in American energy imports.
From these cases, it becomes clear that the Trump administration applied a basic “standard package” to advanced economies with large trade surpluses with the United States: Commit to massive “invest in America” and “buy American” programs, typically amounting to hundreds of billions of U.S. dollars, in exchange for the 15-percent tariff rate. Additionally, without exception, all countries agreed to zero tariffs on American imports and the removal of all trade barriers.
Thus, earlier claims by some scholars that the U.S.-Taiwan talks stalled over American beef, pork, or auto tariffs appear unlikely. Those issues are essentially “non-negotiable”—if Taiwan insists on maintaining its 17.5 percent auto tariff or blocking American agricultural products, talks would collapse outright. The real sticking point is almost certainly the scale and terms of Taiwan’s “invest in America” commitments.
Bloomberg has reported some details: Taiwan was willing to pledge $300 billion in U.S. investments, but Washington was dissatisfied, reportedly pushing for parity with Japan—$550 billion, or even $600 billion by some accounts. One report claimed the United States also wanted Taiwan to contribute $300 billion toward SoftBank founder Masayoshi Son’s “Crystal City” AI park project in the United States.
If true, this explains why Taipei refused. Such demands reveal that the Trump administration’s expectations for Taiwan border on exploitative. American media outlet Politico vividly described Washington’s negotiators as “squeezing Taiwan like a lemon,” capturing the tenor of the talks.
The scale of these demands is stark when viewed in numbers. Japan was forced to “invest in America” to the tune of $550 billion—but Japan’s economy, with a gross domestic product (GDP) of $4.026 trillion, is the world’s fourth largest. Taiwan’s GDP is roughly $800 billion—only 20 percent the size of Japan’s. Why, and by what misfortune, is Taiwan being pressed to match Japan’s contribution?
Even South Korea, with a GDP of $1.7 trillion—twice Taiwan’s—was pushed into a lower U.S. investment pledge of $350 billion. In plain terms, compared with Japan and South Korea, Taiwan is a “smaller, leaner” player, yet Washington seeks to extract more oil and carve out a larger share of flesh.
Taiwan’s plight, and the urgency of America’s pressure, are plain to see.
Worse still, if the mandated investment were fully under Taiwan’s control and potentially profitable, the situation might be tolerable. But according to media reports, the United States wants Taiwan to put $300 billion into the Crystal City AI park project—a venture with a high risk of turning into a financial black hole.
Proposed by Masayoshi Son, the plan envisions a Shenzhen-style technology manufacturing hub to bring high-tech production back to the United States, with a total projected investment of $1 trillion. The goal is to attract companies such as the Taiwan Semiconductor Manufacturing Company (TSMC), NVIDIA, and Samsung. Unveiled to the public only in June, the project remains rudimentary. Most experts consider reshoring manufacturing to the United States either impossible or unfeasible.
From another perspective, the initiative may be Son’s way of appealing to Trump to secure favor—and funding. While Son once enjoyed a stellar investment record, his $100 billion Vision Fund has suffered repeated, even notorious, losses in recent years. His reputation has faded. If Taiwan pours $300 billion into the Crystal City project, the outlook would hardly inspire confidence.
As Taiwanese society grasps the severity of American demands, skepticism toward Washington is likely to grow. The Lai administration’s total silence on the talks and American conditions may be partly explained by this. In the end, Taiwan will have to confront a painful choice: How much is it willing to pay to bring the tariff rate down to 15 percent?