US-Taiwan Trade
On 8 September in an interview with Bloomberg, Taiwan’s de-facto ambassador to Washington HSIAO
Bi-khim said Taiwan’s semiconductor companies are holding back their investments in the US because
of “unreasonable and unfair” double taxation. Hsiao alleged that Taiwanese firms are paying three times
more than competitors from other major US trading partners. Hsiao said this issue is “an absolute priority” and that she is optimistic Congress will resolve it before the end of the year. Hsiao is considered as a likely running mate for ruling DPP presidential nominee William Lai in 2024.
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In 2020 Taiwan’s largest semiconductor company, TSMC, agreed to build cutting-edge fabrication plants in Arizona, but its goal to have the first plant operational in 2024 has been postponed to 2025 due to cost increases and skilled labor shortages. The project’s cost has jumped from the original budget of $12 billion to $40 billion. TSMC is expecting the US government to provide $15 billion in subsidies under the US CHIPS and Science Act, which sets aside $280 billion in funding for chip
manufacturing and research in the US and offers a 25% tax reduction
In August the US and Taiwan held a second round
of negotiations for their Initiative on 21st Century
Trade, focusing on agriculture, labor practices, and
environmental protection. The US Senate Committee
on Finance said it plans to work on a Taiwan tax bill in September.
Cyberespionage
On 5 September Microsoft reported that China is
using AI on social media platforms to influence US
and Taiwan voters. Chinese operations on YouTube,
Facebook, TikTok, and X are only expected to increase with the presidential elections in the US and Taiwan next year.
The Microsoft report identified Chinese hacker
groups Flax Typhoon and Charcoal Typhoon as the most prominent hacker groups targeting Taiwan, hitting government agencies, educational institutions, telecom, IT, and high-tech sectors, as well as energy infrastructure hubs.
Flax Typhoon was found to be using a custom-
made virtual private network to “directly establish a presence within the target network.” The report said, “We can expect wider cyberespionage against both opponents and supporters of China’s geopolitical objectives on every continent."
- China’s embassy in Washington responded
to the Microsoft report, saying it was “full of
prejudice and malicious speculation
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