Highlights

Taiwan's President, Lai Ching-te, emphasizes the importance of collaborating with Japan and the US to establish a 'non-red supply chain' that excludes China. Highlighting semiconductors and AI as pivotal industries, Taiwan seeks Japan's support to join the CPTPP. Lai also addresses the impact of China's unfair trade practices and highlights the importance of a resilient democratic-led semiconductor ecosystem.

Sentiment Analysis

• The sentiment of the article is predominantly positive, focusing on international collaboration and strategic partnerships.
• The tone is optimistic about building robust supply chains and maintaining free trade globally.
• There's a cautious undercurrent regarding geopolitical challenges and trade tensions, particularly with China.

Article Text

In a recent interview with Nikkei Asia, Taiwan's President Lai Ching-te expressed strong intentions to collaborate with Japan and other democratic nations to form a strategic 'non-red supply chain' excluding China. The focus will be on developing semiconductor and AI industries, which play critical roles in combating China's unfair trade practices. President Lai highlighted Taiwan's desire for Japan's backing in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and emphasized the crucial role that Japan, Taiwan, and the United States could play in constructing a robust and resilient supply network in the face of China’s practices.

Lai criticized China's strategy of undercutting global markets with low-priced goods, undermining the free trade ecosystem. He emphasized that democratic nations have a collective responsibility to defend the existing trade rules and values. Taiwan, with its advanced manufacturing capabilities, along with Japan's material and equipment manufacturing strengths and the US's prowess in IC design, could lead a semiconductive ecosystem resistant to China’s economic encroachments.

He called upon Japan to take a more assertive leadership role within the Indo-Pacific region amid increasing authoritarian pressures, and advocated for intensified economic collaboration between Taiwan and Japan. Such alliances could foster a more resilient and politically stable supply network.

Addressing US policies like former President Trump's tariffs that affected semiconductors, Lai acknowledged the challenges posed by the 32% tariffs. He reiterated Taiwan's commitment to negotiating lower tariffs and resolving trade barriers to correct the trade imbalance with the United States, further illustrated by Taiwan Semiconductor Manufacturing Company's (TSMC) investment in US facilities.

Regarding potential semiconductor tariffs, Lai assured that TSMC's strategic investment decisions are based on customer needs rather than tariffs, indicating a willingness to continue US investments despite such economic measures. He warned that punitive tariffs on Taiwanese tech exports could hinder Taiwan's semiconductor and ICT industry's investment in the US.

Lai detailed that 65.4% of Taiwan's exports to the US involve information and communication products and electronic components essential for giants like NVIDIA, AMD, and Apple — not consumer goods — suggesting these exports are vital for the US's industrial and AI ambitions. He reiterated Taiwan's intent to increase defense spending and military procurement to ensure regional stability, which aligns with expectations from the US administration.

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