A large screen shows a news report on China’s Justice Mission 2025 military exercise around Taiwan, December 30, 2025, in Beijing, China.
Tingshu Wang | Reuters
China has criticized the trade deal between Taiwan and the United States agreed last week, warning it would destroy the island’s industrial power and benefit Washington.
The trade agreement reduced US tariffs on Taiwanese exports to 15%, and Taipei has invested billions in additional American investment.
Peng Qinggen, a spokesman for China’s Taiwan Affairs Office, said of the agreement on Wednesday “It will only destroy Taiwan’s economic interests,” Taiwan’s ruling party criticized the Democratic Progressive Party for allowing the US. “hollow out” the main branch of the island. That’s according to CNBC’s translation of his Mandarin words.
Beijing last week said China was “absolutely opposed” to agreements between Taiwan and countries with diplomatic ties to Beijing, urging Washington to adhere to the “one China principle”.
China considers the democratically-governed Taiwan to be its territory, and Chinese President Xi Jinping is considering its reunification with the mainland.”historical desperation.” Taiwan denies the claims.
Taiwanese firms are investing $250 billion in direct investment in the U.S. to build and expand technology operations such as chips and AI. The Taiwanese government has also promised Guarantees $250 billion As a loan to chip and technology companies to further expand their manufacturing capacity in the US
Taiwanese companies will also enjoy high quotas for tariff-free imports sent their chips to the US
In return, Washington reduced tariffs on many goods from Taiwan to 15% from 20% and waived tariffs on generic drugs and ingredients, aircraft components and natural resources unavailable domestically.
The goal is to bring 40% of Taiwan’s semiconductor supply chain to the US, Trade Secretary Howard Lutnick told CNBC on Thursday.
Taiwan Semiconductor Manufacturing Company, the world’s largest contract chipmaker, has pledged to invest $165 billion in US chip manufacturing and processing facilities, as well as a research and development laboratory. This is the company reported planning to build 4-6 more factories and increase the total number to more than 10.
On Wednesday, Beijing said the U.S “Using Taiwan to Contain China”, TSMC’s US factory claims that its labor costs are double that of its Taiwan factory.
TSMC did not immediately respond to CNBC’s request for comment.
DPP wants TSMC to “significantly increase its investment in the United States and create high-paying jobs for Americans, which will uproot the island’s industries,” Peng said.
Analysts noted that a deal is unlikely Washington has been completely removed from Taiwan cutting-edge semiconductors soon, as Taipei has pursued a policy of keeping its most advanced technology at home.
When asked about Lutnick’s statement, Taiwan’s Vice Premier Cheng Li-chung said it was not up to Taiwan alone to achieve the US national security priority of 40% domestic chip self-sufficiency, adding that US chip giants and other countries were also part of the plan.
Taiwan dominates global chip manufacturing, produced by TSMC most advanced chips in the world. It accounts for about a third of global demand for new computing power evaluated Taiwan welcomes.
The island’s central role in the global semiconductor supply chain has also made maintaining its virtual autonomy against any Chinese incursion a strategic priority for the US and its allies.
The pact deepens the Trump administration’s ties to Taipei as China steps up pressure on the island.
