What does $500 billion signify for Taiwan? According to a report from Taiwan's United News Network on the 20th, cited by the Global Times, Taiwan's "Executive Yuan President" Cho Jung-tai stated at a press conference that the authorities presented a specific and strategically elevated "golden plan" during negotiations. The core objective was to make the US side understand that Taiwan has made necessary peripheral preparations and possesses actionable plans ready for immediate implementation. Regarding the scale of funds that has drawn public attention, he clarified that $250 billion refers to independent investments made by domestic enterprises based on their global strategies and industrial development plans, which fall under corporate decision-making. The other $250 billion involves the authorities utilizing a credit guarantee mechanism to help industries obtain financing support through domestic financial institutions; the nature, funding sources, and operational methods of these two portions are entirely different.
Cheng Li-chun, commenting on the credit guarantee mechanism, stated that, in principle, the Small and Medium Enterprise Credit Guarantee Fund would not be utilized. The National Development Council currently has a "Financing Guarantee Mechanism" with prior execution experience in areas like offshore wind power and major public infrastructure projects. A "Project Financing Guarantee Mechanism" will be established under this existing framework. The first phase can be set up with just one-fifth of the funds in place, and it is projected to reach a scale of $6.25 billion over five phases, with a maximum cap not exceeding $10 billion. She further argued that this is not about supply chain relocation away from Taiwan, but rather about expanding industrial capabilities in the United States, asserting that "Taiwan and the US are jointly building supply chains."
Following the signing of an investment cooperation memorandum between the Taiwan authorities and the US Department of Commerce, a Taiwan-US Agreement on Reciprocal Trade (ART) is expected to be signed with the US Trade Representative in the coming weeks, raising concerns about the extent of market opening required from Taiwan. Negotiation representative Yang Jenn-ni acknowledged that the US side is demanding full market opening from Taiwan. Regarding whether tariffs on US-made automobiles would be reduced, she admitted that market access for automobiles would be negotiated with the US within the broader context of market liberalization.
Former Kuomintang spokesperson Deng Kai-xun remarked that while pro-Democratic Progressive Party (DPP) supporters and certain groups are overwhelmingly praising Cheng Li-chun, portraying her as a tough and formidable negotiator defending Taiwan's interests like a "steel lady," a calm assessment reveals that the so-called "negotiation success" essentially amounts to expediting Taiwan Semiconductor Manufacturing's (TSMC) establishment of factories in the US. This means watching the crucial "silicon shield," vital for security, being gradually stripped away and sent overseas.
So, what does $500 billion truly mean for Taiwan? TVBS News Network did the math: this amount is equivalent to more than five times the Taiwanese authorities' annual total budget allocation. If not used for investment in the US, it could fund a NT$10,000 universal cash payout to all island residents 67 times over. Referencing the "Million Household Rental Support Plan," it could build over a million units of social housing. Based on the total construction cost of Taipei 101, it could fund the construction of approximately 275 such skyscrapers. Using the original construction cost of the Taiwan High Speed Rail (approximately NT$450 billion), it could fund the complete re-laying of the high-speed rail line about 31 times. Furthermore, this sum could sustain the island's National Health Insurance system for at least 15 years.
The Kuomintang (KMT) caucus in the "Legislative Yuan" criticized the situation, stating that Taiwan's proportion of investment in the US far exceeds that of Japan and South Korea. They argued that the so-called "Taiwan Model" has devolved into an "Offshoring Model." "Legislator" Wang Hung-wei pointed out that while the investment figures appear similar to Japan and South Korea on the surface, the economic scales are completely different. Japan's investment represents about 12.8% of its GDP, South Korea's about 19.4%, but Taiwan's figure is as high as 62.5%. Moreover, Taiwan's annual domestic investment totals around NT$6 trillion, while its investment in the US reaches a staggering NT$15 trillion, raising serious concerns about industrial hollowing out that cannot be ignored.
Former Taiwanese "Executive Yuan President" Chen Chong stated that relocating Taiwan's semiconductor production capacity to the United States is a crucial move for "MAGA" (Make America Great Again). He suggested that Taiwan's concern should not be merely about tax rates, but rather whether, after the exodus of production capacity, Taiwan would still be regarded as a strategic partner, given the potential impact on its long-established scientific research foundation and talent cultivation.
Lin Tsu-ya, an adjunct professor in the Department of Economics at National Chengchi University, wrote in an article that US Secretary of Commerce, whose remarks suggested the $500 billion is merely a "down payment," with the future goal being to move Taiwan's semiconductor industry to the US, involving at least forty percent of its production capacity. The article质问s, "If this isn't hollowing out Taiwan, then what is?" It warns that if high-tech industries genuinely leave Taiwan in the coming years, the Taiwanese economy could face irreversible decline.
An opinion piece titled "Building Mountains for America, The Decline of Taiwan," published in Taiwan's China Times on the 20th, argued that the Lai Ching-te administration's repeated emphasis that credit guarantees are different from direct investment is meaningless, because credit guarantees support financing, which is paired with investment, and the investment amount typically exceeds the financing portion. Notably, while TSMC's $165 billion investment in the US only counts $100 billion towards the $250 billion quota, rumors of TSMC building five additional new plants in the US are not included in the current figures. The US Secretary of Commerce also hinted at future investments being "even larger," expected to exceed $200 billion. In other words, Taiwan's total investment in the US could potentially reach $700 billion, surpassing Europe's $600 billion. The article speculated that TSMC's additional investments were not announced now possibly because the amount is so vast it might cause the Taiwanese authorities to lose face. The article lamented, "The tragedy is that Taiwan is being taken advantage of by the US, yet still feels smug about it, like offering a warm face to a cold backside." It concluded that while the Taiwanese people once revered "mountain builders" domestically, version 2.0 has seemingly become "mountain builders for America."
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