ISSUE 307                                                                                                August  11, 2025
Tariff Storm: Taiwan Trapped in Strategic Dilemma 
● This Week in Taiwan: 
Other Important Events This Week




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The United States is pressuring Taiwan to invest heavily in exchange for tariff reductions. The extreme conditions, likened to squeezing a lemon, have sparked skepticism towards the U.S.
Featured Editorial

Numbers Reveal How U.S. Plans to Squeeze Taiwan Dry 

 

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? 
Featured Commentary
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TSMC's 2nm technology theft may involve the U.S.-Japan alliance. The incident could undermine U.S.-Taiwan cooperation and Taiwan's leadership in the semiconductor industry. 

TSMC's 2nm Leak: Test for U.S.-Japan-Taiwan Semiconductor Cooperation 

 

President Donald Trump has announced that the Taiwan Semiconductor Manufacturing Company (TSMC) will invest $300 billion in the United States, a move that may be linked to U.S.-Taiwan tariff negotiations, though the outlook is far from optimistic. An even greater crisis, however, is the theft of TSMC’s 2-nanometer chip manufacturing process. While the case is being prosecuted under Taiwan’s National Security Act, the key question is the identity of the shadow player — and it is possible the Lai administration will not dare pursue the matter to the very end. 
Featured Opinion
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The German Institute Taipei is accused of double standards. It condemned the opposition in Taiwan for referencing Nazis, yet turned a blind eye when an ally of the ruling party seriously studied Nazi tactics.

Who Gets to Imitate the Nazis? The German Institute Taipei's Jaw-Dropping Double Standards 

 

If you recall this past May, Chairman Eric Chu of the Kuomintang (KMT) inadvertently touched a raw nerve at the German Institute Taipei. Simply by likening those in power to a Nazi regime and comparing the opposition’s plight to the twilight of the Weimar Republic, he was met with a public, scathing rebuke. The German Institute sternly reminded Taiwanese that they must “never compare themselves to the Nazis,” invoking historical trauma and political morality with heavy-handed admonitions. At the time, many believed the German Institute was defending a historical red line and safeguarding global democratic values. 
This Week in Taiwan
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The Executive Yuan’s Office of Trade Negotiations has confirmed that Taiwan’s tariffs on U.S. goods will be imposed on a cumulative basis, pushing traditional industry rates close to 30%. Business groups fear this could trigger a wave of unemployment.

August 4:

Minister of Economic Affairs Kuo Jyh-huei met with traditional industry representatives to discuss U.S. reciprocal tariffs. He mentioned that investments in the United States could reach $400 billion and asked, "Should the Republic of China invest directly, or should funds be raised privately?" The Ministry later clarified that Kuo was merely giving an example and that the government has no concrete investment commitments or ongoing negotiations. 

 

August 4:

A civic group pushing to recall a Kuomintang (KMT) legislator was accused of emulating Nazi tactics. Influencer "Minnan Wolf" alleged that fellow activist "Ba Jiong" studied Nazi crowd manipulation, proposed new hand gestures, and suggested forming a "Nazi Stormtrooper" unit to launch a revolution. Even the recall rally's visual symbols referenced the Nazi eagle. Ba Jion claimed it was just self-deprecating humor. The German Institute Taipei's Facebook page was flooded with comments demanding strong condemnation. 

 

August 4:

The Ministry of the Interior announced a rule change requiring mainland Chinese applicants for residency to submit notarized proof that they have not applied for or have renounced their mainland Chinese passports. Critics say this is administrative overreach and warn that if applications are ultimately denied residency, they could become stateless on both sides of the Taiwan Strait. 

 

August 5:

An insider at the Taiwan Semiconductor Manufacturing Company (TSMC) allegedly stole confidential 2nm process technology and defected to Rapidus shareholder Tokyo Electron. This raised concerns about critical tech leading to Japan. The Taiwan High Prosecutors Office invoked the National Security Act's "theft of core national technology" clause, raiding and detaining six engineers. Three were placed under detention and barred from visitation. 

 

August 5:

In an opinion piece entitled "How Taiwan Lost Trump," former Department of State adviser Christian Whitton criticized Vice President Hsiao Bi-khim's globalist-left approach and blaming the administration of President Lai Ching-te for alienating U.S. President Donald Trump. Scholar Bonnie Glaser countered that President Lai's U.S. policy is entirely his own, and that DPP-Republican ties run deeper than Whiton realizes. Still, she agreed that Taipei lacks a strategy for engaging the second Trump administration. 

 

August 7:

President Trump declared a 100-percent tariff on semiconductors, with exemptions for companies relocating production to the United States. He revised his statement on TSMC's investment from $300 billion to $200 billion. Scholars warned that the relocation of advanced and mature process supply chains to the United States is inevitable, and Taiwan's export momentum may stall. 

 

August 7:

Former Taipei Mayor Ko Wen-je, detained for nearly a year over the Living Mall development scandal, lashed out in court. He said his 12-month detention made him fully grasp "fabricated charges and wrongful accusations." He became emotional, cursed, and threw a water cup, declaring, "Tell Lai Ching-te I will never surrender, never yield." 

 

August 8:

A referendum on restarting the Third Nuclear Power Plant is set for August 23. According to the latest poll by the Taiwan Public Opinion Foundation (TPOF), 66.4 percent are in favor, and 22.1 percent opposed, while 46 percent of DPP supporters agree. The Storm Media poll shows 58.7-percent support, 21.6-percent opposition. TPOF Chairman You Ying-lung said conditional reactivation of the Third Nuclear Power Plant has become a societal consensus, posing an unprecedented challenge to the DPP's long-held anti-nuclear stance. 

 

August 9:

Due to Japan's protest over U.S. tariff stacking, the Office of Trade Negotiations (OTN), Executive Yuan, confirmed that tariffs on U.S. imports involve the original most-favored-nation rate plus the temporary reciprocal tariff rate. this means that for traditional industries, the effective tariff rate isn't just 20 percent and could approach 30 percent. The opposition slammed OTN for deliberately delaying clarification. After Japan engaged in further negotiations, the United States agreed to exempt Japan from tariff stacking, widening the gap between Japan and Taiwan's tariff rates. Industry groups in Taiwan are now worried that this could trigger a wave of unemployment.
Published since 2019 by the Fair Winds Foundation and Association of Foreign Relations, Taiwan Weekly provides in-depth report and analysis of the major issues facing Taiwan.

The conclusions and recommendations of any Taiwan Weekly article are solely those of its author(s) and do not reflect the views of the institutions that publish the newsletter.

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