Taiwan says Lutnick’s US$500B investment claim is misleading

TAIPEI (TVBS News) — Premier Cho Jung-tai (卓榮泰) clarified on Tuesday (Jan. 20) that Taiwan's US$250 billion (around NT$7.9 trillion) corporate investment and the government's US$250 billion (around NT$7.9 trillion) credit insurance are separate initiatives in U.S. trade negotiations. Cho, head of the Executive Yuan (行政院), Taiwan's cabinet, made the distinction to avoid misreporting a combined US$500 billion (around NT$15.8 trillion) investment figure funded by the nation as a whole. The clarification came during a press conference addressing U.S.-Taiwan tariff negotiations.

Cho stressed that misinterpretations could complicate future negotiations with the U.S., responding to U.S. Commerce Secretary Howard Lutnick's claim of a US$500 billion (around NT$15.8 trillion) investment from Taiwan. The premier reiterated that Taiwan's business investments and government credit support operate independently. All agreements are based on the Taiwan-U.S. investment memorandum of understanding (MOU), Cho said.

Vice Premier Cheng Li-chiun (鄭麗君) elaborated on the 15% reciprocal tariff, which will not be applied on top of the most-favored-nation (MFN) rate. If the MFN rate is below 15%, the tariff will be set at 15%; if the MFN rate is above 15%, the higher MFN rate applies, Cheng explained. Taiwan's credit insurance model involves financial institutions providing financing, with the government offering credit guarantees rather than direct funding, Cheng said.

Cheng highlighted that, unlike Japan and South Korea, which directly fund U.S. investments, Taiwan aims to establish a U.S.-led supply chain cluster. The Taiwan model seeks to create a conducive environment for Taiwanese businesses investing in the U.S., where "Taiwan, US can lead," Cheng explained. Taiwan Semiconductor Manufacturing (TSMC, 台積電), the world's largest contract chipmaker, maintains investments in Taiwan that surpass those in other countries, Cheng noted.

Trade Representative Yang Jen-ni (楊珍妮) detailed that Taiwan's negotiations comprise the Taiwan-U.S. Agreement on Reciprocal Trade (ART) and the Taiwan-U.S. Investment Cooperation MOU. The negotiations aim to reduce non-tariff trade barriers between the two nations, Yang said. Both parties are finalizing the ART draft, with specific tariff reductions to be reported after signing the agreement in a few weeks, Yang added.

The Executive Yuan (行政院), Taiwan's cabinet, plans to submit the Taiwan-U.S. tariff agreement to the Legislative Yuan (立法院), Taiwan's parliament, for review. The ruling Democratic Progressive Party (DPP, 民進黨) faces a legislative majority composed of the opposition Kuomintang (KMT, 國民黨) and the Taiwan People's Party (TPP, 民眾黨). Despite current political tensions, the Executive Yuan hopes parliament will accurately grasp the information to facilitate administrative-legislative collaboration. ◼ (At time of reporting, US$1 equals approximately NT$31.6)