Trump calls Taiwan 'negotiating chip'

President Donald Trump said in a Fox News interview aired on May 16 that U.S. arms sales to Taiwan were “a very good negotiating chip” in dealings with China, linking a long-standing security commitment to his broader talks with President Xi Jinping. Trump said he was holding a $14 billion Taiwan arms package “in abeyance” and that its fate “depends on China,” according to an Associated Press report carried by multiple outlets. (abcnews.com) The remarks came after Trump wrapped up a high-stakes visit to China on Friday, where Taiwan was one of the issues hanging over the summit. China claims Taiwan as its territory and has long opposed U.S. weapons sales to the island, while Washington has remained Taiwan’s main arms supplier under U.S. law. (uscode.house.gov) William Yang of the International Crisis Group told AP that conditioning arms sales on negotiations with Beijing could match one of Taipei’s “nightmare scenarios”: Taiwan being treated as an object of bargaining rather than a participant. Trump did not say what he would seek from China in return, but AP reported he has been pressing Beijing to buy more U.S. goods and help pressure Iran. (abcnews.com) ### What exactly did Trump say about the Taiwan package? Trump told Fox News host Bret Baier that he had not approved the package and might or might not do so. “I’m holding that in abeyance and it depends on China,” Trump said, adding that the arms were “a very good negotiating chip for us, frankly.” (abcnews.com) The $14 billion figure matters because it turns an otherwise familiar Taiwan policy debate into a specific pending decision. Politico reported the package had been approved by Congress in January and now hangs in the balance after Trump’s comments. (abcnews.com) ### Why is that unusual in U.S. policy? The Taiwan Relations Act, enacted in 1979, states that it is U.S. policy to provide Taiwan with arms “of a defensive character” and to treat coercive efforts against Taiwan as a matter of “grave concern” to the United States. That law does not create formal diplomatic recognition of Taiwan, but it has anchored decades of security support. (abcnews.com) Congressional Research Service said in a 2025 brief that the U.S. “one-China” policy is distinct from Beijing’s “one-China principle,” and that successive administrations have described U.S. policy as guided by U.S. law and executive commitments. Trump’s comments do not change the statute, but they introduced uncertainty over how his administration may apply it in a live negotiation with Beijing. (politico.com) That final point is an inference from the law remaining in place while the president publicly conditions a package on China. ### Why does Taiwan matter to chip supply chains? TSMC, Taiwan’s dominant contract chipmaker, said in its 2025 annual report that it manufactured 12,682 products for 534 customers in 2025. (uscode.house.gov) TSMC’s quarterly management report also showed North America accounted for 75% of second-quarter 2025 revenue, underscoring how heavily U.S. technology demand is tied to the company’s output. Taiwan’s role in advanced chip production has made the island a recurring focus in U.S.-China security debates because any disruption there would ripple through electronics, cloud infrastructure and industrial systems. (congress.gov) Trump has also pushed TSMC to expand in the United States rather than rely so heavily on Taiwan-based production. ### What has already shifted in U.S. chip sourcing? TSMC said on March 4, 2025 that it planned to expand its U.S. investment by an additional $100 billion, bringing total planned spending in Arizona to $165 billion. The company said the Arizona project would include three new fabs, two advanced packaging facilities and a major research and development team center. (pr.tsmc.com) The White House said on March 3, 2025 that Trump appeared with TSMC Chief Executive C.C. Wei to announce the expansion. That means part of the supply-chain response to Taiwan risk is already in motion, even as most of TSMC’s manufacturing base remains centered in Taiwan. (pr.tsmc.com) ### What happens next? The Taiwan Relations Act remains law, and no formal U.S. announcement has rescinded the pending package described by Trump. Taipei, Beijing, Congress and U.S. defense officials are likely to watch for the administration’s next formal move on the $14 billion sale and for any follow-up statements after Trump’s China trip. (uscode.house.gov) (whitehouse.gov) (pr.tsmc.com)