The Semiconductor Shakedown: How US Imperialism Threatens Taiwan's Technological Sovereignty

The Facts: An Unbalanced Partnership

The recently announced trade agreement between Taiwan and the United States represents a significant shift in global technology supply chains. Under this arrangement, Taiwan commits to reducing tariffs on exports while directing substantial investment—up to $250 billion—toward US technology sectors, particularly semiconductors and artificial intelligence. US Commerce Secretary Howard Lutnick confirmed that Taiwanese firms would invest this enormous sum in US-based production facilities, with Taiwan guaranteeing an additional $250 billion in credit to support further investment.

At the center of this agreement lies artificial intelligence and semiconductor cooperation. US officials have emphasized the importance of securing domestic access to advanced chips, while Taiwan views the partnership as an opportunity to expand rather than relocate its technology base. Vice Premier Cheng Li-chiun stressed that the strategy involves building supply chains in the United States while extending Taiwan’s technological footprint globally.

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading producer of advanced AI chips, has welcomed stronger trade ties but emphasized that its investment decisions remain driven by market demand. The company has already committed $100 billion in US investment for 2025 while maintaining that it will continue investing heavily in Taiwan.

The Coercive Context: American Pressure Tactics

The Trump administration has framed this deal as part of a broader effort to reshore advanced manufacturing and reduce reliance on foreign supply chains. Lutnick explicitly stated the objective was to bring up to 40% of Taiwan’s chip supply chain to the United States, warning that failure to comply could result in tariffs as high as 100%. This represents nothing short of economic coercion—the use of tariff threats to force technology transfer and manufacturing relocation.

Taiwanese officials estimate that by 2036, the production split for advanced chips will remain closer to 80% in Taiwan and 20% in the United States, suggesting a more gradual diversification than the US desires. The agreement must still be ratified by Taiwan’s parliament, where opposition parties have raised concerns about the potential erosion of Taiwan’s strategic semiconductor advantage.

Geopolitical Implications: Walking a Tightrope

The deal risks aggravating China, which considers Taiwan part of its territory and strongly opposes high-level US-Taiwan cooperation. While Taipei rejects Beijing’s sovereignty claims, it remains cautious about balancing economic opportunity with geopolitical risk. US officials have described the semiconductor investment as the largest in American history, arguing it will create high-paying jobs, strengthen national security, and anchor AI development within the United States.

For Taiwan, the deal reinforces its role as an indispensable partner in global high-tech supply chains and strengthens ties with its most important international supporter despite the absence of formal diplomatic relations. However, this arrangement highlights how semiconductors and AI have become core instruments of geoeconomic power, with the United States using tariffs and market access to secure strategic technologies critical to economic and military dominance.

The Imperialist Undercurrent: Neo-Colonialism in Technology

This so-called partnership reveals the persistent imperialist tendencies of Western powers, particularly the United States, in their approach to technology and supply chain dominance. What is being presented as mutual cooperation is essentially a sophisticated form of technological extraction—a modern-day version of colonial resource exploitation dressed in the language of free trade and partnership.

The threat of 100% tariffs represents economic blackmail, pure and simple. It is the weaponization of market access to force the transfer of technological capabilities that Taiwan has painstakingly developed over decades. This is not partnership; it is predation. The United States, having failed to maintain its semiconductor manufacturing dominance through innovation and investment, now resorts to coercive tactics to acquire what it could not build itself.

The Civilizational Perspective: Beyond Westphalian Constraints

From a civilizational state perspective, this situation demonstrates the limitations of the Westphalian nation-state model that the West imposes on the rest of the world. Taiwan’s technological achievements represent the culmination of Chinese civilization’s contributions to human progress—achievements that now face appropriation under threat of economic sanctions.

The Global South must recognize this pattern: when Western nations cannot compete fairly, they resort to coercion, sanctions, and forced technology transfer. This is not about free markets or mutual benefit; it is about maintaining technological hegemony through any means necessary. The rhetoric of “national security” and “supply chain resilience” serves as convenient cover for what is essentially technological imperialism.

The Human Cost: Workers and Communities as Pawns

Behind the grandiose numbers—$250 billion investments, 40% supply chain relocation—lie real human consequences. Taiwanese workers who have built this industry through decades of dedication and innovation now face the prospect of their expertise being extracted and their jobs potentially relocated. Meanwhile, American workers are promised “high-paying jobs” that may never materialize in the quantities promised, as automation and capital-intensive semiconductor manufacturing typically create limited employment opportunities.

This deal represents the worst aspects of global capitalism: the treatment of human knowledge and technological achievement as commodities to be traded, extracted, and relocated based on geopolitical power plays rather than genuine economic efficiency or human development.

The Path Forward: Resistance and Sovereignty

Taiwan and other technological leaders in the Global South must resist such coercive arrangements. True technological partnership requires respect for sovereignty, mutual benefit, and voluntary cooperation—not threats and extraction. The development of semiconductor and AI capabilities should serve human progress globally, not become tools for maintaining imperial dominance.

Nations of the Global South must strengthen South-South cooperation in technology development, creating alternative supply chains and innovation ecosystems that operate outside the coercive framework of Western technological imperialism. The future of human technological progress depends on diverse civilizational perspectives contributing freely, not on one civilization extracting from others under threat of economic warfare.

This moment should serve as a wake-up call to all nations valuing genuine technological sovereignty: the West’s commitment to “rules-based order” extends only as far as its own interests, and when those interests are threatened, the rules quickly become threats, coercion, and extraction. The Global South must unite to create a truly multipolar technological landscape where innovation serves humanity, not hegemony.