US calls Taiwan ‘vital partner’ after high-level tech and AI talks

TAIPEI – Senior Taiwanese and US officials discussed cooperation in artificial intelligence, tech and drones at a high-level forum begun during the first Trump administration, with the US State Department praising Taipei as a “vital partner”.

The US is Taiwan’s most important international backer and arms supplier, despite the lack of formal diplomatic ties. The US-Taiwan Economic Prosperity Partnership Dialogue first took place in November 2020.

In a statement on Jan 27, the State Department said the sixth round of talks took place, led by Under Secretary for Economic Affairs Jacob Helberg and Taiwan Economy Minister Kung Ming-hsin, who is visiting the US.

The two sides signed statements on the

Pax Silica Declaration

– a US-led initiative to secure AI and semiconductor supply chains – and US-Taiwan cooperation on economic security, the State Department said.

“Taiwan is a vital partner on these and other important economic initiatives and its advanced manufacturing sector plays a key role in fuelling the AI revolution,” it added.

The talks also featured exchanges on supply chain security, including how it relates to AI, certification on drone components and cooperation on critical minerals, the State Department said.

“Discussions focused on highlighting progress in responding to economic coercion, pursuing mutual cooperation in third countries and addressing tax-related barriers to increase investment between the United States and Taiwan,” it said.

Taiwan, a major producer of advanced semiconductors that power AI, has long pushed for an agreement to avoid double taxation, saying it would boost bilateral investment.

Taiwan’s economy ministry said both sides agreed that peace and stability across the Taiwan Strait that separates the island from China are “crucial to global economic security and prosperity”. They also discussed undersea cable security, low-Earth-orbit satellite cooperation and the training of high-tech talent.

Mr Kung told the Atlantic Council think tank on Jan 28 that with US expertise in AI chip design and Taiwan’s dominance in chip foundries, cooperation between Washington, Taiwanese chipmaking giant TSMC and Taipei would deepen over the next five to 10 years.

Taiwan and the US reached a deal in January to cut tariffs on Taiwan’s exports to the US and boost Taiwanese investment in semiconductors and other sectors in the country.

Taiwan companies have pledged to invest US$250 billion (S$316 billion) to expand semiconductor, energy and AI production in the US, while Taipei will guarantee an additional US$250 billion in credit to support further investment.

Mr Kung said that US companies including Nvidia, Advanced Micro Devices and Micron Technology, were continuing to invest heavily in Taiwan - more than US$15 billion - to build a “non-red” supply chain that does not rely on China.

“The actual amount should be much higher than this. And they are also investing in semiconductor supply chains, cloud software services, etc. All of these areas are seeing increased investment in Taiwan,” he said.

Taiwan has accused China of being involved in damaging undersea telecom and internet cables, which Beijing denies, and is expanding the use of low-Earth-orbit satellites for back-up communications should China sever the cables during an attack on the island.

Taiwan and the US earlier in January reached a deal to cut tariffs on Taiwan’s exports to the US and boost Taiwanese investment in semiconductors and other sectors in the country.

China routinely objects to any interactions between Taiwanese and US officials, saying Taiwan is an internal affair and a red line that Washington should not cross.

Taiwan’s government rejects Beijing’s sovereignty claims, saying only the island’s people can decide their future. REUTERS