While the world is transfixed on America’s needless alienation of longtime American ally Ukraine, another American ally has come under fire from the administration. President Trump’s recent threats of tariffs against longtime U.S. East Asian partner Taiwan came as a surprise for many Taiwanese government officials, signaling a shift between the two countries toward a more transactional relationship. President Trump claimed Taiwan isn’t doing enough for its own security and benefits unfairly in chip manufacturing due to U.S. military support. Taiwan has been a longtime close partner of the United States and while the U.S. doesn’t recognize Taiwan officially, the two countries have a robust unofficial relationship.

Why Tariff Taiwan?

The Trump Administration’s threats of tariffs come from the pursuit of elevating domestic semiconductor production; a high priority given the use of semiconductors in advanced electronics across industries. This policy objective shows continuity from the Biden administration’s efforts through the CHIPS act, but focuses more on moving existing production to the U.S. rather than building it from the ground up. Trump has been critical of the CHIPS Act in the past, describing it as “so bad” while suggesting tariffs would be more effective at increasing domestic production.

The President’s funding freeze, which was temporarily blocked by a federal judge, would pause the CHIPS Act’s semiconductor subsidies. Trump’s plan seems to be to threaten Taiwan with tariffs until its semiconductor giant TSMC is able to satisfy Trump by moving more of its manufacturing to the United States. These measures aim to shift chip production market share from Taiwan and China to the United States. Despite the belief they had favorable standing in Washington, Taiwanese officials have been left rushing to appease President Trump by fast-tracking the production of 3nm chips in its Arizona facility.

During Trump’s campaign, one of his primary talking points was that inflation in the U.S. is primarily driven by overregulation and a lack of domestic energy production under Biden. On his first day in office, he declared a “National Energy Emergency” and signed an executive order entitled “Unleashing American Energy.” Meeting the energy needs of semiconductor production is no easy task. Semiconductor plants have intense energy demands that show no sign of slowing down in the future, with some projecting industry-wide energy demands to double by 2030. Even Taiwan, a country that produces ~90% of the world’s chips and has all the supporting infrastructure to do so, encounters the energy demand issues of its biggest industry.

What Has Already Been Done?

Spurred by investment from the CHIPS Act, construction for a Samsung semiconductor manufacturing plant is already underway in Taylor, Texas, and is planned to be operational in 2025. If Taiwan struggles to meet energy demands with the infrastructure it already has in place to support semiconductor manufacturing, then it could add to the strain on Texas’ power grid, already fueled by increased manufacturing and data center capacity.

If the United States wants to continue to pursue domestic semiconductor manufacturing, it must grapple with both the current and future energy demands that come with it. President Trump’s executive orders primarily focus on expanding hydrocarbon production by removing regulatory restrictions. While an increased supply of hydrocarbons may help stabilize prices, it will not entirely address the demands of new semiconductor facilities, especially when the current administration plans to sell energy resources like LNG abroad as a core of its policy.

Arizona, the site of TSMC’s U.S. plant, has some of the highest potential for solar energy in the country. This is one of the few regions in the United States with the solar radiation capacity to produce more than 7.5 kWh per meter every day. While the current administration may oppose to it, solar infrastructure in both Arizona and Texas could supplement the energy load needed for semiconductor manufacturing. Nuclear energy may also be a worthy investment, as SMRs are becoming more popular with companies like Google and Amazon investing in them to power large-scale tech projects and the Trump administration expressing support for nuclear projects. Additionally, the U.S. must manage resources like rare earth minerals and water, with both being heavily utilized in the semiconductor fabrication process.

Expanding domestic semiconductor production is an important strategic objective, but it must be recognized as the massive undertaking that it entails. Fostering a semiconductor industry requires tremendous energy from any source available, including solar, wind, and nuclear. It is also an industry that requires significant investment without demanding immediate returns. The TSMC Arizona plant began construction in 2021 and is only becoming operational this year. U.S. semiconductor independence is an economic and national security priority, but a lack of energy infrastructure and the need for massive public-private funding between the manufacturing facilities and supporting infrastructure are logistical bottlenecks.

Even if every single Taiwanese semiconductor plant teleported to the U.S., these logistical bottlenecks would stymie operations. If the Trump administration is truly serious about semiconductor independence, the answer is not to tariff America’s greatest strategic asset against China and the supplier of much of the world’s semiconductors.