Taiwan's chip companies are caught in US-China tariff war

And navigating that reliance could prove to be one of the trickiest policy problems both countries face in their trade relations.

- MEAGHAN TOBIN

China and the United States both view Taiwan's dominance of the global tech supply chain as a national security risk. In response, they have tried to forge their own capacity to make the chips they need.

But as they come to grips with how difficult it is to replicate the industry at the heart of the global tech supply chain, which Taiwan has built over decades, China and the United States are pursuing diverging approaches to their dependence on the island and its dominant chipmaker, Taiwan Semiconductor Manufacturing Co.

In the United States, the Trump administration has initiated a national security investigation into chip imports that could result in tariffs on the industry. Nvidia, an American chipmaker, said it needed to halt a dramatically reduced association in China issued guidance that would exempt a significant portion advanced chips from China's tariffs on the United States.

The reason, experts said, is that China knows it needs those chips and does not want to let its trade war with the United States get in the way.

'CLEVER MOVE BY CHINA'