Trump's Demand for Taiwan Defense Payment Hits TSMC Stocks

U.S. Republican presidential candidate Donald Trump has suggested that Taiwan should compensate the United States for its defense support, likening the arrangement to an insurance policy. These remarks, made during an interview with Bloomberg Businessweek, led to a decline of over 2% in shares of Taiwanese chip manufacturer TSMC. The U.S. remains Taiwan's main international supporter and arms supplier, mandated by law to provide defensive means, though there is no formal defense agreement in place.

Trump's comments come amid ongoing tensions between Taiwan and China, which has increased its military activities around the island. Taiwan is currently awaiting approximately $19 billion worth of delayed U.S. arms deliveries. Despite the drop in TSMC shares and the broader market decline of around 0.4%, there has been no immediate response from Taiwan's government or TSMC. Since 1979, there have been no official diplomatic or military relations between the U.S. and Taiwan.