Editor’s Notes: In this episode of American Thought Leaders, Ambassador Alexander Yui, Taiwan’s representative to the United States, explains why any conflict in the Taiwan Strait would trigger a global economic crisis costing trillions of dollars. He highlights Taiwan’s critical role in the global supply chain, noting that the island produces over 90% of the world’s most advanced chips and the servers powering the AI revolution. The discussion also addresses the Chinese Communist Party’s escalating “gray zone” tactics, including cyberattacks and disinformation, aimed at destabilizing Taiwan from within. Ambassador Yui underscores the importance of a “peace through strength” strategy and the growing economic and technological partnership between Taiwan and the U.S. (May 3, 2026)
TRANSCRIPT:
Introduction: Taiwan’s Strategic Importance
JAN JEKIELEK: Taiwan. It’s an island nation one-third of the size of Virginia, yet it produces over 90% of the world’s most advanced chips and more than 90% of the servers powering the AI revolution. And last year, it became America’s fourth-largest trading partner.
ALEXANDER YUI: The Taiwan Straits itself, any conflict in that straits, it will cause a crisis much larger than what is happening on Iran in the Strait of Hormuz. It’s in the trillions and trillions of dollars.
JAN JEKIELEK: In this episode, I’m sitting down with Taiwan’s representative to the United States, Ambassador Alexander Yui, to understand why Taiwan matters and what’s at stake as the Chinese Communist Party ramps up its campaign to isolate, intimidate, and encircle Taiwan.
ALEXANDER YUI: That’s only the part that you see, which is the military part, but PRC has been also using other means, gray zone tactics, using disinformation, cyberattacks, and other means to try to destabilize Taiwan from within. That’s just an example of what we face, but they do that to other parties, including the United States.
JAN JEKIELEK: This is American Thought Leaders, and I’m Jan Jekielek. Ambassador Alexander Yui, such a pleasure to have you on American Thought Leaders.
ALEXANDER YUI: Thank you, Jan, for having me on your show.
Xi Jinping’s 2027 Timeline and PRC Recalculations
JAN JEKIELEK: Xi Jinping, the leader of Communist China, has said that he wants the People’s Liberation Army to be ready to invade Taiwan in 2027. There have been recent actions by the United States in Venezuela, very significant. In Iran, there’s still an Iran war happening. It’s in a ceasefire at the moment. But the question here is, have there been any recalculations in your mind in the PRC? What is Xi Jinping thinking? How is this affecting things? Are there any changes?
ALEXANDER YUI: Well, of course there are. And I want to point out that as China has mentioned to the United States that Taiwan is the greatest risk factor between the relations between China and the United States, actually, I believe that it’s the other way, that the People’s Republic of China is the greatest risk factor for peace and stability in the Taiwan Straits, and in the Pacific region.
They’re the ones who are the aggressors. They’re the ones who are, as you mentioned, militarily preparing for conflict. And the People’s Republic of China has engaged in the largest peacetime military preparedness in human history, and I think that’s unfounded because their borders are not under threat.
But yet, with all the things that are occurring around the world, you mentioned Venezuela, Iran, and others, I think it shows a resolve from the United States to use the necessary tools to fix problems or achieve its objectives. And obviously there’ll be a relevance or reference to that on the Indo-Pacific, in particular to the Taiwan Straits.
Why Taiwan Matters to America
JAN JEKIELEK: There’s a lot of debate in America about how much security should the U.S. actually be providing to Taiwan, and how important U.S. security is to Taiwan, and how important Taiwan is to America. Can you extrapolate on this question from the Taiwanese perspective?
ALEXANDER YUI: Taiwan is relevant for many reasons. And first of all, Taiwan is facing a lot of challenges, aggressions from the People’s Republic of China constantly, militarily, but also questions from many other aspects, internal gray zone tactics, economic coercion, etc. So there is an actual threat to the existence of Taiwan, to the people of Taiwan as a democracy.
The threat that we face is not only ours alone, it’s other countries, Japan, the Philippines, and others. So you ask any country in that region, what is the biggest threat that they’re facing? It is the People’s Republic of China.
But why does it matter to American people? Well, first of all, we’re part of the first island chain, the line of democracies that are facing and contending this aggression from mainland China. And it’s not only about Taiwan or Japan, but going beyond that. And NATO Secretary General, he said it very well recently when he was in Washington, D.C., that just as NATO is keeping the Atlantic Alliance safe and sound on that part, but also us on the Pacific, we’re also holding the line so United States borders are safe. And I think that matters to the United States for that.
But also Taiwan has become an important partner to the United States in terms of technology, in terms of investment, in terms of education, and all sorts of things that we’re engaged in the United States for the last few years. So we’ve become a reliable but also a trusted and important partner with the United States, especially in the age of AI advancements.
The United States is intending on preserving the AI supremacy in the United States and asking partners, including Taiwan, to reach that. To achieve that, Taiwan is a key partner in that. We not only make most of the advanced chips in Taiwan, 95% of the chips, but also Taiwanese companies make 90-plus percent of the data servers and the AI servers that run the AI realm. So we not only do the hardware, but also we are much into this alliance with the United States.
We subscribe with the United States to this Pax Silica Declaration, along with the United States, earlier in January, but also we signed a memorandum with the United States on economic security, on rare earth collaboration, etc., and also the importance of maintaining a safe supply chain, meaning a non-red supply chain, especially in the technological field.
So all that matters to what the United States is.
And also we’re well aware that the well-being of Taiwan is ours to care. So we’ve been told that the United States should not care more about Taiwan’s security than the people of Taiwan. And we do. So we’re increasing our defense expenditures. We’re trying to pass a $40 billion additional budget to procure more arms and be more up to date with the way we have asymmetric warfare against a larger contender.
And those are the things that we’re doing. And that’s why we appreciate the United States’ longstanding support of Taiwan based on the Taiwan Relations Act and the Six Assurances. And this gives some stability to Taiwan. And we subscribe to the peace through strength theory. And we are doing whatever we can to do that, not only on the military side, but also on the whole society resiliency, on the military reserves, etc.
So we are doing our best to preserve our democracy, but we also appreciate friends such as the United States and others who are helping us maintain our freedom.
Peace Through Strength: Taiwan’s Defense Strategy
JAN JEKIELEK: So you mentioned peace through strength. How important is that?
ALEXANDER YUI: Peace through strength is the mantra that is being said in the United States, but also we follow that very closely. We believe in peace through strength. As we want to achieve peace and we love to negotiate, willing to negotiate with the PRC about the peace and stability of the Taiwan Strait, but you negotiate from a position of strength, not of weakness.
So having a strong defense is the best way forward and also the best way to defend itself, facing a larger aggressor or enemy. So for Taiwan, we’ve been for the last few years doing a lot of expenditure on improving our self-defense capabilities. We’ve actually almost doubled our defense expenditure for the last 10 years to better modernize our equipment, the local production of more missiles and arms and even airplanes and submarines. All that to show to all friends that we are ready to do whatever it takes for ourselves to defend ourselves better.
But at the same time, again, as I mentioned at the beginning, the threat is not only for Taiwan but also countries in the region. So for us to be able to, during peacetime, better know ourselves and what to do during crisis, the interoperability of our forces, or the interconnection and intercommunication of our forces, is important.
Well, I think in the United States National Security Strategy that was announced late last year, it was very clear on the United States’ focus, obviously, on the Western Hemisphere, which is their priority, but also made several mentions about peace and stability of the Indo-Pacific in particular, but also about Taiwan. Where the United States mentioned that it does not support a change of status quo from either side, and especially not through military or economic coercion. The People’s Republic of China is trying to internalize the waters between Taiwan and mainland China, the Taiwan Straits.
The Economic Cost of Conflict in the Taiwan Strait
JAN JEKIELEK: Actually, I just got word that they’re starting to build on another reef.
ALEXANDER YUI: Yeah, well, that’s not an accident. They’ve said that before when they were building these huge bases now in the South China Sea, that we shouldn’t worry because it was for humanitarian reasons. It was a place to house fishermen in times of storms, or house planes for search and rescue, and that we shouldn’t be concerned. But now they’re full-fledged military bases, with missiles and fighters and bombers, etc.
So yeah, we should be worried, and other countries should also warn China that they should be responsible and prevent unnecessary aggression against us. But the region itself, the Taiwan Straits itself, any conflict in that straits, it will cause a crisis much larger than what is happening on Iran in the Strait of Hormuz. There have been several studies about what would happen, and it is in the trillions and trillions of dollars.
It’s not only Taiwan’s ports which will be affected or Taiwan’s trade which will be affected, it will affect China’s trade ports, Japan, Korea, etc. So it’s something that is almost unimaginable if a crisis happens to that. So there’s a lot at stake, not only for us, the countries in the region, but also for the United States, which is obviously a main commercial partner with us and the region. Also Europe — again, NATO Secretary General mentioned that NATO cannot overlook what happens in the Indo-Pacific because it has direct stakes to European countries as well.
PRC Military Provocations and Airspace Violations
JAN JEKIELEK: So the Chinese Communist Party, for years now, and in an accelerating fashion, has been violating Taiwanese airspace with its fighter jets and so forth, to the point where I’ve had people call me from Taiwan saying, “I’m seeing them, right? Like, it happens often, and it’s loud, and it’s significant.” So maybe just explain that, because I don’t think a lot of people understand what this is, how it’s interpreted by the Taiwanese government.
ALEXANDER YUI: Well, first of all, I want to go to the basics. The People’s Republic of China, led by the Chinese Communist regime that was formed on October 1st, 1949, since their conception, they never had control or rule over Taiwan, which is where the seat of the government of the Republic of China is. So their claims on Taiwan is a fictitious claim because they never really controlled Taiwan.
And they’re trying to say, “Well, Taiwan is ours because historically it’s been part of China and we’re China, so it’s ours.” Well, if you use historical facts to claim something, then again, Mongolia can claim China because it’s part of the Mongolian Empire. And then what about all the lands that China lost to Russia? Etc., so it’s a never-ending story.
JAN JEKIELEK: The bottom line, you’re saying the People’s Republic of China has never had Taiwan under its auspices.
China’s Gray Zone Tactics and Taiwan’s International Isolation
ALEXANDER YUI: Never, and now they’re making these claims and trying to have the international community say that yes, you have to recognize that we own Taiwan, and through, if not, I’ll conquer it militarily, or they’re using these also misuse of United States resolutions 275A, which has nothing to do with Taiwan. But he said that article means that we own it. It’s trying to create this international legal basis to claim Taiwan, which again, you look at the article, doesn’t mention Taiwan at all. It also only makes reference to who represents China in the United Nations.
But as the Chinese military has grown stronger, and they obviously spend a lot of money to strengthen their military, they’ve becoming bolder, and they used the visit of Speaker Pelosi to Taiwan as an excuse to say, “Well, you crossed the line, we’re going to start pressing you.” There used to be a medium line in the Taiwan Straits, between Taiwan and mainland China that both sides respected. Their planes, militaries, will basically not cross each other’s medium line, but after that, they’ve crossed the line.
It’s been harassing Taiwanese surrounding airspace and naval. They haven’t really reached Taiwan’s airspace yet, nor naval, our territorial waters. They’ve been on the identification zones nearby, but on a constant basis, depending on the date, sometimes more, sometimes less, but constantly harassing our naval and air surroundings, trying to coerce Taiwan to create panic and uneasiness within the Chinese Taiwanese society.
But that’s only the part that you see, which is the military part, but PRC has been also using other means to create dissension or create instability or nervousness within Taiwan, trying to, but not really working through, again, this gray zone tactics, cutting off our cables that communicates with the outside world, trying to drive wedges between our different political parties, using disinformation, cyberattacks, and other means to try to destabilize Taiwan from within. And that’s something that we’re already facing, and that’s part of the aggression that China is using to us. But that’s just an example of what we face, but they do that to other parties, including the United States.
The KMT’s Relations with Beijing and Taiwan’s Democratic Identity
JAN JEKIELEK: I want to dig into that a little bit because there was recently the Taiwanese president was actually unable to travel to an important event because presumably China coerced a number of African countries to deny airspace access. I want to talk about that, but explain to me a little more about how — what — how are we to understand the leader of the major opposition, single major opposition party in Taiwan traveling to Beijing, meeting with Xi Jinping and ostensibly incredibly warm relations. How do you read, how are we supposed to read that here?
ALEXANDER YUI: Well, I mean, again, the fact that they talk to each other, talking is good. It reduces misunderstandings. For example, even President Trump’s pending trip to Beijing to meet President Xi, or the chairwoman from the Kuomintang Party visiting Beijing and meeting Chairman Xi. I think these are positive in the way that it creates communication, reduces miscommunication or misunderstandings, and will be hopefully conducive to peace and stability.
But what people in the Republic of China should be aware of is that the Republic of China, Taiwan is a sovereign, democratic, and independent country. And we are a democracy that has an elected government. So while he’s talking to one party in Taiwan, we also urge them to also talk to all parties in Taiwan, including the party who is in government, which is the DPP government, the ruling party.
But I think they’ve been not wanting to do so because somehow they still think that the China-Taiwan debacle is something of a historical CCP-KMT struggle, and therefore they’re not willing to talk to the other parties. But again, they should recognize the fact that we are a democracy and people in Taiwan choose their leaders, choose their governments every 4 years, and currently the party who is in government is the Democratic Progressive Party, and they should also talk to them.
JAN JEKIELEK: Yeah, and it’s just — I’ll elucidate this a little bit because so it’s in fact the party that basically landed in Taiwan and set up government in Taiwan, the KMT, that is now the party that is developing those relations with the mainland.
ALEXANDER YUI: Well, I mean, the fact that they approach each other and talk to each other again, as long as it’s conducive to peace, it’s okay.
JAN JEKIELEK: Well, except that they’re denying — the same people that are having these conversations are denying your president having access to going to a conference in an African country.
Taiwan’s Economic Relevance and China’s Coercive Tactics
ALEXANDER YUI: And that’s the problem because you cannot pretend that things are rosy when they’re talking to each other, like as if between the Taiwanese and Chinese people in mainland China, things are okay, but what happens outside of it, then they still treat us as rebels, and therefore not recognize who we are. And our president recently had to cancel in the last moment his trip to Eswatini. This is the reality that we face.
Taiwan nowadays is a very relevant economy in the world. As a matter of fact, last year, 2025, we became United States’ fourth largest trading partner. So while the King and Queen of England is visiting the United States now, you must be aware that we do more trade with the United States than the United Kingdom does trade with the United States. But while the King of England is traveling to the United States and other places, my president has been prevented because of PRC’s coercion to other countries and their attempt to isolate Taiwan politically and internationally, and that’s something that we think is unjustified and unfair.
But also it relates to the caveat of working with or investing or doing business with People’s Republic of China because they will weaponize things according to their interests. For example, my president’s intended flight to Africa was stopped because they coerced a few countries in Africa to cancel the already permitted passages through their flight information region.
But at the same time, there are similar events that people recall China doing, for example, on Panama. There was a court ruling on ports regarding who controls the ports in Panama. And because PRC didn’t like it, they started coercing Panamanian flagships in China by doing undue inspections and harassing of Panamanian ships, which including the United States and other countries, they also voiced their opposition of weaponizing maritime safety for their own needs. And that’s the danger of doing business with China.
And that’s the same reason why Taiwan, which used to be heavily invested in China, has been decoupling Chinese presence or our presence. For example, 12 years ago, over almost 85% of our foreign direct investment was going to mainland China because that’s where our factories were. That’s 12 years ago. 2 years ago, our direct investment in China came down to less than 7%. Last year it was less than 4% of our FDI going to China. Because why? China is an unreliable partner. They’re willing to weaponize, coerce us if they think seem fit. And that’s not a healthy environment to do business.
But it’s not only Taiwan who’s diminishing their investment. It’s the United States, Japan, and other countries who are also having the same feelings. They’re leaving China. But where’s Taiwan’s investments going? 2 years ago, 40% of FDI was coming to the United States, and so we have a bustling commercial investment relationship with the United States based on our common values.
JAN JEKIELEK: I’m trying to figure out who the other countries are because you said the top 4. One of them is Canada, I know.
ALEXANDER YUI: Well, I mean, yeah.
JAN JEKIELEK: And another one is Taiwan.
ALEXANDER YUI: No, the only countries who do more trade with the United States than Taiwan is your neighbors, Canada and Mexico, and China, and we were fourth. And also last year, for the first time in many, many decades, Taiwanese exports to the United States were larger than Chinese exports to the United States. It’s little Taiwan exporting more, but partly because Taiwanese factories who were in China exporting to the United States, now they’ve left, and now they’re exporting from elsewhere, from the United States, from Canada — well, producing in the United States, exporting from Mexico and other regions.
And one other fact, to highlight Taiwan’s relevance in economy and into the world — last week we replaced the UK as the 7th largest stock market and this week we also overcame Canada as the 6th largest stock market. So Taiwan economically is relevant to the world, but yet politically, internationally, we’ve been facing this blockage from people who become China for us to be able to act normally in the international scene. And that’s something that we’ve been appealing to the world, that Taiwan deserves to have a space in the international arena.
Taiwan’s Democracy and Economic Resilience
JAN JEKIELEK: Another thing that always impresses me about Taiwan is the kind of robust democracy — votes counted instantly, public. It’s like a public phenomenon. It’s like a party basically, right, to vote counting on the day of election. It’s just something to behold. Maybe we’ll cut in a little clip of what that looks like because I think that it’s kind of inspiring actually.
ALEXANDER YUI: Well, it’s low-tech, but it works. And also people get to look at it personally. We have obviously inspectors from each party when they do the balloting and accounting, and it’s very low-key. Just show up, show ballot, count, and then you put a little scratch — but it’s very effective. And by the same night we already know who had won. And most elections that’s the case. But yeah, that’s democracy at work, and it works.
JAN JEKIELEK: I’ll just add one more thing, which is that the GDP per capita in Taiwan is 3 times that of China. And a lot of people — I like to mention this fact because every time I mention it, almost every time, because really, how’s that possible?
ALEXANDER YUI: Oh, right. Yeah.
JAN JEKIELEK: Well, I mean, I’m unabashedly a fan of Taiwan here, okay? So I don’t want to — I’ll add one more thing here, okay? This is just something that struck me. One of the sort of criticisms leveled against the US and other countries that have been democracies for a very long time, much longer than Taiwan, is that they’ve gotten too comfortable.
ALEXANDER YUI: Okay. Yeah.
JAN JEKIELEK: And so I’m wondering how much you think just this very fact that Taiwan’s freedom is always a bit of a question mark given this totalitarian dictatorship on the edge saying, “We’re going to take you over when we feel like it.” How much do you think that might actually contribute to this kind of robustness around democracy, about economy, all these areas?
Taiwan’s Journey: From Isolation to Self-Reliance
ALEXANDER YUI: Well, it is a hard struggle. Since I was born in Taiwan many, many decades ago, we were already confronting this situation, which is a menace from the other side, mainland China towards the survival of the people on Taiwan. And so facing this threat, we’ve learned to be self-reliant. And as we had to leave — we were founding members of United Nations, mind you — but then things changed and we eventually had to be forced to leave the United Nations. Many countries cut relations with Taiwan. So at one point, it was a very, really sad situation, grim and dim situation in Taiwan, feeling like the world was leaving Taiwan, we’re being cast aside, we’re being orphans of the world.
So we never gave up and being self-reliant and working on things that we think is correct. And at the same time, we were developing our democracy. As a matter of fact, as the United States celebrates 250 years of being a democratic republic, we’re celebrating 30 years of direct presidential elections. We had our first universal suffrage for the citizens to be able to elect its own president in the year 2000. So we are very proud of our achievements.
But at the same time, we developed our economy. We tried to link with the world in terms of economy. And we’ve been fairly successful. This evolution from an authoritarian government in the past, evolving to a full democracy in Taiwan, it was sort of a fairly peaceful transition. There were some struggles, but generally speaking, a peaceful transition. At the same time, we were developing our economy. Our per capita income in 1949 was probably less than $100, but now we’re doing pretty well and in certain cases our per capita has surpassed that of Korea even.
But again, we’re not sitting on our laurels, but we know that it’s a constant struggle and we’ll continue to do so. But at the same time, many countries, although they don’t have the formal relations with Taiwan such as the United States and Japan and many countries, it’s not the same as heeding to People’s Republic of China’s claim of this One China principle, which includes Taiwan is mine and this is one big China including Taiwan which is mine. And they want every single other country to recognize their principle.
Actually, many countries have their own One China policy that differs greatly from PRC’s One China principle. And in each country’s One China policy, they can assert their own way of dealing with China at the same time with Taiwan. As I mentioned earlier, in the United States’ case, they have a One China policy but at the same time they have this Taiwan Relations Act and the Six Assurances, in which based on those groundworks, there’s a thriving partnership and interaction with the United States.
JAN JEKIELEK: And that does, and that law does reflect, I guess, the United States’ support for Taiwan.
ALEXANDER YUI: Which is very strong, it’s the law of the land, and also although China constantly says, well, you know, you agreed that you were going to diminish the sale of arms to Taiwan. But United States has mentioned also that the sale of arms to Taiwan is commensurate with the threat that Taiwan is receiving. And as you— as anyone can attest to nowadays, is that the threat level of Taiwan being, you know, threat is very, very high. So for us to acquire necessary defensive weapons is more than just the— so again, we appreciate the fact that the United States is, you know, based on the TRA, is selling arms to Taiwan, also helping Taiwan to defend itself better. Again, it is our responsibility and we’ll do so. We appreciate our friends helping us do that better, and we’re more than happy to be working with our friends and allies.
United Front Tactics and What America Can Learn from Taiwan
JAN JEKIELEK: So I recently had Peter Mattis, who runs the Jamestown Foundation, on the show, and we talked a lot about one of his areas of particular expertise, the United Front Work Department. So just again, for the benefit of our audience who might not know, they can watch that episode. But this is a whole kind of department or ministry committed to subverting civil society, both within and other places, like for example, Taiwan or the United States, and is very active, incredibly well-funded, one of the highest funded sort of ministries or departments in China. What can America learn from how Taiwan has been dealing with this? You mentioned asymmetrical warfare. This is one of their tools of asymmetrical warfare, probably maybe even the most potent one. We could debate that. What can America learn about those united front tactics and how they affect Taiwan?
ALEXANDER YUI: Well, as I mentioned, PRC spends a lot of money on defense, defense or military procurement. It has one of the largest armies in the world. Certainly the largest navy in the world. They have a lot of it is so large that obviously goes beyond the need for territorial defense. And PRC has engaged in the largest peacetime military procurement and strengthening, and while their borders are not under threat.
So the biggest threat comes from People’s Republic of China, militarily, but the thing is the PRC spends more money on internal control than on its military, including the United Front. And the United Front, what it does is basically political warfare, propaganda, or trying to dissuade you through different means to acknowledge how the world looks according to their view, for example.
And then you have TikTok, which again, I’m very happy that United States has arranged some, made some arrangements to prevent the effect of Chinese TikTok being done on the United States because TikTok, I’ve said, it’s a cyberfentanyl. TikTok videos, they know they’re harmless, they’re funny, but inside of all that, they spread disinformation in those airtime, which people very easily swallow because it’s irrelevant, it’s funny. And then you start swallowing, but in the midst of that, they start putting these messages to try to form your view according to theirs.
And again, through media, through talk shows, and through infiltration of government officials or key people in government and society, they try to transform the mentality of— for example, they’ve been trying to nurture this notion that United States is an unreliable partner and they have this messaging on the internet, on airwaves, etc., saying United States will not be there to help you when things get bad because they only want to earn money from you. They’re capitalists, all they care about is money, etc.
And they continuously try to brainwash us that this is the case and that they’re the good guys. We’re with them, all things will be good, but you have to be subjected to us and then you’ll be like the people in Hong Kong. Well, people in Hong Kong are not happy, although they try to say through TikTok, Hong Kong is great, the Uyghurs are happy, everything is good, and even that China is a democracy. Like, who in the world thinks China is a democracy? But that’s the way they’re trying to portray themselves as being, which is a fictitious world that they’re trying to have us swallow, which is not true.
JAN JEKIELEK: Right. I mean, you mentioned talk shows and influencers, all sorts of influencers, right? That’s a big thing today.
ALEXANDER YUI: And not only Chinese, but they use foreigners to try to do that so that the words coming from a foreigner must be true and try to say, well, this is— he’s one of us, so what he said must be true. And that’s part of the messaging, the false messaging they’re trying to reach to the audience outside of China.
JAN JEKIELEK: Yeah, and I’m just thinking, and that’s a very powerful vector.
ALEXANDER YUI: It is.
JAN JEKIELEK: Right?
ALEXANDER YUI: It is.
JAN JEKIELEK: But it’s only one of the united front.
ALEXANDER YUI: Oh yeah. There’s so many more. Yeah, I mean, so many.
Taiwan-US Trade Growth and Investment
JAN JEKIELEK: Mr. Ambassador, you mentioned that Taiwan-US trade is on the rise, CCP-US trade is on the decline. Where are these areas of growth? And I’ll add a caveat to that. Clearly you’ve invested a huge amount of money in TSMC in Arizona and building these super top chip plants in the United States. And how does that— explain to me how that factors into this.
ALEXANDER YUI: I mean, the thriving and ever-growing trade relationship between Taiwan and the United States is happening partly because of decoupling from China. But also of the common values that we have in terms of investment, in terms of what we do together. I mentioned the AI development. We want to make sure that the AI realm, which is like, it’s a new industrial revolution that’s happening all around us and AI will be part of our lives, that make sure that this AI is AI that works for good, that helps the human beings and not restrict human behavior or human— so we want to make sure that we maintain this supremacy in AI and working together with the United States.
So in that sense, Taiwanese investments in the United States has continued to grow, mainly in technology, semiconductors mainly. You mentioned the TSMC, they’re building 6 fabs in Phoenix, 2 packaging and 1 research center. And it’s a bustling— you go to Phoenix, you see this growth, it was just empty land and now it’s—
JAN JEKIELEK: It’s quite unbelievable. Yeah, I saw it recently.
ALEXANDER YUI: And it’s really encouraging to see what the fruit of the labor between Taiwanese and American workforce to do that. But also in January and February of this year, we signed a memorandum on investments between Taiwan and United States, also an agreement on reciprocal trade, which basically after 10 months of negotiations, United States and Taiwan reached an agreement that basically deals with most of the details on bilateral trade. Some of the items that for many, many years, even decades, will not be— we’re not able to solve, will be done in that. And we’ll have a set tariff, like the ones with Japan and others.
But that brings us Taiwanese pledge that we will be investing $1.5 billion from Taiwanese companies into United States in the places and the items that Taiwanese companies see fit. Also, the government of Taiwan will make available $250 billion worth of credit guarantees to our companies who want to invest in manufacturing in the United States.
So all that is happening, and the upcoming USA Select, which is happening in early May, we will have, as the previous years, probably one of the— or the largest foreign delegation coming to the USA. And very possibly we’ll have some good news to announce back then. I’ll leave it to the delegation to make the announcements.
But at the same time, there’s one piece of puzzle still left that will encourage further interaction and investment to the United States, and that’s the avoidance of double taxation bill that passed the House of Representatives last year, 423 to 1, and now it’s in the Senate pending approval. I hope that the Senate will approve that because we’re the only major trading partner of the United States that still does not enjoy avoidance of double taxation. Means that because of that, Taiwanese companies in the United States have to pay double taxes, their employees have to pay double taxes to U.S. and Taiwanese agencies. And likewise, American companies going to Taiwan have to do the same, but not so in Japan, Korea, Vietnam, etc. So it is unjustified or unjust. And we hope that this will remediate. And with the passage of ADTA, you can certainly see more encouragement for Taiwanese companies to be in the United States. So hopefully that will be able to accomplish in the very short future.
A Rock-Solid Partnership: Final Thoughts
JAN JEKIELEK: Well, Mr. Ambassador, a quick final thought as we finish?
ALEXANDER YUI: U.S.-Taiwan relations, we’ve gone through again, 1979 diplomatic relations ended and it was a low point of our relations. But luckily, because of Congress’ passage of Taiwan Relations Act, it gave us a legal basis to how to interact with each other. And since then, actually, our relations have grown steadily and bustling and now we say that it’s a rock-solid partnership between Taiwan and United States.
So we are all in to make United States’ objective of remanufacturing or having manufacturing renaissance in United States. It fits our purpose to do so, and we work very closely with United States in making this a reality of manufacturing technology. And also fits Taiwan’s strategy to be here, expanding our footprint of manufacturing in the United States. It fits the purposes, but at the same time highlighting the achievements and celebration of democracy, 250th anniversary of the United States as a democracy, and so as Taiwan’s 30th anniversary of the presidential election.
So many things that are value likewise in terms of technology, in terms of values, in terms of what we want to do together. And I think this is one of the highlights, one of the best moments between Taiwan and U.S. relations.
JAN JEKIELEK: Well, Ambassador Alexander Yui, it’s such a pleasure to have had you on.
ALEXANDER YUI: Thank you. Yeah, thank you for having me.
JAN JEKIELEK: Thank you all for joining Ambassador Alexander Yui and me on this episode of American Thought Leaders. I’m your host, Jan Jekielek.
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