Adding insult to injury: At a fundraising dinner on Tuesday, Trump offhandedly said he had threatened to level a 100 percent tax on TSMC.

These are the latest in a series of confusing signals from the Trump administration that have left Taipei — which relies on the United States to help fend off military and political pressure from China — wondering where it stands.

“In the past, people thought Taiwan and the U.S. shared similar values on democracy and human rights, and they thought that so long as that was the case, Taiwan would be safe,” said Huang Kwei-bo, professor of diplomacy at National Chengchi University in Taipei. “But now, it doesn’t seem quite that simple.”

Taiwan, which is facing mounting threats from China, cannot afford to take on Beijing and Washington at the same time, he said.

Beijing claims the island democracy of 23 million people as its own, even though the Chinese Communist Party has never ruled Taiwan. In the most recent example of China’s attempts to intimidate its neighbor, Beijing launched large-scale military drills last week to practice a blockade of the island.

Taiwan depends on the United States for political support and military equipment under Washington’s policy of “strategic ambiguity,” which is intentionally vague about whether the U.S. would intervene if Beijing decided to follow through on its frequent threats to annex the island.

Taipei was reassured last month by a U.S. Defense Department memo, which named deterring a Chinese invasion of Taiwan as a top priority. But Trump’s transactional style and his suggestion that Taiwan should pay more for its defense — as well as his decision to temporarily suspend support for Ukraine in its war against Russia — have generated doubts about the administration’s backing.

Officials in Taipei have scrambled to contain the tariff fallout. In a video address released on Sunday, President Lai Ching-te said he would not impose retaliatory tariffs on the United States, opting instead to engage in negotiations with Washington. His government also announced a $2.7 billion package to support affected industries, including the industrial and agricultural sectors.

“The tariffs went beyond what can be considered as reasonable and are deeply unfair to our country,” Vice Premier Cheng Li-chiun said at a news conference announcing the package. “We must express our regret.”

Beijing has been even worse hit in Trump’s trade war, with multiplying tariffs taking the duty on China’s exports to the United States to a minimum of 104 percent.

While the escalating trade war will undoubtedly hurt China’s struggling economy, Beijing could also sense a geopolitical opportunity, analysts said, to cast itself as a more reliable trading partner to the world — including to Taiwan.

While tariffs are unlikely to change the Lai government’s more strident stance on China in the short term, Huang said they are “making people in Taiwan question whether cross-strait economic ties are really that dangerous.”

“When it comes to trade, the Trump administration seems even tougher than Beijing,” he added. “In the past few months, skepticism toward the U.S. has definitely grown.”

Taiwan is heavily reliant on trade with the United States. Taiwan exported $111 billion worth of goods to the U.S. last year, marking a 46 percent increase from the year before, according to official statistics. Servers and computer components were the top exports — with 60 percent of Taiwan’s exported computers components being sold to the United States.

The surge in trade is partly due to an artificial intelligence boom in the U.S., experts say, as well as a shift by many Taiwanese companies away from China during the U.S.-China trade war in Trump’s first administration. Taiwan’s cabinet last week argued that Taiwan should not be punished for these two trends, which actually reflect that trade with the island “has made great contributions to the U.S. economy and national security.”

The new Trump tariffs do not apply to semiconductors, where Taiwan dominates the global supply chain, producing around 90 percent of the globe’s most advanced chips.

Trump has criticized Taiwan’s hold on the semiconductor industry, accusing it of stealing America’s chip business. In an attempt to appeal to the new administration, TSMC pledged last month to invest $100 billion to expand its operations in the United States.

But the chip exemptions may not stop the tariffs from causing downstream impacts on the semiconductor supply chain, especially because most chips are not sent directly to the U.S. from Taiwan.

Instead, semiconductors are often integrated into other tech products or sent to other countries first to be incorporated into laptops, for example. Only 5 percent of Taiwan’s chip exports were sent to the United States in 2024, according to official statistics.

“The exemptions for semiconductors don’t really work,” said Ming-yen Ho, a nonresident fellow at the Research Institute for Democracy, Society and Emerging Technology, a government-funded Taipei think tank. “A single chip could get shipped to multiple countries throughout its lifetime to be manufactured and packaged and assembled.”

Experts point out that raising costs across the technology supply chain will hinder the United States’ ability to continue developing cutting-edge AI systems when the U.S. and China are locked in a fierce technology rivalry.

“Taiwan is a very important source of technological innovation for the United States and for the world,” said Dan Silver, chairperson of the American Chamber of Commerce in Taiwan. “We really have some concern about whether this could, in fact, risk making the cost of innovation higher at a time when there is geopolitical competition.”

In addition to the TSMC investment in the United States, Taipei also announced its intention in March to ramp up purchases of U.S. liquefied natural gas. In his Sunday address, Lai said Taiwan will work to reduce the trade deficit with the U.S. through increased procurement of American goods, including further purchases of U.S. military equipment.

“The U.S. aims to push other countries into negotiations through raising the tariffs, hoping they’ll buy more American goods and services,” said Lien Hsien-ming, president of Taipei-based think tank Chung-Hua Institution for Economic Research. “For Taiwan, key areas include natural gas and defense weapons.”