Taiwan-US trade deal slammed as 'sellout'

A trade deal recently reached between Taiwan and the United States was denounced by a Chinese mainland spokesman as a "complete capitulation" that sacrifices the interests of Taiwan residents and undermines the island's industrial development under economic coercion.

In line with the deal, the US will cut tariffs on imported Taiwan goods to 15 percent. In return, Taiwan has pledged to invest at least $250 billion in the US in sectors that include semiconductors and artificial intelligence, and to provide more than $250 billion in credit guarantees.

Addressing a news conference on Wednesday, Peng Qing'en, spokesman for the State Council Taiwan Affairs Office, said the trade negotiations were conducted under intense pressure from Washington, which he said used tariffs to force Taiwan to sharply increase investment in the US. The objective, he said, was to hollow out Taiwan's competitive industries.

Peng condemned the agreement and labeled it a "sellout pact", noting that Taiwan is pledging a $500 billion investment and faces the risk of relocating about 40 percent of its semiconductor supply chain to the US in exchange for a tariff cut from what he described as an already unreasonable 20 percent to 15 percent.

While Democratic Progressive Party authorities hailed the agreement as the "best treatment" for economies running trade surpluses with the US, Peng said the $500 billion investment equals roughly 80 percent of Taiwan's foreign exchange reserves. He said it is equivalent to each Taiwan resident contributing NT$680,000 ($21,500) as a "political donation" to the DPP authorities' strategy of external dependence.

As part of the deal, Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker and the island's biggest company, will build several new fabrication plants in Arizona. The company has already pledged to invest about $165 billion in the US.

According to US Commerce Secretary Howard Lutnick, the Trump administration aims to relocate 40 percent of Taiwan's semiconductor production capacity to the US.

Peng warned that such relocation would severely weaken Taiwan's industrial competitiveness and turn the island into a "hollow island". He accused the DPP authorities of misleading the public by portraying unilateral concessions as equal cooperation, calling the deal a "complete capitulation" packaged under the guise of a "Taiwan model".

The agreement, which still requires approval from Taiwan's "legislature", has also drawn strong criticism on the island.

Cheng Li-wun, chairwoman of the Chinese Kuomintang, criticized the DPP authorities for framing the agreement as a political achievement. She said forcing Taiwan's technology, talent, capital and economic foundations to move overseas constitutes a serious "security" crisis.

While the DPP authorities emphasized that the tariff rate matches those applied to Japan, South Korea and the European Union, the KMT argued that the pledged $500 billion investment amounts to 62.5 percent of Taiwan's GDP, far higher than the burden borne by other economies.

Analysts on the island have also warned that large-scale investments in the US could trigger a sharp depreciation of Taiwan's currency, severely affecting demand-driven industries on the island.

Peng said the agreement was forged through collusion between external forces and "Taiwan independence" separatists, arguing that it plunders the hard-earned efforts of Taiwan people, erodes the industrial foundation, and ultimately harms the future of both the people and the economy.

He said the outcome of the negotiations demonstrates that "Taiwan independence" is a dead end and that reliance on external forces is untenable.

"Without the support of a strong motherland, Taiwan risks becoming 'a piece of fat meat' for external powers and 'a lamb to be slaughtered at will'," Peng said.

According to statistics from the General Administration of Customs, total cross-Strait trade reached $314.33 billion in 2025. The mainland's exports to Taiwan rose 11.2 percent year-on-year, while imports from Taiwan increased 6 percent.

Peng said the continued growth of cross-Strait trade and economic exchanges, despite unfavorable external conditions and obstruction by the DPP authorities, demonstrates that strengthening cross-Strait economic cooperation serves the common interests of both sides and that any attempt to weaken such ties is doomed to fail.

"The so-called US-Taiwan trade and supply chain cooperation will only drain Taiwan dry, forcing it to cripple itself," Peng added.