Trump's Taiwan Defense Payment Demand Shakes TSMC Shares

Donald Trump has stirred controversy by insisting that Taiwan should pay the U.S. for its defense, claiming that Taiwan contributes nothing to America. This statement led to a drop in TSMC shares, a vital Taiwanese chip manufacturer. The remarks come amid escalating tensions between Taiwan and China, with potential global economic repercussions.

Donald Trump has called for Taiwan to pay the United States for its defense, arguing that the island nation contributes nothing to the U.S., leading to a dip in shares of major Taiwanese chip manufacturer TSMC. The comments were made in an interview with Bloomberg Businessweek.

"I know the people very well, respect them greatly. They did take about 100% of our chip business. I think, Taiwan should pay us for defense," Trump stated. TSMC's shares fell by more than 2% following the statement, whereas the broader market saw a 0.4% decline.

Taiwan and China have had escalating tensions, with Beijing ramping up military activities around the island. The U.S. has pledged support to Taiwan despite having no formal defense agreement, further straining the relations. TSMC continues to invest billions in new factories, especially in the U.S., to mitigate geopolitical risks.