Donald Trump Says Taiwan Should Pay The United States For Its Defence, ‘It Doesn’t Give Us Anything’

Benzinga

Benzinga's Premarket Prep team discuss Trump's recent comments.   PreMarket Prep is the #1 go-to source for everything you need to know before the market opens! Join our expert hosts as they break down the latest market trends, analyze key indicators, and provide actionable insights to help you navigate the trading day ahead.

Transcript

00:00Yeah, let's go ahead and go through some of those comments. So, of course, at this point,

00:05the odds on favorite to win the 2024 election, former president Donald Trump in an interview

00:14with Bloomberg Businessweek, like you said, basically pushed back on the idea that the US

00:19should just kind of like at all costs defend Taiwan. He said, Trump, Taiwan should pay us

00:26for defense. He said, you know, we're different than an insurance company. Taiwan doesn't

00:30give us anything, which I mean, with the semiconductors and everything, I don't know how true that

00:37is that Taiwan doesn't give us anything because, hey, if we could build all those chips at

00:41home, we'd be doing it, which is what we're trying to do right now, but we can't as of

00:45now. And then he said Taiwan did take 100% of our chip business. I don't know how much

00:51of it is Taiwan taking it versus U.S. companies outsourcing the manufacturing to other countries

00:58because it's cheaper. And so, you know, I mean, there's there's it's been talked about

01:04a lot the past few years, Dennis, that, you know, once once Covid hit and people realized

01:11how much semiconductors, how important they were to the economy. And, you know, that's

01:16like, oh, maybe it's not a good thing that we're reliant on other countries. We should

01:19start building cities at home. So Trump does have a good point there that like maybe we

01:22should be doing stuff at home. But to say that Taiwan, which clearly does not have the

01:27capabilities to defend itself against any invasion from China or any other adversaries.

01:33I mean, that's kind of been the you know, the U.S. deal with Taiwan is that we're going

01:40to be the guards and help. And even if we don't have to do anything, just kind of saying

01:45it like that's my thing is like Trump, Biden, whoever's in office, you don't even have to

01:51like send military over there or whatever. If you just say, yeah, if China does anything,

01:55they're done. That probably prohibits anything from happening right there.

01:58But by saying open the can of worms is what that commentary does. It makes you think that

02:04the administration, the next administration of Trump indeed does get in that they might be like,

02:10well, you know, we're kind of lukewarm towards it. If you're lukewarm towards it,

02:15does it give Xi a window to say, hey, if I was ever going to do this, I'd better do it under

02:19this administration here, because, you know, in four years, you know, and we're not saying

02:24Trump is in. We're saying in a hypothetical situation that Trump wins the election and

02:28comes in in January. There's like a four year window maybe where the U.S. isn't going to be

02:33fully defending Taiwan. So, again, we're not saying they're not going to. He didn't say

02:38they weren't going to. He just sounded lukewarm towards doing it. It wasn't. And on those comments,

02:44if you look from Taiwan Semiconductor last night, so bring up last night's chart,

02:49because everybody's going to say, well, this is ASML knocking down Taiwan Semiconductor.

02:54ASML was up last night ahead of its report. Taiwan Semiconductor was down five points ahead of this

03:01last night. So if you look from last night's trade, not this morning's trade, Taiwan Semiconductor

03:05has continued going down because of ASML. So it's two drivers. One, it was down five points

03:10on the Trump commentary last night. You also saw chips starting to dump last night as well

03:15a little bit. And then the ASML news comes in and now it's like, holy crap, Trump saying

03:21they may not defend ASML. They're hitting that down eight percent on their earnings.

03:26Let's just sell chips across the board. And that's what we've turned into here this morning.

03:30It's a chip wreck.

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