President Joe Biden wants to bring the world’s most sophisticated chipmakers to the U.S. while Taiwan says he should offer them a better tax deal — one that could infuriate China.
Taiwanese officials are pushing hard for an agreement to eliminate the burden of double taxation, like the U.S. has with dozens of countries. In Congress on Wednesday, U.S. Treasury Secretary Janet Yellen acknowledged that the absence of such arrangements is a "very significant problem” and said the Treasury and State Department will "see if we can find a way” to address it.
Without a deal, Taiwan argues, would-be investors will be put off by the prospect of whopping tax bills — and the administration’s flagship industrial policy will fall short of its potential. The case will likely be pushed further by Taiwanese President Tsai Ing-wen, who’ll be in the U.S. during the coming week. Her visit is already raising tensions: China warned on Wednesday that a mooted meeting with House Speaker Kevin McCarthy would be seen as a "provocation.”