2024-07-18 00:57:32
His return prospects Donald Trump in the White House was one of the factors, which until now fueled the rally in Wall Street. His plan for tax breaks, to stimulate growth and relax the regulatory framework, is highly welcomed by the agricultural sector.
In fact, in the wake of the failed assassination attempt against him, the indices climbed to new historically high levels. However, the Republican presidential candidate, this time managed to… scare investors.
In an interview with Bloomberg Businessweek he argued that Taiwan should pay the US for its defense. He called out the semi-autonomous island for taking “almost 100%” of the work from the American manufacturing sector semiconductors (the chips known to all of us).
Why Taiwan is important
These remarks cast a shadow over the US commitment to defend it Taiwan in the event of an attack by China, which considers the democratically administered island its territory. And why does this worry investors so much?
Because Taiwan is one of the most important countries in the production of semiconductors, which are found in everything from mobile phones, home appliances and cars to high-tech defense equipment. THE TSMC often called the “company that drives the global economy”.
Dive for industry leaders
TSMC stock plunged in the wake of Trump’s remarks. The Dutch ASML, also one of the industry leaders, fell almost 11%, while the Japanese Tokyo Electron closed at -7.5%.
On Wall Street, Nvidia is down 6.5% this time, while Arm, AMD, Marvell, Qualcomm and Broadcom are down more than 5%.