Taiwan says its companies should decide on pledged US investments

TAIPEI, Feb 13 (Reuters) - It is up to companies to decide where best to spend the $250 billion Taiwan has pledged in investments in the United States, but their largest production capacity will remain at home, President Lai Ching-te said on Friday.

Trump administration officials signed on Thursday a final reciprocal trade agreement that confirmed a 15% U.S. tariff rate for imports from Taiwan, while committing Taiwan to a schedule for eliminating or lowering tariffs on nearly all U.S. goods.

The outline of the deal reached last month included Taiwan's pledge that its companies would invest $250 billion to boost production of semiconductors, energy and artificial intelligence in the United States.

That figure included $100 billion already committed by Taiwan Semiconductor Manufacturing Corp <2330.TW>, the world's main producer of advanced chips powering the trend towards AI.

Lai said he took office two years ago with the message that Taiwan's economic strategy was for the island to position itself globally and sell to the whole world.

"This round of tariff negotiations is also a very important opportunity. Its purpose is precisely this: to enable our industries to go global," he told reporters, when asked whether TSMC's U.S. investments would risk hollowing out Taiwan's industry.

"Whether it is TSMC or other industries, as long as their research and development centres are in Taiwan, their advanced manufacturing processes are in Taiwan, and their largest production capacity is in Taiwan, Taiwan can continue to develop steadily," Lai added.

The government respects companies' investment decisions, he said.

"This includes our negotiations with the United States this time: of course, the $250 billion in investment refers to companies' own, voluntary investment decisions."

TSMC, which is investing $165 billion in the U.S. state of Arizona to build factories, did not respond to a request for comment. Last month, it flagged that more U.S. manufacturing capacity was in the works.

The U.S. trade deal will need to be approved by Taiwan's parliament, where the opposition controls the majority of seats.

The agreement would need a "substantive review" by lawmakers and would not be railroaded through, Taiwan's largest opposition party, the Kuomintang, said in a statement.

The party added that it advocated a "Chip National Security Act" limiting the scale of overseas factories and barring transfer of core technologies without legislative approval. It did not say when it may propose such legislation.