Office of the President Republic of China(Taiwan)

The Legislative Yuan, meeting in an extra session, passed pension reform bills for civil servants, public school employees, and political appointees this week, and on the afternoon of June 30 President Tsai Ing-wen made a statement on pension reform in which she thanked government colleagues and members of the general public who participated in and supported pension reform efforts. She also called on people throughout society to appreciate the progress that has been achieved thus far in nation's reform efforts, and maintain social solidarity. The following is a translation of President Tsai's remarks: The Legislative Yuan has been very busy this week. We have passed laws governing the pension system for public servants, public school employees, and political appointees. Now that these laws have been passed, pension system bankruptcy is no longer an urgent crisis in Taiwan. By the passage of these laws, we have lowered the income replacement rate for civil servant pensions, reduced or eliminated the preferential interest rate of 18% paid to retired civil servants and public school employees, and pushed back the age of eligibility for pensions. It is estimated that these actions will save the public coffers NT$1.4 trillion. We will take the money saved and inject it into the Public Service Pension Fund to ensure that it will remain viable for at least 30 years. At the same time, in order to uphold the interests of civil servants and public school employees, we have also designed our systemic reforms to provide transitional periods during which adjustments are gradually phased in, and established pension income floors to reduce the impact of these reforms. So first of all I want to thank all civil servants and public school employees. I thank all of you for your willingness, at a time when the nation is in difficulty, to sacrifice personal interests to the public good, and once again play a decisive role in helping to stabilize the nation. I especially want to thank the civil servants and public school employees who have already retired. You served the nation and society faithfully throughout your careers, and now you have helped the nation negotiate a difficult pass. I really cannot thank you enough. I do believe that the way you've acquitted yourselves will make our younger civil servants and public school employees take even greater pride in their work. Next, I want to thank all the members of the Legislative Yuan for your hard work. In particular, special thanks are due to the members of the ruling party caucus. The government is an integrated unit. We have all remained united and succeeded in smoothly achieving the difficult task of pension reform. Reform is what we pledged to do, and we have not let the people down. In addition, during the process of deliberations at the Legislative Yuan, we adopted many good-faith amendment proposals put forward by the opposition party caucuses, including suggestions to lower the pension eligibility age for indigenous persons, and to allow divorced spouses to claim pensions. The opposition parties also worked very hard on the pension reform, so I also want to express my thanks to them. I firmly believe that history will remember the contributions of the Ninth Legislative Yuan. Third, I want to thank our colleagues at the Examination Yuan and the Executive Yuan for their hard work, as well as the members of the Pension Reform Committee. Consensus building is a challenging process, but we all know that we had to go through that step if the pension reform effort was to succeed. Your participation has brought about the completion of a very big mission for Taiwan. In this process, Vice President Chen Chien-jen, as convener of the Pension Reform Committee, made every effort to communicate with society and help as many people as possible understand the thinking behind pension reform. And Minister without Portfolio Lin Wan-i (林萬億), as the deputy convener, conscientiously solicited a wide range of views and led the Pension Reform Office as it worked to draft a pension reform proposal. I especially want to thank those two for their persistence and dedication. Fourth, I want to thank all the people of Taiwan. Democracy is an important part of this nation's heritage, and our highest value. Over the past year, there has been some tumult, to be sure, but the firm support of the people of Taiwan for reform got us through the tough spots. This was key. Democracy has once again made Taiwan great. Democracy is no longer just a value; now it is a method of resolving controversies. For this reason, I thank all the people from the bottom of my heart. To be able to lead this kind of nation is a source of incomparable honor and pride. Pension reform affects the vital interests of people from all different lines of work. So even broaching the topic of pension reform can spark all sorts of controversy. And that is why, when previous presidents tried to promote pension reform, they always fell a bit short of their goal. We've been subject to intense pressure from all quarters recently, but we stood firm. This round of pension reform has an important significance, for we've proven that pension reform is neither a political minefield, nor a taboo issue that absolutely cannot be broached. And no one will become destitute because of the pension reform passed during the Tsai Ing-wen administration. In the process of reform, pressure is inevitable, and those pressures are mine to bear. All criticisms should be directed to me. I urge the public to stay calm. Above all, please don't subject certain members of the Legislative Yuan to irrational verbal attacks. If someone has to pay the price, I will do it. There is no need to make life difficult for anyone else. I realize that some people still take issue with the pension reform. Some feel that the reforms have not gone far enough, and some feel they are moving too slowly. Such criticisms are expressions of concern for the nation, and I humbly accept them. However, I call upon everyone in our society to appreciate the progress we've achieved in our reform efforts. All systems need to be continually adjusted to stay in synch with the times, and our pension system is no exception. In carrying out the pension reform, we established a mechanism for regular reviews. Now that we've had this successful experience, when it next comes time for a review of the pension system, we will have more confidence. My fellow citizens, Taiwan has finally achieved a sustainable pension system under which "the government can afford to pay for pensions, and retirees can receive them, now and in the future." Despite all the pressure, we endured, and made good on our pledge to carry out reform. The completion of our reform efforts marks the beginning of social solidarity. This country still has many other problems that we need to continue working on. But since we completed something as difficult and complex as pension reform, is there anything we Taiwanese can't accomplish? And finally, once again, I want to thank everyone who took part in this pension reform, and the members of the public who supported our efforts. People of Taiwan—let's keep moving forward!

On the evening of January 22, President Tsai Ing-wen and Vice President Chen Chien-jen attended the closing ceremony of the national congress on pension reform, where they thanked the participants for their efforts to promote pension reform. The president stated that the day's congress demonstrated that the Taiwan society is capable of engaging in rational public discourse: "If we can successfully reform the pension system, then there is no reform that Taiwan is incapable of completing." In remarks, President Tsai said that by holding the national congress on pension reform, we have used concrete action to demonstrate that the Taiwan society is capable of engaging in rational public discourse. She thanked all the Pension Reform Committee members for sharing their valuable opinions, which will improve the reform proposal. She also thanked Vice President Chen for personally chairing the meetings of the Pension Reform Committee since last May, and for actively explaining to interested parties the significance of the reform effort. The vice president's patient and gentle way of dealing with various groups and differing opinions, she said, has been key to the smooth progress of the reform effort, and history will remember the drawings that he personally made by hand to explain the reform to the public. In addition, President Tsai also thanked Minister without Portfolio Lin Wan-i (林萬億) for bearing the brunt of pressure and criticism, even putting up with being falsely maligned. Despite everything, he chose to take up the responsibility of leading everyone at the Executive Yuan's Pension Reform Office as they solicited everyone's views and molded them into a concrete reform proposal. History will also remember his tremendous effort. Such tumult always dies down eventually, said the president, who added: "If we can successfully reform the pension system, then there is no reform that Taiwan is incapable of completing." Now that the pension reform congress has been completed, the government will formally put forward a final pension reform proposal and forward a related legislative bill to the Legislative Yuan for deliberations. But we still have a ways to go. A lot of different views still have to be expressed, especially in the Legislative Yuan. With respect to this reform, there are certain principles on which government is insistent, but it will continue communicating with all sectors of society to minimize the impact. President Tsai stressed that we are acting in line with the collective will of the people to build a more ideal system, and the country is moving forward one step at a time toward a fairer and better future. Vice President Chen delivered remarks at the very beginning of the closing ceremony. He also thanked participants for spending an entire day contributing their wisdom and sharing their penetrating insights regarding pension reform so that everyone can together seek consensus on the matter. The vice president stated that the central government agencies responsible for pension reform will most certainly treat everyone's valuable opinions as important reference as they draft legislative amendments in the future, and during this process they will continue to solicit a broad range of opinion. Once everyone's views have been properly evaluated, the government will need to carefully calculate budgetary matters, especially as they impact the economic well-being of individuals, in order to devise a fair way of amending the law that will yield an equitable distribution of wealth. Vice President Chen also stated that if, due to time constraints, the participants at the congress were unable to fully express their views on pension reform, or if they felt that the chairperson of any particular group did not fully express the views of the group in its report, they are welcome to mail their views in writing to the Pension Reform Office, or to send in their views online or via email and have the office forward their views to the central government agencies in charge of drafting legislative amendments. The vice president expressed his hope that the agencies involved in this undertaking—including the Ministry of Civil Service, the Ministry of Education, and the Ministry of Labor—can actively complete the drafting of legislative amendments. He also specially called upon the members of the Legislative Yuan and the Examination Yuan ministers without portfolio to bring about the speedy passage of all legislative bills related to pension reform.

In remarks at the opening ceremony for a national congress on pension reform on the morning of January 22, President Tsai Ing-wen stressed that the goal of pension reform is to ensure a sustainable pension system in which "the government can afford to pay pensions, and retirees can receive them, now and in the future." What we are proposing today is a sound approach to reform. We aren't insisting on solving everything all at once; rather, we will seek to gradually improve the system over a period of years in order to cushion the impact of the changes that will be made. "If we don't act on pension reform today, we'll regret it immediately," said the president, adding that we absolutely must succeed, and the longer we wait, the more painful the changes will be. For some time now, said the president, we've been seeing a lot of misinformation, and various attempts have been made to keep this congress from taking place, but there is no way this could have delayed the process. The reform effort simply must move ahead on schedule. The following is a translation of President Tsai's complete remarks: I believe all of you know that Vice President Chen Chien-jen held a press conference the other day and put forward, in a very responsible manner, a draft pension reform proposal to serve as the basis for discussions during this national congress. This draft proposal is the result of 20 meetings of the Pension Reform Committee as well as four regional pension reform congresses. In the process, we have received a broad range of input. The draft proposal puts forward a very sound plan. We aren't insisting on solving everything all at once; rather, we will seek to gradually improve the system over a period of years in order to minimize the impact. The provisions of the draft proposal would eliminate the 18% preferential interest rate, lower the income replacement rate for civil servants and educators, set a pension income floor, phase in adjusted premium rates, improve pension fund efficiency, and establish a mechanism for the government to boost pension fund financial resources. In addition, the draft proposal would also deal with unreasonable facets of the current pension system including decoupling party and government pensions, and doing away with the practice of counting the earnings of political appointees toward their earnings as career civil servants, to which the 18% preferential interest rate applies. A key purpose of these actions is to ensure a sustainable system under which "the government can afford to pay for pensions, and retirees can receive them, now and in the future." I strongly hope that you will all be able to express your valuable opinions during today's congress and help bring about a more sound system. For some time now we've been seeing a lot of misinformation. People have been spreading rumors on the LINE app, and various attempts have even been made to keep this congress from taking place, but there is no way this could have delayed the process. The reform effort simply must move ahead on schedule. Many people have asked why pension reform must involve so many meetings. We are doing this because we've reviewed the reasons for the failed reform attempts of the past. Past reform efforts were short on public discussion. This time, before the government puts forward a final proposal and submits it to the Legislative Yuan for deliberations, we want to open up the process for "expanded participation" so that representatives of all stakeholders have ample opportunity to state their views. The pension funding crisis has been building for decades. To spend a half year analyzing the problem and developing a reform proposal is not only time well spent, it is truly necessary. I firmly believe that many years from now, when we all look back at these past few months, we'll be very glad that we buckled down and got through this process. This sort of process is significant in two big ways. First, we are enabling society to better understand the details and the importance of pension reform. In the past, there was majority support for reform, but the great complexity of the system meant that a lot of people didn't understand the many problems involved. Now, however, the pension system crisis has been fully exposed, so we have a better understanding of the importance and urgency of reform, and we're more determined to carry through. Second, we need to devise a reform proposal that is more concrete and reasonable. From the very beginning, we've never felt that pension reform can be treated as a "my way or the highway" proposition. Nor is it a matter of the government issuing an announcement then whipping up support for it. People have different ideas and different positions. Disputes are inevitable. Meetings focusing on pension reform have of course been contentious. But as a result, we've been able to hear lots of different viewpoints and incorporate them into our reform proposal. In one meeting after another, we have heard very valuable views regarding many different issues, such as calls to have the military pension system handled separately, the question of whether there should be special pension age exceptions for police officers, firefighters and elementary and middle school teachers, questions concerning the currently favored gradual approach to pension reform, and the setting of a pension income floor. I know there will be people protesting today outside the Office of the President. When anyone's interests are affected, they will feel dissatisfied. I can understand how they feel. However, only a sustainable pension system can ensure that everyone will be able to receive pension benefits, including those of you who are out protesting today, and your children. Four years ago this January, at this very same location, former President Ma Ying-jeou spoke in strong terms about the urgent need for pension reform. He said that a pension system involves both self help and mutual help. He said it is not a matter of "your pension" or "my pension," but of "our pensions" and "the pensions of our children and grandchildren." The pension system, he said at that time, "must not and will not become insolvent." So you can see that pension reform is not a "blue versus green" issue. It is not a political football. It is something that any political leader regardless of their party affiliation must undertake for the sake of the long-term good of the country. Former President Ma declared: "No matter how great the challenge, we have no choice but to reform the pension system." Unfortunately, the previous administration's pension reform effort did not succeed in the end. Taiwan cannot withstand yet another failure. We simply must succeed. The longer we wait, the more painful the changes will be. With the utmost sincerity, I urge all my fellow citizens to take a close look at all the proposals that have been put forward. If you do that, I firmly believe you will find that we're not bully any particular employment category, and we certainly won't make it impossible for people to survive. This is a moderate and gradual reform, with everyone yielding a bit and the different generations lending each other a helping hand. The fact is, we have a lot of retired military personnel, civil servants, and educators in our country who are willing to sacrifice their personal interests so that everyone can weather this crisis together. And there are young civil servants who don't want to see the pension system go bankrupt. They want it to be sustainable. I want to specially thank them for supporting pension reform. Ensuring a secure retirement for all is a responsibility that the government cannot shirk. After this reform is carried out, our pension system will no longer be under threat of bankruptcy, and will be on strong financial footing for about 25 years. I want to emphasize once more my hope that Taiwan will periodically review its pension system every five to ten years. That is the only way to ensure secure retirements for generations to come. If we don't act on pension reform today, we'll regret it immediately. For Taiwan's sake, we must take up this challenge together. Well, the congress is about to get started. I hope you can all help the discussions stay focused, because Taiwan's future is in our hands. If we can stay focused, then the path to a better future for Taiwan will come clearly into view.

President Lai Ching-te recently met with Stephen Yates, senior research fellow at the Heritage Foundation’s Asian Studies Center; Buck Sexton, host of the American radio program The Clay Travis and Buck Sexton Show; and Mr. Sexton’s brothers Mason and Keats. President Lai was also interviewed by Buck Sexton and responded to questions regarding cross-strait relations, the regional landscape, national defense, the economic and trade partnership between Taiwan and the United States, and Taiwan’s social welfare policies. The interview was broadcast on the early morning of October 7. Following is the text of the questions and the president’s responses: Q: One of the things we’ve noticed that has already gotten some attention back in the States is the sense of civic responsibility here, how respectful and law-biding everyone is, how safe everyone feels on your streets. It is inspiring to tell Americans about this. I also wanted to ask you about the situation right now with your neighbor, China. There’s obviously a lot of global concern about a sense of rhetoric heating up, a sense that there is a pathway now that is becoming more imminent that there could be a crisis. How do you want to describe the situation right now, for specifically an American audience? President Lai: First of all, I am very glad that you have seen a lot of things during your stay in Taiwan and that you are having a fruitful trip so far. I also want to thank you for commending our civil society. In the international community, Taiwan is often lauded as being a place where the most beautiful scenery is actually its people. Recently, due to a typhoon, a barrier lake overflowed in Hualien, causing a significant number of injuries and deaths. Streets and houses were covered in mud. Taiwanese society mobilized to help people affected. We had a long holiday weekend this past weekend. On the first day, 30,000 people traveled to Hualien to offer assistance. And on both the second and third days, another 40,000 went, meaning that over 100,000 people, of their own accord, took their shovels to help those affected. In our society, these people were referred to “superheroes with shovels.” So you can feel that in Taiwan there is a lot of warmth. People are kind. So our streets, at nighttime or daytime, are generally very safe. Your question was about Taiwan’s relations with China. I very much hope that everyone in the world who pays attention to Taiwan-China issues can be clear about several things. Firstly, the Republic of China and the People’s Republic of China are not subordinate to each other. Taiwan is not a part of the PRC. China does not have the right to invade Taiwan. Secondly, China has been holding military exercises in the Taiwan Strait, undermining peace and stability in the region. So it is China – not Taiwan – that is disrupting the cross-strait status quo. The fact that the Taiwanese people seek to protect their sovereignty and pursue a way of life based on democracy, freedom, and human rights should not be seen as a provocation against China. Thirdly, even though Taiwan is facing increasing threats from China, Taiwan has not given up on seeking peace and mutual prosperity across the strait. We understand that peace is priceless and that there are no winners in war. Peace and stability across the Taiwan Strait are essential elements of global security and prosperity. Our pursuit of peace is an ideal, not a fantasy. We believe that to achieve peace, there must be strength. Since taking office, I have implemented the Four Pillars of Peace action plan. The first pillar is strengthening Taiwan’s national defense. Our defense spending, as defined by NATO, will reach 3.32 percent of GDP next year. And this will increase to 5 percent of GDP by 2030. We are procuring arms from the United States and partners across the international community. At the same time, we are promoting indigenous defense capabilities. We will work with the international community to codevelop arms, including R&D, design, and manufacturing. This will allow the domestic defense industry to grow and contribute to Taiwan’s security. Drones, unmanned submarines, and robotics are all areas that Taiwan will prioritize in the future. The second pillar is enhancing our economic resilience. In 2010, 83.8 percent of Taiwan’s outbound investment went to China. But last year, this number was only 7 percent. The United States is now Taiwan’s largest destination for outbound investment. In other words, we are not putting all of our eggs in the same basket. We hope that Taiwan’s industries will be rooted in Taiwan, deploy globally, and market across the world. This will not only strengthen our economy but also make it more resilient, thereby safeguarding Taiwan’s security. The third pillar is standing together with the United States and other free and democratic countries to bolster joint deterrence. This will allow us to prevent war by preparing for one. And fourthly, Taiwan is willing to engage in dialogue with China based on parity and dignity. Through exchanges and cooperation, we can achieve the goal of peace and mutual prosperity. I noticed that US President Donald Trump once said publicly that Xi Jinping actually called him and stated that he would not attack Taiwan during President Trump’s term in office. We hope that Taiwan will continue to enjoy the support of President Trump. If he is able to convince Xi Jinping to permanently renounce the use of force against Taiwan, President Trump will surely win the Nobel Peace Prize. Q: If you could speak directly to President Trump about Taiwan’s situation right now, the security situation more specifically, what would you want him to know?  President Lai: If I had the chance to meet President Trump in person and talk about the current cross-strait situation, I would suggest that he take note of the fact that Xi Jinping is not just holding ever-larger military exercises in the Taiwan Strait but expanding China’s military deployment in the South and East China Seas. China’s military exercises now extend across the Indo-Pacific region. Its aircraft carriers are moving beyond the first island chain and second island chain. And its northern fleet even sailed around Japan for a week. Chinese naval vessels also conducted live-fire exercises in Australia’s exclusive economic zone. The situation in the Indo-Pacific region is changing constantly, and tensions are rising. So the issue is not only a possible annexation of Taiwan. If it is able to annex Taiwan, China will be in a stronger position to compete with the United States and alter the rules-based international order. This would eventually also impact US interests. So we hope that President Trump can continue to maintain peace and stability in the Indo-Pacific. Taiwan is determined to ensure its national security. We will fulfill our responsibility and work with free and democratic countries to maintain regional peace and stability. Q: Because America has learned some difficult lessons about foreign policy and foreign policy intervention, there is a focus on partners who will carry their weight for their own defense and have a willingness to fight. If anyone in America, policymaker or citizen, has a question about whether Taiwan is willing to defend its own sovereignty, what would you say to them? President Lai: I would tell them that Taiwan is absolutely determined to ensure its own national security. Peace and stability across the Taiwan Strait are indispensable elements in global security and prosperity. So when Taiwan looks after its own national security, it shows that Taiwan is committed to protecting regional peace and stability as well. That is why, as I mentioned before, we are continuing to increase our national defense budget. So during former President Tsai Ing-wen’s term, the national defense budget was increased from 1.9 percent of GDP to 2.5 percent. Next year, it will reach 3.32 percent. And we hope to increase this to 5 percent by 2030. This would be five years earlier than NATO’s own goal. Also, we have established the Whole-of-Society Defense Resilience Committee under the Office of the President. This committee brings various sectors of Taiwan together and combines the strengths of the public and private sectors to carry out exercises and drills that enhance whole-of-society defense. I also convened a high-level national security meeting in which we defined the Chinese Communist Party regime as a foreign hostile force; and I proposed 17 strategies to address the five major threats we face from China. These will translate into more than a hundred amendments to our national security laws, which will be reviewed by the Legislative Yuan during the current session. This will put Taiwan on a stronger legal footing, bolster its national defense, and allow people to contribute their power toward safeguarding our nation and protecting regional peace and stability. I believe that people help those who help themselves. So I very much agree with your idea that Taiwan and other countries should meet their own responsibilities. Only by helping ourselves can we expect help from others. And when we show unity and work together, that is when deterrence is at its strongest; and that is when we will be able to safeguard peace and stability in the world. Q: Obviously, there’s a tremendous global and American, specifically, interest in artificial intelligence and the future of it. Also very interesting is the incredible facility that TSMC has built and is building out more in Arizona. I would like to ask you to speak to the economic partnership, specifically in advanced technology, microchip manufacturing, and artificial intelligence, and the relationship between Taiwan and America going forward, and how you view that to grow and bring prosperity for both countries. President Lai: So we all know that Taiwan’s technology industry has performed well. This is the result of decades of cooperation among Taiwan’s industries, government, academia, and R&D sector, as well as the support of the Taiwanese people. But I must also note with appropriate humility that TSMC and the Taiwanese semiconductor industry are still only one part of a bigger ecosystem, and do not represent the whole system. So if you look at the entire semiconductor ecosystem, the United States is strong in areas such as innovation, R&D, and design. And it is also the biggest market. Japan is strong in raw materials and related equipment. And the Republic of Korea, they have flash memory. Taiwan’s strength is in wafer manufacturing. And the Netherlands makes the critical equipment that is used to make semiconductors. But in the whole ecosystem, you can see that around 80 percent of profits go to the United States. So for semiconductors, I would say the United States is still the leader in this ecosystem. Looking ahead, as we face the AI era, every nation in the semiconductor ecosystem will be extremely important. And the United States will continue to lead the world in this. So Taiwan is very willing to work with the United States to achieve this goal. We want to help the United States reindustrialize and become a global AI hub. We want the United States to continue to lead the world in this new AI era and we want to help make America great again. So with regard to Taiwan’s semiconductor industry, we see it as an important responsibility in terms of ensuring the world’s future prosperity. That is why the Taiwan government has been very supportive of TSMC’s investments in the United States and Japan, as well as Germany. In the future, when the United States has reindustrialized and become a global AI hub, I am sure that TSMC will continue to play a crucial role. Q: Over the course of meetings with various members of your government, I learned something very interesting that has to do with family formation, a problem we have also started to look at in America. It will be very interesting, I think, to the American audience, to hear of countries that are trying to use policy to address issues like encouraging marriage and encouraging children so that a society can replenish – so that there is replenishment and there is resiliency. Could you please speak to some of the ways that you are encouraging people to have more kids here? What is Taiwan doing and how are those initiatives going so far? President Lai: I am very glad that you look positively at what we have been doing in Taiwan. Actually, Taiwan’s policies were made with reference to what the United States and other countries have been doing. Concerning our strategies: first, the government is supporting families in jointly raising children from birth to six years old by providing monthly subsidies. Tuition is also free for both public and private high schools and vocational schools. We also have a long-term care system for senior citizens. Across Taiwan, there are some 15,000 service centers with around 100,000 long-term care staff who look after seniors over the age of 65 as well as people with disabilities so that they can receive quality care. Young people who want to get married and have children are given priority in applying for social housing. If they want to buy a home, they can get government funding to subsidize the interest on their mortgage. And if they are renting, they can get a rent subsidy from the government. For couples who are having problems conceiving, the government subsidizes fertility treatment. We are also cutting taxes. Taiwan’s government is currently investing more in our society and cutting taxes by more than ever before in our history. These initiatives will help our young people feel confident that they can get married, have children, and will be able to raise them. I note that President Trump is also cutting taxes. We want to reduce the burden on households so that more people can start a family. This will promote social stability, prosperity, development, and continual growth for the country.

On the morning of August 1, President Lai Ching-te delivered remarks at the Presidential Office on the response to the reciprocal tariff policy of the United States. President Lai explained that technical consultations with the US are finished, but as the final concluding meeting has not yet taken place, 20 percent has been set for Taiwan as an interim tariff rate. The president said that Taiwan will work towards a more favorable and reasonable rate in the subsequent negotiations, and that the US has expressed its willingness to continue talks. He added that a support plan for Taiwan’s export supply chain in response to US tariffs has been proposed to assist small- and medium-sized enterprises (SMEs) in responding to the US tariff policy. A translation of President Lai’s remarks follows: Earlier today, the US government informed our lead negotiator, Vice Premier Cheng Li-chiun (鄭麗君), that an interim tariff rate for Taiwan has been set at 20 percent. Since April 2, when the US introduced its new tariff policy targeting countries worldwide, Taiwan has actively engaged in four in-person rounds of negotiation and multiple discussions over videoconference with the US government. Throughout the process, both sides have negotiated in good faith based on the shared goal of addressing the trade deficit between Taiwan and the US and creating complementary and mutually beneficial outcomes. Although we have achieved an interim reduction in the tariff rate from 32 percent to 20 percent at this point in the negotiations, 20 percent was never our goal. We hope to work towards a more favorable and reasonable rate for Taiwan in the subsequent negotiations, and the US has expressed its willingness to continue talks. We have finished technical consultations, but as the final concluding meeting has not yet taken place, a final tariff rate has not yet been reached. This is the reason for the setting of an interim tariff rate. I extend my sincere gratitude to Vice Premier Cheng and Minister without Portfolio of the Executive Yuan Yang Jen-ni (楊珍妮) for working tirelessly over the past few months leading the negotiation team, remaining on call whether in Taiwan or the US. From here in Taiwan I, along with Vice President Bi-khim Hsiao, National Security Council Secretary-General Joseph Wu (吳釗燮), Premier Cho Jung-tai (卓榮泰), and Secretary-General Pan Men-an (潘孟安), have also provided full support to our negotiating team in the US. Regardless of the final tariff rate, Taiwan’s industries will inevitably be impacted. I am deeply grateful to Premier Cho for proposing on April 4 a support plan for Taiwan’s export supply chain in response to US tariffs, and for holding over 20 industry consultation sessions. The special budget has also been increased from NT$88 billion to NT$93 billion. This special act has already been submitted to the Legislative Yuan and passed review. I hope that the Executive Yuan will promptly submit the budget request for legislative review so that the special budget can be implemented as soon as possible to assist SMEs in responding to this new US tariff policy.

In a recent interview on Nippon Television’s news zero program, President Lai Ching-te responded to questions from host Mr. Sakurai Sho and Yomiuri TV Shanghai Bureau Chief Watanabe Masayo on topics including reflections on his first year in office, cross-strait relations, China’s military threats, Taiwan-United States relations, and Taiwan-Japan relations. The interview was broadcast on the evening of May 19. During the interview, President Lai stated that China intends to change the world’s rules-based international order, and that if Taiwan were invaded, global supply chains would be disrupted. Therefore, he said, Taiwan will strengthen its national defense, prevent war by preparing for war, and achieve the goal of peace. The president also noted that Taiwan’s purpose for developing drones is based on national security and industrial needs, and that Taiwan hopes to collaborate with Japan. He then reiterated that China’s threats are an international problem, and expressed hope to work together with the US, Japan, and others in the global democratic community to prevent China from starting a war. Following is the text of the questions and the president’s responses: Q: How do you feel as you are about to round out your first year in office? President Lai: When I was young, I was determined to practice medicine and save lives. When I left medicine to go into politics, I was determined to transform Taiwan. And when I was sworn in as president on May 20 last year, I was determined to strengthen the nation. Time flies, and it has already been a year. Although the process has been very challenging, I am deeply honored to be a part of it. I am also profoundly grateful to our citizens for allowing me the opportunity to give back to our country. The future will certainly be full of more challenges, but I will do everything I can to unite the people and continue strengthening the nation. That is how I am feeling now. Q: We are now coming up on the 80th anniversary of the end of World War II, and over this period, we have often heard that conflict between Taiwan and the mainland is imminent. Do you personally believe that a cross-strait conflict could happen? President Lai: The international community is very much aware that China intends to replace the US and change the world’s rules-based international order, and annexing Taiwan is just the first step. So, as China’s military power grows stronger, some members of the international community are naturally on edge about whether a cross-strait conflict will break out. The international community must certainly do everything in its power to avoid a conflict in the Taiwan Strait; there is too great a cost. Besides causing direct disasters to both Taiwan and China, the impact on the global economy would be even greater, with estimated losses of US$10 trillion from war alone – that is roughly 10 percent of the global GDP. Additionally, 20 percent of global shipping passes through the Taiwan Strait and surrounding waters, so if a conflict breaks out in the strait, other countries including Japan and Korea would suffer a grave impact. For Japan and Korea, a quarter of external transit passes through the Taiwan Strait and surrounding waters, and a third of the various energy resources and minerals shipped back from other countries pass through said areas. If Taiwan were invaded, global supply chains would be disrupted, and therefore conflict in the Taiwan Strait must be avoided. Such a conflict is indeed avoidable. I am very thankful to Prime Minister of Japan Ishiba Shigeru and former Prime Ministers Abe Shinzo, Suga Yoshihide, and Kishida Fumio, as well as US President Donald Trump and former President Joe Biden, and the other G7 leaders, for continuing to emphasize at international venues that peace and stability across the Taiwan Strait are essential components for global security and prosperity. When everyone in the global democratic community works together, stacking up enough strength to make China’s objectives unattainable or to make the cost of invading Taiwan too high for it to bear, a conflict in the strait can naturally be avoided. Q: As you said, President Lai, maintaining peace and stability across the Taiwan Strait is also very important for other countries. How can war be avoided? What sort of countermeasures is Taiwan prepared to take to prevent war? President Lai: As Mr. Sakurai mentioned earlier, we are coming up on the 80th anniversary of the end of WWII. There are many lessons we can take from that war. First is that peace is priceless, and war has no winners. From the tragedies of WWII, there are lessons that humanity should learn. We must pursue peace, and not start wars blindly, as that would be a major disaster for humanity. In other words, we must be determined to safeguard peace. The second lesson is that we cannot be complacent toward authoritarian powers. If you give them an inch, they will take a mile. They will keep growing, and eventually, not only will peace be unattainable, but war will be inevitable. The third lesson is why WWII ended: It ended because different groups joined together in solidarity. Taiwan, Japan, and the Indo-Pacific region are all directly subjected to China’s threats, so we hope to be able to join together in cooperation. This is why we proposed the Four Pillars of Peace action plan. First, we will strengthen our national defense. Second, we will strengthen economic resilience. Third is standing shoulder to shoulder with the democratic community to demonstrate the strength of deterrence. Fourth is that as long as China treats Taiwan with parity and dignity, Taiwan is willing to conduct exchanges and cooperate with China, and seek peace and mutual prosperity. These four pillars can help us avoid war and achieve peace. That is to say, Taiwan hopes to achieve peace through strength, prevent war by preparing for war, keeping war from happening and pursuing the goal of peace. Q: Regarding drones, everyone knows that recently, Taiwan has been actively researching, developing, and introducing drones. Why do you need to actively research, develop, and introduce new drones at this time? President Lai: This is for two purposes. The first is to meet national security needs. The second is to meet industrial development needs. Because Taiwan, Japan, and the Philippines are all part of the first island chain, and we are all democratic nations, we cannot be like an authoritarian country like China, which has an unlimited national defense budget. In this kind of situation, island nations such as Taiwan, Japan, and the Philippines should leverage their own technologies to develop national defense methods that are asymmetric and utilize unmanned vehicles. In particular, from the Russo-Ukrainian War, we see that Ukraine has successfully utilized unmanned vehicles to protect itself and prevent Russia from unlimited invasion. In other words, the Russo-Ukrainian War has already proven the importance of drones. Therefore, the first purpose of developing drones is based on national security needs. Second, the world has already entered the era of smart technology. Whether generative, agentic, or physical, AI will continue to develop. In the future, cars and ships will also evolve into unmanned vehicles and unmanned boats, and there will be unmanned factories. Drones will even be able to assist with postal deliveries, or services like Uber, Uber Eats, and foodpanda, or agricultural irrigation and pesticide spraying. Therefore, in the future era of comprehensive smart technology, developing unmanned vehicles is a necessity. Taiwan, based on industrial needs, is actively planning the development of drones and unmanned vehicles. I would like to take this opportunity to express Taiwan’s hope to collaborate with Japan in the unmanned vehicle industry. Just as we do in the semiconductor industry, where Japan has raw materials, equipment, and technology, and Taiwan has wafer manufacturing, our two countries can cooperate. Japan is a technological power, and Taiwan also has significant technological strengths. If Taiwan and Japan work together, we will not only be able to safeguard peace and stability in the Taiwan Strait and security in the Indo-Pacific region, but it will also be very helpful for the industrial development of both countries. Q: The drones you just described probably include examples from the Russo-Ukrainian War. Taiwan and China are separated by the Taiwan Strait. Do our drones need to have cross-sea flight capabilities? President Lai: Taiwan does not intend to counterattack the mainland, and does not intend to invade any country. Taiwan’s drones are meant to protect our own nation and territory. Q: Former President Biden previously stated that US forces would assist Taiwan’s defense in the event of an attack. President Trump, however, has yet to clearly state that the US would help defend Taiwan. Do you think that in such an event, the US would help defend Taiwan? Or is Taiwan now trying to persuade the US? President Lai: Former President Biden and President Trump have answered questions from reporters. Although their responses were different, strong cooperation with Taiwan under the Biden administration has continued under the Trump administration; there has been no change. During President Trump’s first term, cooperation with Taiwan was broader and deeper compared to former President Barack Obama’s terms. After former President Biden took office, cooperation with Taiwan increased compared to President Trump’s first term. Now, during President Trump’s second term, cooperation with Taiwan is even greater than under former President Biden. Taiwan-US cooperation continues to grow stronger, and has not changed just because President Trump and former President Biden gave different responses to reporters. Furthermore, the Trump administration publicly stated that in the future, the US will shift its strategic focus from Europe to the Indo-Pacific. The US secretary of defense even publicly stated that the primary mission of the US is to prevent China from invading Taiwan, maintain stability in the Indo-Pacific, and thus maintain world peace. There is a saying in Taiwan that goes, “Help comes most to those who help themselves.” Before asking friends and allies for assistance in facing threats from China, Taiwan must first be determined and prepared to defend itself. This is Taiwan’s principle, and we are working in this direction, making all the necessary preparations to safeguard the nation. Q: I would like to ask you a question about Taiwan-Japan relations. After the Great East Japan Earthquake in 2011, you made an appeal to give Japan a great deal of assistance and care. In particular, you visited Sendai to offer condolences. Later, you also expressed condolences and concern after the earthquakes in Aomori and Kumamoto. What are your expectations for future Taiwan-Japan exchanges and development? President Lai: I come from Tainan, and my constituency is in Tainan. Tainan has very deep ties with Japan, and of course, Taiwan also has deep ties with Japan. However, among Taiwan’s 22 counties and cities, Tainan has the deepest relationship with Japan. I sincerely hope that both of you and your teams will have an opportunity to visit Tainan. I will introduce Tainan’s scenery, including architecture from the era of Japanese rule, Tainan’s cuisine, and unique aspects of Tainan society, and you can also see lifestyles and culture from the Showa era.  The Wushantou Reservoir in Tainan was completed by engineer Mr. Hatta Yoichi from Kanazawa, Japan and the team he led to Tainan after he graduated from then-Tokyo Imperial University. It has nearly a century of history and is still in use today. This reservoir, along with the 16,000-km-long Chianan Canal, transformed the 150,000-hectare Chianan Plain into Taiwan’s premier rice-growing area. It was that foundation in agriculture that enabled Taiwan to develop industry and the technology sector of today. The reservoir continues to supply water to Tainan Science Park. It is used by residents of Tainan, the agricultural sector, and industry, and even the technology sector in Xinshi Industrial Park, as well as Taiwan Semiconductor Manufacturing Company. Because of this, the people of Tainan are deeply grateful for Mr. Hatta and very friendly toward the people of Japan. A major earthquake, the largest in 50 years, struck Tainan on February 6, 2016, resulting in significant casualties. As mayor of Tainan at the time, I was extremely grateful to then-Prime Minister Abe, who sent five Japanese officials to the disaster site in Tainan the day after the earthquake. They were very thoughtful and asked what kind of assistance we needed from the Japanese government. They offered to provide help based on what we needed. I was deeply moved, as former Prime Minister Abe showed such care, going beyond the formality of just sending supplies that we may or may not have actually needed. Instead, the officials asked what we needed and then provided assistance based on those needs, which really moved me. Similarly, when the Great East Japan Earthquake of 2011 or the later Kumamoto earthquakes struck, the people of Tainan, under my leadership, naturally and dutifully expressed their support. Even earlier, when central Taiwan was hit by a major earthquake in 1999, Japan was the first country to deploy a rescue team to the disaster area. On February 6, 2018, after a major earthquake in Hualien, former Prime Minister Abe appeared in a video holding up a message of encouragement he had written in calligraphy saying “Remain strong, Taiwan.” All of Taiwan was deeply moved. Over the years, Taiwan and Japan have supported each other when earthquakes struck, and have forged bonds that are family-like, not just neighborly. This is truly valuable. In the future, I hope Taiwan and Japan can be like brothers, and that the peoples of Taiwan and Japan can treat one another like family. If Taiwan has a problem, then Japan has a problem; if Japan has a problem, then Taiwan has a problem. By caring for and helping each other, we can face various challenges and difficulties, and pursue a brighter future. Q: President Lai, you just used the phrase “If Taiwan has a problem, then Japan has a problem.” In the event that China attempts to invade Taiwan by force, what kind of response measures would you hope the US military and Japan’s Self-Defense Forces take? President Lai: As I just mentioned, annexing Taiwan is only China’s first step. Its ultimate objective is to change the rules-based international order. That being the case, China’s threats are an international problem. So, I would very much hope to work together with the US, Japan, and others in the global democratic community to prevent China from starting a war – prevention, after all, is more important than cure.