The president has threatened a 100% tariff on semiconductor chips, a key industry for Taiwan.

Our Asia correspondent Stash Butler reports from Taipei.

Taiwan's president has just told reporters here at the presidential office that the island will boost investment in the US and improve communication.

That's as President Donald Trump threatens to put a 100% tariff on imported semiconductor chips.

President Lai Ching-te is aiming to reassure Taiwanese people and businesses.

He says the US and Taiwan are key partners and that's not going to change.

Coming years, though we may face different political challenges, Taiwan and Washington's mutual trust and close cooperation will remain stable.

Taiwan's people do not need to worry.

根據台灣關係法。

But the signals coming from Washington are less positive.

They took the business away, Taiwan took our chip business away.

We had Intel, we had these great companies that did so well and it was taken from us and we want that business back.

We want it back in the United States.

It's a delicate situation for this self-ruled island.

Taiwan counts on semiconductors as a critical part of its economy.

The island's home to chip giant TSMC, the 10th most valuable company in the world.

But Taiwan also counts on the US for military support as it faces the threat of an attack by China, which sees Taiwan as a wayward province.

That means Taipei has to balance its economic security with the need to keep its biggest defense partner on side.

So far, Washington has not confirmed plans to put tariffs on Taiwanese semiconductors, but if it does, Taipei faces some tricky decisions ahead.