By Ben Blanchard and David Lawder TAIPEI/WASHINGTON, Jan 28 (Reuters) – Senior Taiwanese and U.S. officials discussed cooperation in artificial intelligence, tech and drones at a high-level forum launched during the first Trump administration, with the U.S. State Department praising Taipei as a "vital partner." The U.S. is Taiwan's most important international backer and arms supplier in the face of increased pressure on the island from China, despite the absence of formal diplomatic ties. The U.S.-Taiwan Economic Prosperity Partnership Dialogue first took place in November 2020. The State Department said the sixth round of talks took place on Tuesday, led by Under Secretary for Economic Affairs Jacob Helberg and Taiwan Economy Minister Kung Ming-hsin, who is visiting the U.S. The two sides signed statements on cooperation on economic security and on the Pax Silica Declaration – a U.S.-led initiative aimed at securing AI and semiconductor supply chains amid intense competition from China, Washington's main strategic rival. "Taiwan is a vital partner on these and other important economic initiatives and its advanced manufacturing sector plays a key role in fuelling the AI revolution," the State Department said in a statement. The talks also included exchanges on supply chain security – including how it relates to AI – certification on drone components and cooperation on critical minerals, it said. "Discussions focused on highlighting progress in responding to economic coercion, pursuing mutual cooperation in third countries and addressing tax-related barriers to increase investment between the United States and Taiwan," it said. Taiwan, a major producer of advanced semiconductors that power AI, has long pushed for an agreement to avoid double taxation, saying it would boost bilateral investment. Taiwan's economy ministry said both sides agreed that peace and stability across the Taiwan Strait that separates the island from China are "crucial to global economic security and prosperity." They also discussed undersea cable security, low-Earth-orbit satellite cooperation and the training of high-tech talent. Kung told the Atlantic Council think tank on Wednesday that with U.S. expertise in AI chip design and Taiwan's dominance in chip foundries, cooperation between Washington, Taiwanese chipmaking giant TSMC and Taipei would deepen over the next five to 10 years. Taiwan and the U.S. reached a deal this month to cut tariffs on Taiwan's exports to the U.S. and boost Taiwanese investment in semiconductors and other sectors in the country. Taiwan companies have pledged to invest $250 billion to expand semiconductor, energy and AI production in the U.S., while Taipei will guarantee an additional $250 billion in credit to support further investment. Kung said that U.S. companies including Nvidia , Advanced Micro Devices and Micron Technology, were continuing to invest heavily in Taiwan – more than $15 billion – to build a "non-red" supply chain that does not rely on China. "The actual amount should be much higher than this. And they are also investing in semiconductor supply chains, cloud software services, etc. All of these areas are seeing increased investment in Taiwan," Kung said. Taiwan has accused China of involvement in damaging undersea telecom and internet cables, which Beijing denies. Taipei is expanding the use of low-Earth-orbit satellites to provide back-up communications should China sever the cables during a conflict. China, which claims Taiwan as its own, routinely objects to interactions between Taiwanese and U.S. officials. Taiwan's government rejects Beijing's sovereignty claims, saying only the island's people can decide their future. (Reporting by Ben Blanchard. Additional reporting by David Lawder and David Brunnstrom in Washington. Editing by Thomas Derpinghaus and Mark Potter)
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