TAIPEI (Reuters) - Semiconductor business between Taiwan and the United States is a "win-win" model for both sides given the high level of complementarity, the island's economy ministry said on Tuesday responding to tariff threats from U.S. President Donald Trump.

Home to the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co. ( TSM ) , the island is a key link in the global technology supply chain for companies such as Apple and Nvidia.

Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the United States.

"Taiwan and the U.S. semiconductor and other technology industries are highly complementary to each other, especially the U.S.-designed, Taiwan-foundry model, which creates a win-win business model for Taiwan and U.S. industries," Taiwan's economy ministry said in a statement in response.

The ministry "will continue to pay attention to U.S. policy going forward, and there will be close contact and cooperate between the two sides to ensure that Taiwan's and U.S.' industries and national interests can develop in a mutually beneficial way in the face of global challenges".

In 2020, under the first Trump administration, TSMC announced that it would build a $12 billion factory in Arizona in a win for efforts by the U.S. government to wrestle global tech supply chains back from China. It later boosted those plans with the total investment now standing at $65 billion.

TSMC declined to comment on Trump's tariff remarks.

Earlier this month, Taiwan Economy Minister Kuo Jyh-huei said he only expected a small impact from any tariffs imposed by Trump on semiconductor exports given their technological superiority.

In another potential challenge for Taiwan, Trump last week directed federal agencies to investigate persistent U.S. trade deficits and unfair trade practices and alleged currency manipulation by other countries.

Taiwan's trade surplus with the United States surged 83% last year, compared with 2023, with exports to the U.S. hitting a record high of $111.4 billion, driven by demand for high-tech products such as semiconductors.