Taipei, Taiwan – For engineers working in Taiwan’s semiconductor industry, the past few years have been difficult.

The United States’s efforts to curb the growing power of China, Taiwan’s neighbour, by cutting off its access to the most cutting-edge chips has put the island’s chip sector in the crosshairs of the world’s most consequential geopolitical rivalry.

For Taiwan, the US-China competition for dominance is a double-edged sword.

On one hand, US efforts to restrain China’s growing power and influence serve as a counter to the risk of a possible future Chinese invasion of the self-governing island, which Beijing considers its territory.

On the other, they have made doing business more complicated for semiconductor and equipment makers in Taiwan, which sell a large portion of such “critical technology” to China.

Despite its small size, Taiwan produces nearly 60 percent of the world’s supply of semiconductor chips and nearly 90 percent of the most advanced chips needed to power everything from smartphones to artificial intelligence.

Since US President Joe Biden’s signing of the Chips and Science Act in 2022, which incentivises chip production in the US while restricting tech transfers to China, Taiwan’s semiconductor sector has had to adapt to a changing regulatory environment.

Many companies have shifted their business focus away from China, diversifying production to the US and Southeast Asia.

For some rank-and-file members of the industry, there has been a feeling of whiplash.

“There’s a clear direction. [The US] would like to compete with and restrict Chinese development. However, the policy is never consistent, it’s dynamic,” a Taiwanese engineer at a European multinational chipmaker told Al Jazeera.

“We have a hard time trying to figure out what is our policy [towards] our Chinese business under these circumstances because the rules change rapidly. Today it’s like this, tomorrow it’s like that,” the engineer said, asking not to be named for professional reasons.

After the shakeups of the past two years, more upheaval could be in store as the US holds its presidential election on November 5.

Whether Vice President Kamala Harris or former President Donald Trump is elected, analysts widely anticipate new restrictions on Chinese tech, with knock-on effects for Taiwan’s chip industry.

“The theme is that Trump and Harris are turning the screws on China and Taiwanese firms are going to have to adapt. There will be some that benefit and some that will be hurt, but they will all have to adapt,” Chris Miller, the author of Chip War: The Fight for the World’s Most Critical Technology, told Al Jazeera.

While Harris and Trump have major differences on domestic issues, anti-China sentiment has increasingly reflected the consensus among both Democrats and Republicans.

During his term as president, Trump launched a trade war with Beijing, imposing tariffs on about $380bn worth of Chinese goods, according to an analysis by the Tax Foundation.

US President Joe Biden, a Democrat, kept those tariffs after winning the 2020 election and earlier this year added tariffs worth a further $18bn on imports including steel, semiconductors and electric vehicles following a lengthy investigation by the US Trade Representative.

With trade protectionism back in vogue in Washington, DC, there have been hints at the probable trajectory of China policy under either a Trump or Harris presidency, said Chim Lee, a senior analyst at the Economist Intelligence Unit.

“The overall trajectory under both presidencies is not too bad, but the kind of impact it would have would be a bit more volatile under Trump. Regardless of who wins the election in November, reindustrialisation and improving the US manufacturing sector are the priority. They are both looking at protectionist measures,” Lee told Al Jazeera.

The main difference, Lee added, is Harris would be more “consultative” while Trump would be more “unstable”.

In Taiwan, polling has suggested a public preference for a Harris win, as well as a considerable amount of ambivalence.

In a survey conducted by Taiwanese broadcaster TVBS in July and August, 46 percent of respondents expressed a preference for a Harris victory, compared with 15 percent who supported Trump. Notably, 39 percent said they were undecided.

On the campaign trail, Trump has accused Taiwan of “stealing” the chip industry from the US decades ago.

Trump has also called for a 60 percent tariff on all Chinese goods, a move that would pass on costs to numerous Taiwanese suppliers that do business with China.

In an interview with The Wall Street Journal published on Saturday, the Republican said that he wouldn’t have to use military force to break a blockade against Taiwan because Chinese President Xi Jinping “respects me and he knows I’m f— crazy”.

He also said he would impose even higher tariffs of 150-200 percent on Chinese goods if Beijing ever invaded.

Harris has been more muted in her comments about Taiwan-China relations.

In an interview with CBS’s 60 Minutes in October, the Democrat said she could not discuss “hypotheticals” when asked whether the US would defend Taiwan in the event of a Chinese invasion.

She added, however, that she would ensure “Taiwan’s ability to defend itself,” echoing the language of the 1979 Taiwan Relations Act, which commits Washington to “make available to Taiwan such defence articles and defence services in such quantity as may be necessary”.

In her trade policy, Harris is expected to be more targeted in her approach to Chinese tariffs, following the tone set by Biden, whose administration has prioritised “re-shoring” chip production to the US and keeping the most advanced semiconductors out of Chinese hands.

For Taiwan, the CHIPS Act has been a mixed bag – providing a boost to some of Taiwan’s nearly 300 semiconductor-related companies, while creating difficulties for others, depending on their position on the industry ladder.

“Taiwan was hugely impacted by the export control measures from the US,” Kristy Tsun-Tzu Hsu, the director of the Taiwan ASEAN Studies Center at Taipei’s Chung-Hua Institution for Economic Research, told Al Jazeera, explaining that Taiwanese firms were previously major suppliers for Chinese giants such as Huawei.

Companies like leading chipmaker TSMC have adjusted their business model in line with US requirements.

In 2020, the company halted all new orders from Huawei, then its second-largest client, following the announcement of new export controls.

Since then, TSMC has gravitated towards its US business, which is now three times the size of its Chinese equivalent, Hsu said, as a result of demand from tech giants such as Apple and Nvidia.

Through the CHIPS Act, the company is due to receive $6.6bn in direct funding and $5bn in loans to help it build three facilities in Arizona to “diversify” its supply chain, while also spending $65bn of its own money on the project.

TSMC obtained a US waiver to keep manufacturing its 12, 16, 22 and 28-nanometre chips at its plant in the Chinese city of Nanjing, although its most advanced chip manufacturing remains outside of China.

Its most cutting-edge offering yet, the 2nm chip, will be made in Taiwan.

Other companies have found themselves grappling with knock-on effects in the unrestricted “legacy chip” market, the term for less advanced but ubiquitous chips found in everything from smart refrigerators to electronic vehicles.

Cut off from their supply of advanced chips and machinery, Chinese tech companies went on a spending spree for machines to manufacture legacy chips.

As Chinese manufacturing capacity increased, Taiwan’s smaller chip companies suddenly found themselves in a market teetering on the brink of overcapacity.

Many Taiwanese companies fear Chinese competitors will flood the market completely in three to five years, Hsu said.

There are also concerns about Washington’s next moves further down the chip-making equipment supply chain.

Following US pressure, the Dutch government earlier this year announced export restrictions on advanced semiconductor manufacturing equipment of the kind produced by Veldhoven-based ASML, the sole supplier of the most advanced chip-making machines.

In September, Morgan Stanley downgraded its earnings estimates for ASML amid concerns about waning demand from Chinese chipmakers, which had driven a surge in orders for legacy chip-making machines.

A Taiwanese engineer with ASML said he was worried about Harris implementing policies similar to those pushed by Biden, while Trump was his own source of concern due to his mercurial reputation.

“I think most of the engineers will want Harris to win the election, because … Trump is not really friendly towards Taiwan.  For example, I still remember he claimed that Taiwan stole the chip business from America,” the engineer told Al Jazeera, speaking on condition of anonymity.

“Harris has a stronger relationship with Silicon Valley. I think it will be more beneficial for the high-tech industry in Taiwan.”

Trump’s proposed 60 percent blanket tariff on Chinese goods, in particular, poses risks to Taiwan’s trade.

An analysis released by UBS in July calculated that the tariffs would more than halve China’s gross domestic product growth by 2.5 percentage points over the subsequent 12 months.

Such a slowdown would have knock-on effects on Taiwan’s economy, even as Taiwanese companies are steadily moving many of their operations out of China in the face of rising costs and geopolitical tensions.

Trump’s recurring complaints about trade deficits with other countries have also raised concerns he could impose trade restrictions on Taiwanese goods to address the US’s $47bn trade deficit with the island.

With so much uncertainty, the best Taiwan can do for now is to brace for change, said Yachi Chiang, a professor in tech law at National Taiwan Ocean University.

“The biggest worry for [Taiwan] now is that maybe we cannot count on our first term experience with Trump because he’s really unpredictable,” Chiang told Al Jazeera.

“In the case of a Harris win, and even if she follows most of Biden’s policies, she will still have her own opinions. In her case, Taiwan has to be ready for the changes.”