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TAIPEI, Taiwan (AP) 鈥� The Taiwanese president said Tuesday that trade tensions between the United States and Taiwan are just 鈥渇rictions between friends鈥� in a show of optimism as tariff negotiations are underway with Washington.

U.S. President Donald Trump imposed 32% tariffs on all imports from Taiwan as part of sweeping duties levied against all U.S. trading partners last month.

The tariffs on Taiwanese goods were subsequently lowered to 10% for 90 days to allow for trade negotiations. Officials from both sides met in Taipei, the island’s capital, last month for a first round of in-person talks, to be followed by another one in the coming weeks.

In a speech marking his first year as president and focusing on Taiwan’s strategies to defuse the effects of U.S. tariffs and military threats from China, Lai Ching-te struck an accommodating tone despite the tariff pressure.

The U.S. and Taiwan have long 鈥渃ooperated and have also encouraged each other to grow,鈥� he said. 鈥淭here are bound to be frictions between friends, but they can eventually be reconciled.鈥�

鈥淓ven if there are differences of opinion, as long as there is a foundation of trust and sincere dialogue, they can understand each other better and deepen their friendship,鈥� he added.

The U.S. has traditionally been Taiwan鈥檚 strongest unofficial ally in the face of military threats by China, which considers the self-ruled island its own territory, to be retaken by force if necessary. Washington is bound by its own laws to provide Taipei with the means to defend itself.

Lai said Taiwan would continue to strengthen its national defense capabilities, both through foreign military procurement and domestic arms development, and stand 鈥渟houlder to shoulder鈥� with its allies 鈥渢o exert deterrent power.鈥�

鈥淲e will prepare adequately to avoid war and achieve the goal of peace,鈥� he said.

He kept open the possibility of talks with Beijing, saying that 鈥淭aiwan is very willing to engage in exchanges and cooperation with China鈥� as long as there is mutual respect and dignity.

Taiwan’s economy is supported by massive semiconductor firms that supply microchips globally as well as other electronics, advanced manufacturing and green tech makers.

Lai said he would continue to encourage foreign investment in Taiwan, citing Monday’s announcement by American technology company Nvidia about opening a new office in northern Taipei.

Nvidia鈥檚 Taiwan-born CEO Jensen Huang also announced his company would build an artificial intelligence supercomputer on the island in partnership with TSMC, tech firm Foxconn and the Taiwanese government.

He also backed increased investments by Taiwanese firms in the U.S.

In March, the island鈥檚 largest chipmaker, TSMC, responded to Trump鈥檚 tariff threats by pledging a new $100 billion investment in the U.S., in addition to earlier commitments to invest more than $65 billion in three factories in Arizona, one of which began production late last year.

However, Lai鈥檚 controversial proposal to completely remove tariffs on U.S. goods 鈥渙n the basis of reciprocity,鈥� in addition to bumping up procurement of U.S. products, triggered protests last week by Taiwanese farmers.

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Associated Press video journalist Johnson Lai in Taipei, Taiwan, contributed to this report.