What is the current status of U.S.-Taiwan relations? | Explained

President Donald Trump shakes hands with C.C. Wei, chairman and CEO of Taiwan Semiconductor Manufacturing Company, in the Roosevelt Room of the White House in Washington, on March 3.
| Photo Credit: AP

The recent February 16 update of the U.S. State Department factsheet on Taiwan calls for a revisit of U.S.-Taiwan relations. The factsheet now does not assert that “we do not support Taiwan independence” and states that the U.S. will support “Taiwan’s membership in international organisations where applicable”. The deletion was termed a routine update by Washington and was welcomed by Taiwan. However, it did receive strong opposition from Beijing. As per China’s Foreign Ministry, “The US State Department’s revision of the list of facts regarding US-Taiwan relations represents a serious regression in its stance on Taiwan…(and) sends a seriously erroneous message to the separatist forces advocating for Taiwan independence”. The driver of U.S. Taiwan policy is the Taiwan Relations Act (TRA), 1979, which, “Declares it to be the policy of the United States to preserve and promote extensive, close, and friendly commercial, cultural, and other relations between the people of the United States and the people on Taiwan….and to provide Taiwan with arms of a defensive character”. This policy underscores the regular arms sales from the U.S. to Taiwan which has received ire from Beijing.

Trump on Taiwan

U.S. President Donald Trump has proven himself to be unpredictable, and talks of tariffs have made U.S.-China relations challenging. However, U.S.-Taiwan relations are also getting complicated.

Mr. Trump during his campaign had hinted that he believes that Taiwan has stolen the chip industry from the U.S. He has also asserted that he is keen that Taiwan should pay the U.S. for protection, and that Taiwan should increase its defence budget. Taiwan today is in the process of negotiating a U.S. arms deal of 7-10 billion dollars. It has also increased its defence budget to 2.5% of its GDP. Taiwanese President Lai Ching-te has announced that he will be communicating more with Mr. Trump and will also be looking for increasing investments in the U.S. The Taiwan Semiconductor Manufacturing Company (TSMC) has announced that it is planning to invest around $100 billion in developing manufacturing in the U.S., raising its investments to around $165 billion. Mr. Trump has also made statements to the effect of hinting at Taiwan being too far away for the U.S. to be of any help should Beijing adopt a military route. However, the fact remains that Mr. Trump’s last administration had approved arms deal worth $10 billion and sold arms worth $18 billion to Taiwan. He also signed laws which improved U.S.-Taiwan relations such as the Taipei Act, Taiwan Travel Act and Taiwan Assurance Act.

Taiwan’s vulnerable position

There has been a consistent rise in Chinese aggression in the form of military exercises across the Taiwan strait. Chinese President Xi Jinping has also been building a global narrative in the hope to further isolate Taiwan. Beijing has had a tough relationship with the pro-independence Democratic Progressive Party’s (DPP) government since 2016. During the last three terms of the DPP, Taiwan lost diplomatic allies to Beijing. Today only 12 countries have diplomatic relations with Taipei. The 2024 elections happened under excessive military exercises by China across the Taiwan Strait. Along with regular military drills, Beijing has also resorted to using spy balloons and cyber-attacks. These tactics have been an attempt to keep the threat of military invasion real.

A conflictual relationship between the U.S. and China can raise existential challenges for Taiwan. For Mr. Xi, it is about national rejuvenation, while for Washington, Taiwan matters as a chip hub and as a market for U.S. weapons.

The writer is Associate Professor, OP Jindal Global University.