Even before the 2024 presidential election, U.S. allies were confronted with the reality that they cannot take their relationship with the U.S. for granted – not even Taiwan, despite its status as a key democratic ally in the Indo-Pacific and the leading supplier of the world’s most advanced microchips. While China is President-elect Donald Trump’s primary international concern, doubts have emerged over the extent of his commitment to Taiwan’s economic and physical security if a conflict were to occur in the Taiwan Strait.
The U.S. should invest more in developing Taiwan’s resiliency against energy import and semiconductor supply chain vulnerabilities through structures and alliances that reduce its financial burden. While it is necessary for Taiwan to retain the traditional security guarantees offered by the U.S., the Taiwanese government must push for cooperation with other regional and international partners and act on its pledges to increase defense spending.
U.S./China/Taiwan under the first Trump administration
During his first term, Trump’s attitude toward China was characterized by the notion of having to rebalance perceived leniency by previous administrations. During the past couple of decades, the U.S. and its Western allies sought to increase engagement with China, hoping that conciliatory policies would convince it to ease its repressive domestic policies and become a more involved and equal international partner. The Trump administration conversely sought to rebalance the trade deficit with China that had been created in part through outsourcing manufacturing jobs.
The administration’s approach to the issue was gradual, initially focusing on calls for reviews of trade deficits and tighter tariff enforcement. U.S. and Chinese negotiators failed to agree on trade deficit reduction, and following a probe into Chinese intellectual property theft, the U.S. in January 2018 imposed tariffs on all imported washing machines and solar panels, followed in March by tariffs of 25% all steel and 10% on all aluminum imports. This reflected Trump’s protectionist policies overall without specifically targeting China.
However, after China levied a 25% tax in April 2018 on 128 U.S. products including airplanes and soybeans, Trump announced plans of 25% tariffs on $50 billion of Chinese imports, marking the start of the U.S.’s more targeted approach. The following year would see major trade escalation from both sides, including another 10% tariff on $200 billion of Chinese imports.
The first Trump administration also tried to project a stronger security stance against China. The 2017 White House National Security Strategy stated that China and Russia wanted to “shape a world antithetical to U.S. values and interests.” Washington cemented its intention to shift its security focus to China when then-Secretary of Defense Jim Mattis announced in May 2018 that the Department of Defense’s Pacific Command would be renamed Indo-Pacific Command, as well as the following year when the Pentagon’s 2019 Indo-Pacific Strategy Report called China a “revisionist power” and deemed interstate competition with China as the primary U.S. national security concern. Consequently, while initially using sparse military involvement in the South China Sea, freedom of navigation operations in the Taiwan Strait increased in quantity, culminating in nine such operations in 2019, up from three in 2015 under the Obama administration.
The U.S. government was also launching domestic initiatives to further curb China’s influence. The Department of Justice’s China Initiative mainly served to prosecute scientific researchers and academics with affiliation to China in an attempt to reduce instances of intellectual property theft. The program formally ended in 2022 after civil rights groups called attention to discriminatory and often baseless cases. The Trump administration further sharpened its focus against China’s tech industry in 2019 by restricting Huawei’s access to U.S.-supplied components without special approval and effectively barring its access to U.S. telecommunications networks. Finally, regarding China’s reported treatment of the Uyghurs in detention camps in Xinjiang, Trump signed the Uyghur Human Rights Policy Act in 2020. He refrained, however, from sanctioning Chinese officials tied to the detention camps in an attempt to keep doors open to a trade deal, frustrating other officials in his administration.
The U.S. and China reached a “Phase 1” deal in January 2020 that set guidelines to prevent the trade war from escalating further and offered a roadmap to rekindling trade relations. Subsequent analyses of the deal found that China fell far behind its commitments to increase U.S. purchases, and attempts at settling for a reconstruction of respectful relations were swept aside after Trump’s aggressive rhetoric against China following the outbreak of the COVID-19 pandemic.
Indo-Pacific Relations Under Biden
When President Joe Biden took office in 2021, he was eager to dispel notions that he would not be tough enough on China, both diplomatically and in trade. Coming out of the pandemic, which enshrined a high degree of anti-China sentiment especially from the Republican Party. Biden retained tariffs on Chinese imports, which later would expand. Trade tensions further escalated following the 2022 Russian invasion of Ukraine, which emphasized the vulnerabilities of global supply chains in both energy imports and emerging technologies. To that end, the Biden administration passed two major pieces of legislation: the Inflation Reduction Act and the CHIPS and Science Act, both aiming to increase U.S. industrial productivity, increase funding for renewable sources of energy, and minimize risks to the global semiconductor supply chain.
The CHIPS and Science Act increased U.S. competition with China, and Taiwan’s role in the semiconductor supply chain became a focal point. Given microchips’ importance in military applications, this meant that a major focus of the Biden administration’s policies was on limiting China’s access to technology that could be used in its military buildup.
As such, while the Biden administration increased its escalatory policies on the trade front, it could purport itself to be less discriminatory toward China by focusing mainly on the tech sector rather than all-encompassing trade restrictions, allowing it room to maneuver diplomatically. High-level talks with Beijing marginally improved in the second half of the Biden administration, notably with the 2023 Biden-Xi meeting in California that resulted in a commitment to improved military communication and cooperation in key sectors, including intervention in the fentanyl trade. On the other hand, escalation along the trade sector continued, with both countries exchanging restrictions and tariffs targeting electric vehicles, critical minerals, solar panels, dual-use technologies, and weapons manufacturers.
Taiwan also was a key piece of the Biden administration’s Indo-Pacific security strategy, both for its role in the semiconductor supply chain and for its strategic positioning within the “first island chain” spanning from Japan to the Philippines. China has performed almost daily “grey zone” activities around Taiwan, sending aircraft and vessels across the Taiwan Strait that often crossed the Taiwan Median Strait Line. Beijing routinely intensified its exercises in response to actions such as the 2022 visit by then-Speaker of the House Nancy Pelosi to Taiwan and the inauguration speech of Taiwanese President Lai Ching-te.
The U.S. continued arms sales and provided military aid to Taiwan under a revised Presidential Drawdown Authority mechanism. The Biden administration revised the traditional “hubs-and-spokes” model of Indo-Pacific security to coordinate a local network of alliances in the Indo-Pacific. The Quadrilateral Security Dialogue, or Quad, which had operated for the past decade as a dialogue and coordination mechanism on Indo-Pacific security among the U.S., Australia, Japan, and India, furthered its cooperation and even planned its first round of joint coast guard exercises for 2025. The advent of AUKUS, the trilateral partnership among the U.S., the United Kingdom, and Australia on supplying the latter with nuclear submarines, cemented a long-term vision for deterrence against China in the region. Japan and South Korea for the first time worked together with the U.S. in trilateral security exercises to increase interoperability in the event of a Taiwan contingency, and both countries have upgraded their command structures to include a more fluid functioning with the U.S. The past two years also saw an increased participation by extra-regional partners such as France, Italy, and Germany, in regional exercises and freedom of navigation operations.
The Second Trump Presidency
After Trump takes office, tensions between the U.S. and China likely will continue to escalate along hybrid lines. This includes non-military escalation such as trade restrictions or espionage campaigns. The Trump administration will likely retain the Biden administration’s tech restrictions on China and expand them to other sectors. Trump has vowed to impose a 60% flat tariff across Chinese imports, with additional 10% tariffs to reduce drug and immigration flows and added tariffs if China were to help develop an alternative currency as part of BRICS. These statements have already had a tangible effect on China’s economy, which recorded its highest output levels in October in anticipation of the election followed by a manufacturing slump in December possibly due to increased trade risks. Despite his rhetoric, Trump’s sensitivity to the market may mean a less-tough approach in practice given tariffs’ potential to raise domestic consumer prices. Initial investigations and lower tariffs may be the starting point to Trump’s Chinese trade policies and could set the scene for a prolonged trade war and eventual negotiation process between both countries, which is likely to see in parallel a continuation of extensive Chinese government-backed cyberoperations in the United States.
Some Taiwanese officials have expressed worries about whether a second Trump administration would be as willing to provide military aid to Taiwan. Trump himself opposed the passing of the military aid package to Ukraine, Israel, and Taiwan that was held up in Congress earlier in 2024, and he has publicly expressed his frustration with Taiwan, claiming it took “100% of our chip business” and that it should pay for its defense. In the short term, he will likely push for Taiwan to increase its defense expenditure from the current 2.5% of GDP to 10%. Over the medium to long term, military aid to Taiwan may be reduced in frequency in favor of increased arms sales. Taiwan has already responded to this, with Lai pledging increased defense spending during his New Year’s address, and the country earmarking a $2.2 billion arms purchase from the U.S. in 2025.
Taiwan’s Indo-Pacific allies may face similar policy approaches from Trump. His pick for undersecretary of defense for policy, Elbridge Colby, recently expressed doubt as to whether the U.S. should be as resolute in its commitment to South Korea’s defense against a potential attack from North Korea. Coupled with market uncertainty and domestic political upheaval, Seoul may try to rebuild trade and diplomatic ties with Beijing. Similar signals have emerged from Tokyo, though large-scale economic and security grievances are likely to remain in both cases and are unlikely to result in a significant detente with China in the short-term.
While concerns are likely to remain, shipments of some previously concluded arms sales have yet to arrive in Taiwan, and it is likely the current administration will attempt to speed the delivery process before Biden leaves office. The U.S. National Defense Authorization Act (NDAA) for Fiscal Year 2025 has allocated a further $300 million to help Taiwan acquire capabilities including radar systems and increase diplomatic and economic backing under a new “Taiwan Security Cooperation Initiative.” If tensions between the U.S. and China continue to rise in 2025, it is likely that the following year’s NDAA will increase measures aimed at countering China, though the direct aid to Taiwan may be reduced.
Recommendations
- The Trump administration should signal continued commitment to Taiwan under the Taiwan Relations Act and accelerate the delivery of previously confirmed weapons purchases to Taiwan. The backlog in weapons deliveries currently amounts to $20.5 billion for weapons systems purchased between 2015 and 2019. Improving the Department of Defense’s sale-to-delivery process to accelerate the current backlog as well as future arms sales would signal commitment to Taiwan’s defense with relatively little added cost to the administration. To that end, maintaining military-to-military communication between the U.S. and China will be crucial to avoid misunderstandings.
- The Trump White House also should prioritize upkeep of regional alliances that were set up or improved during the Biden administration: AUKUS and the Quad spread the cost of deterrence in the Indo-Pacific among the U.S.’s allies. Joint arms production with Taiwan and regional allies would ease pressure on the U.S. arms industry and signal stronger deterrence. Pushing for increased participation of Taiwan’s European allies would establish a greater link between the European and Pacific theaters and again offset the burden that would otherwise more heavily weigh on the United States.
- Given the importance of Taiwan in the global semiconductor industry, the Trump administration should prioritize enhancing the security and stability of its semiconductor supply chain, including access to energy supplies and critical minerals, while working with both allied and nonaligned states in doing so.
- Taiwan’s Lai administration should continue to develop strong relations with Indo-Pacific partners. While the uncertainty of a Trump administration may result in signaling from South Korea and Japan to move closer to China in certain sectors, neither wants a unilateral change in the status quo along the Taiwan Strait, and both would be affected by a conflict. Pushing to observe joint exercises between the U.S. and Indo-Pacific partners, such as the newly announced coast guard exercises by the Quad, could be an additional gesture of initiative to the Trump administration and be a first stepping-stone in increasing defense partnerships with Japan and other local allies.
- Taiwan also should promote its de-risking strategies through domestic energy diversification, the New Southbound Policy, increased people-to-people exchanges, and semiconductor industry partnerships. Exploring alternative sources of energy to replace fossil fuel imports, such as small modular nuclear reactors, could offer an innovative solution to Taiwan’s energy security challenges. Working with partners to further boost semiconductor supply chains could stabilize the industry and act against the Trump administration’s protectionist ambitions. Many Indo-Pacific countries have expressed distrustful views of both the U.S. and China, and Taiwan has an opportunity to push for increased track 1.5 and track 2 diplomacy to present itself as a separate partner. This would not only de-risk Taiwan’s own economy but also further align interests with regional partners that would add a layer of deterrence against Chinese coercive policies. Increased cooperation with European partners would be an additional win for both parties’ industrial interests and capabilities.
The views expressed in this article are those of the author and not an official policy or position of the New Lines Institute.