Donald Trump’s return to the White House has ushered in a new chapter of uncertainty and opportunity for U.S.-Taiwan relations. How will Trump’s unpredictable leadership impact the region? Could Beijing’s gray-zone tactics push tensions too far? And will a high-profile U.S. visit to Taiwan ignite a crisis? On December 12, Wikistrat CEO Oren Kesler hosted a webinar featuring Taiwan expert Eric Chan to explore these questions and the implications of Trump’s return to power
Eric Chan is a senior non-resident fellow at the Global Taiwan Institute (GTI).
Key Insights:
1. Strengthening U.S.-Taiwan RelationsEric Chan highlighted the unprecedented strength of U.S.-Taiwan relations, largely driven by policies initiated during Trump’s first administration: "U.S.-Taiwan relations are probably the best they have been since the end of the Mutual Defense Treaty in 1980." Regularized arms sales, expanded economic ties, and bipartisan support have cemented Taiwan’s strategic importance in U.S. policy.
2. China’s Economic Weakness and Gray-Zone TacticsChina’s economic challenges and reliance on gray-zone tactics remain central to its Taiwan strategy: "China is less likely to directly challenge the U.S. but will continue escalating gray-zone coercion against its neighbors, particularly Taiwan." These measures have backfired, fostering stronger U.S.-Taiwan defense collaboration, such as the presence of U.S. military trainers on Taiwan.
3. High-Risk, High-Payoff Dynamics under TrumpTaiwan views Trump’s second administration as a mix of opportunity and uncertainty: Potential gains include deeper military and economic cooperation, such as potential F-35 sales and expanded semiconductor collaboration. "The development of Taiwan's semiconductor sector—growing 30-40% year on year—has only reinforced its strategic importance to the United States."Risks stem from Trump’s unpredictability, with Chan noting, "Taiwan has also heard comments from Trump suggesting it is too close to China to be defensible, which raises concerns." Taiwan will intensify lobbying efforts to secure high-payoff opportunities while mitigating risks from Beijing.
4. Long-Term CompetitionChan stressed the long-term nature of U.S.-China-Taiwan competition, noting that neither Taiwan nor China is fully prepared for outright conflict. Taiwan continues to strengthen its defense capabilities and expand international ties while navigating economic diversification.
China, despite facing internal challenges, remains focused on unification with Taiwan as a core strategic goal. "Xi has made it clear he intends to take material steps toward unification, even if it means accepting greater risks in the short term."
5. Future Scenarios and Strategic TakeawaysEric Chan outlined four potential scenarios for U.S.-Taiwan-China relations under Trump’s leadership, each with distinct risks and opportunities:
Best-Case Scenario: Controlled CompetitionIn this scenario, all parties manage tensions carefully, prioritizing stability over escalation. The U.S. deepens support for Taiwan while avoiding provocations that might trigger major responses from Beijing. "The economic issues in China might lead Xi to scale back coercion temporarily, creating a window of stability," Chan suggested.
Worst-Case Scenario: Escalation from a MiscalculationA single event, such as a gray-zone incident, military clash, or contentious arms sale, spirals into a crisis that neither side can control. "The worst-case scenario would involve a flashpoint—something unintentional but catastrophic—that triggers a broader confrontation."
Gray Rhino Scenario: Persistent Gray-Zone TacticsThe most likely scenario involves a continuation of China’s gray-zone tactics against Taiwan, paired with escalating U.S.-China economic tensions. "China will keep testing Taiwan and the U.S. with gray-zone actions while avoiding outright war," Chan explained.
Black Swan Scenario: High-Profile Visit to TaiwanA low-probability but high-impact event, such as a senior U.S. official or Trump himself visiting Taiwan, could significantly escalate tensions. "A Trump visit to Taiwan would mark a seismic escalation," Chan noted, while highlighting the possibility of other game-changing events like another global pandemic.
Conclusion
Eric Chan concluded that Trump’s second administration represents a pivotal moment for U.S.-Taiwan relations. While the risks of escalation are real, Taiwan also has significant opportunities to deepen ties with the U.S. and expand its global presence. "Taiwan sees Trump’s return as a high-stakes gamble—one that could yield transformative gains or unforeseen challenges, depending on how the cards fall." As the dynamics of U.S.-China-Taiwan relations continue to evolve, Taiwan’s strategic decisions will be crucial in shaping its path forward amidst heightened global competition.
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