Taiwan is preparing for a potentially tougher relationship with Washington under Trump

During his initial term as President of the United States, Donald Trump was perceived as a supporter of Taiwan, enhancing the island’s security through increased arms sales and elevated diplomatic interactions.

However, this favorable perception diminished during his campaign, as Trump consistently asserted that the self-governing democracy should contribute more to the U.S. for its “protection” and accused it of having “stolen” American chip industry jobs.

Consequently, Taiwan is preparing for a potentially more tumultuous relationship with Washington, its key security ally, following Trump’s significant political resurgence.

“I believe many are feeling apprehensive,” stated Professor Chen Ming-chi, a former senior advisor to Taiwan’s National Security Council, in an interview with CNN. “Due to Trump’s unpredictability, it remains uncertain whether Taiwan will experience greater safety or increased peril during his second term.”

Observers agree that Taiwan will need to invest more in its defense and enhance its engagement with the Trump administration to secure American backing.

The ruling Communist Party of China considers Taiwan a part of its territory, despite never having governed it, and has pledged to reclaim the island by force if necessary. According to the Taiwan Relations Act, the U.S. is legally obligated to provide Taiwan with the means for self-defense and supplies it with defensive military equipment.

The Taiwanese government has conveyed its assurance regarding bilateral relations, highlighting the enduring bipartisan support for the island. Three senior security officials from Taiwan informed CNN that there are established communication channels for discussing significant issues, regardless of changes in leadership, with military communication avenues in particular having “flourished.”

Following the November election, Taiwan’s President Lai Ching-te emphasized the significance of Taiwan’s partnership with the United States, expressing Taipei’s readiness to be “the most reliable partner.”

Analysts indicate that Taiwan will be closely monitoring Trump’s foreign policy and defense appointments, his stance on Russia’s invasion of Ukraine, and his expectations from allies for insights into the future of their relationship.

The importance of this relationship has intensified as Beijing escalates its military pressure on Taiwan, frequently deploying fighter jets and warships near the island and conducting extensive drills in response to what it deems “separatist acts.”

This week, Taiwan’s Defense Ministry reported that China has executed its largest regional maritime deployment in decades, preparing for anticipated military exercises after Lai provoked Beijing’s anger with unofficial visits to Hawaii and the US territory of Guam.

Beijing has not confirmed any military exercises or acknowledged the significant troop movements reported by Taipei. According to US officials, while China’s naval deployments in the region are heightened, they align with previous large-scale military activities.

Under scrutiny

One clear distinction is that Trump is a less outspoken advocate for Taiwan compared to Joe Biden. The former president has consistently indicated that the US would be prepared to intervene militarily if China were to attack the island, although the White House has often retracted his statements.

The US has traditionally adhered to a policy of “strategic ambiguity” regarding its response to a potential invasion of Taiwan. However, Trump has taken this ambiguity further.

When asked by the Wall Street Journal whether he would employ military force against a Chinese blockade of Taiwan, Trump suggested that such a scenario would not arise because Xi respects him and perceives him as “crazy.” Instead, he proposed imposing tariffs of 150% to 200% on China.

In an October appearance on “The Joe Rogan Experience” podcast, Trump criticized Taiwan, stating that it does not “pay us money for the protection, you know? The mob makes you pay money, right?”

Taiwan’s mutual defense agreement with the US was terminated in 1979, coinciding with the end of official diplomatic relations. Unlike South Korea and Japan, Taiwan does not financially support the presence of American military forces on its soil. Nevertheless, the US remains the island’s primary arms supplier.

Ivan Kanapathy, a former deputy senior director for Asia on the White House National Security Council who served under both Trump and Biden, informed CNN that Trump’s comments suggest Taipei should “significantly increase its investment in US weapons and training, similar to what occurred during the first Trump administration.”

Kanapathy stated, “The national security interests of the US and Taiwan are closely aligned. However, the United States cannot desire to assist Taiwan more than Taiwan is willing to assist itself. That is the fundamental issue.”

Taiwan has a history of acquiring military equipment and weaponry from the United States. Currently, there is an outstanding order of over $20 billion in military supplies that Taiwan is still waiting to receive. Additionally, Taiwan has been progressively increasing its defense budget over the years.

This year, the Taiwanese government has proposed a record military budget that represents about 2.5% of the island’s overall economic output, which is significantly lower than the 10% target suggested by Trump for Taiwan’s defense spending.

However, a substantial rise in defense expenditure could pose political challenges for President Lai, as his party lacks a majority in the legislature. Achieving a 10% defense budget would position Taiwan among the highest military spenders globally, spending three times more than the US does as a percentage of its economy.

Trump secured re-election earlier this month and has unveiled a proposed cabinet featuring several individuals known for their hardline stance on China.

Taiwan stealing the United States’ chip industry?

Trump has consistently accused Taiwan of “stealing” the United States’ chip industry and has hinted at the possibility of imposing tariffs on Taiwan’s essential chip exports, which are vital for a range of modern technologies, including smartphones and artificial intelligence.

Although experts have largely dismissed Trump’s assertions, arguing that Taiwan has developed its semiconductor sector through strategic planning, diligent effort, and investment, his comments have raised concerns that Taiwan may need to accelerate the relocation of its critical chip supply chain to the United States.

Such a shift could jeopardize the island’s economic stability and undermine the so-called “silicon shield” that is believed to offer some protection against potential aggression from Beijing.

Kristy Hsu, director of the Taiwan ASEAN Studies Center at the Chung-hua Institution for Economic Research, stated to CNN that while tariffs on Taiwan’s chip exports might not have a significant immediate effect, potential policy changes could severely impact the industry.

“If Trump takes action against the chip supply chain, such as implementing stricter export controls, it could significantly affect Taiwan,” she noted, referring to limitations on the countries or companies to which Taiwanese chip manufacturers can sell their products.

Earlier this month, Reuters reported that the United States has instructed Taiwan Semiconductor Manufacturing Company (TSMC) to cease shipments of advanced chips to Chinese clients. TSMC is responsible for producing 90% of the world’s leading-edge chips.

This directive followed the discovery of TSMC-manufactured chips in devices produced by Huawei, a Chinese telecommunications company that has been under U.S. sanctions since 2019. Although TSMC stated it has not provided chips to Huawei since September 2020, it continues to serve other Chinese customers, raising concerns that Huawei might still gain access to these chips through alternative Chinese companies.

In its statement, TSMC refrained from commenting on “market rumors” and emphasized its commitment to adhering to all relevant rules and regulations, including export controls. The Commerce Department did not provide any comments to CNN regarding the matter.

Analysts suggest that enhancing outreach and educational initiatives will be crucial for Taiwanese semiconductor firms to manage risks as Trump embarks on his second term.

A former senior official from the Commerce Department, who served during the first Trump administration, remarked to CNN, “For Taiwan’s semiconductor sector, they face significant challenges. They must introspect and recognize the need to better communicate to Americans why they are a reliable partner, the superiority of their technology over China’s, and why they can be trusted.”