US president-elect Donald Trump’s return to the White House is a test for governments on both sides of the Taiwan Strait.
Regarding political and economic issues, the focus of US-China relations would be trade, technology and military competition, which means tariffs, trade deficits and technology competition would be closely watched, as well as the interactions between Trump and Chinese President Xi Jinping (習近平).
As for Taiwan-US relations, the focus would be on trade and technology. Taiwan should seek to avoid having its exports face an increase in tariffs and work proactively with the US in the semiconductor industry and other important policy areas. However, it is almost certain that the Trump administration would demand that Taiwan reduce its trade surplus.
While the US would continue arms sales to Taiwan, it might reduce certain projects that are not directly related to military affairs.
The Democratic Progressive Party (DPP) government might show that it takes Trump’s “protection money” demand seriously by making a large and early new arms deals next year, showing that Taiwan is not looking to free ride and is determined to spend to defend itself, Rupert Hammond-Chambers, president of the US-Taiwan Business Council — an organization that helps broker defense exchanges between Taipei and Washington — was quoted by Reuters as saying after the US presidential elections.
Since former president Tsai Ing-wen (蔡英文) assumed office in 2016, the DPP government’s defense budget has increased from NT$320 billion to NT$470 billion (US$9.86 billion to US$14.49 billion), a surge of 47 percent in nine years.
That does not include a special budget to procure weaponry from the US, such as an extra defense spending of NT$240 billion over five years announced by the military in 2021.
However, the US would not take arms sales into account when considering bilateral trade. Trump also does not seem to think that way. It seems that for him, Taiwan has a huge trade surplus while also taking away the US’ semiconductor business.
The US’ Taiwan policy might be entering a consolidation period, which has two interlinked factors, but no clear result in sight.
First, it depends on Trump’s personal experience and will to execute the US’ Taiwan policy.
Second, it depends on whether Trump’s inner circle is friendly to Taiwan and how much influence they could wield over the decisionmakers.
Faced with a worsening cross-strait relationship, President William Lai’s (賴清德) national security team could foresee the possibility of its “one-sided” policy encountering the “Trump obstacle.”
Big spending would not change how Trump thinks about Taiwan. Even if Taiwan has a lot of money to spend, the Chinese Communist Party could use the same tactic.
Lai’s government should work on correcting Trump’s perception of Taiwan, and strengthening his understanding and support for our country.
Huang Kwei-bo is Secretary-General of the Association of Foreign Relations and a professor in the Department of Diplomacy at National Chengchi University.
Translated by Fion Khan
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