US senators on Friday last week introduced a bill aimed at supporting countries that maintain diplomatic ties with Taiwan amid mounting pressure from China. The US-Taiwan partnership in the Americas act seeks to “deepen coordination with Taiwan on diplomatic, development and economic engagement in the Western hemisphere.”
Taiwan has seven remaining diplomatic allies in Latin America and the Caribbean — Belize, Guatemala, Haiti, Paraguay, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines — all of which are facing growing pressure from China to “sever diplomatic relations with Taiwan by leveraging opaque development deals and backroom pressure,” the bill says. To counter that pressure, the act would require the US secretary of state to establish a mechanism to identify China-backed projects in those countries that pose strategic risks or involve nontransparent financing, and coordinate appropriate diplomatic or technical responses.
For the most part, Taiwan’s diplomatic allies have significant development needs. While many of the needs have been partially addressed by the International Cooperation and Development Fund (TaiwanICDF), the agency’s impact has been limited due to the dismantling of the US Agency for International Development (USAID). The TaiwanICDF maintains a strong presence through its technical missions on the ground, but lacks the capacity to implement large-scale projects across multiple countries simultaneously, which is why its USAID partnership is so vital.
“USAID provided the hardware, and we provided the software,” TaiwanICDF deputy secretary-general Hsieh Pei-fen (謝佩芬) once said. Both agencies emphasized knowledge transfer and socioeconomic development, but USAID had far greater financial capacity to deliver large-scale assistance and infrastructure projects.
China’s “dollar diplomacy” continues to be a powerful tool in flipping Taiwan’s allies. Beijing often pledges to fund major infrastructure projects under its Belt and Road Initiative, but in reality, these countries frequently find themselves saddled with unsustainable debt, losing effective control over the assets built under the program. Several countries that have switched diplomatic recognition from Taipei to Beijing — including Honduras, Nicaragua and El Salvador — are estimated to owe China hundreds of millions of dollars each. That trend is deeply concerning for the US, not only because of the economic implications, but also the potential military risks. If debtor countries are unable to repay loans, Beijing could demand access to key infrastructure, including ports, potentially allowing the Chinese military to gain a foothold alarmingly close to US shores.
Taiwanese leaders have consistently acknowledged that they cannot financially match China. With Washington scaling back international aid, the US also finds itself in a weakened position to directly compete with China. However, rather than attempting to match China’s spending, the US could prioritize soft-power initiatives that foster trust and resilience, such as the construction or renovation of schools and hospitals, or the deployment of smart technologies. Taiwan is already engaged in many such efforts, providing training programs and technology transfers in the region. Washington could encourage recognition of Taipei over Beijing through favorable tariff agreements and other economic incentives. It might also emulate Taiwan’s successful model of soft diplomacy by offering scholarships to Latin American students to study in the US, helping to build lasting educational and cultural ties.
It is imperative that the government continue to emphasize to its diplomatic allies that switching recognition to Beijing could lead them down a path of economic dependency and authoritarian influence — one that could ultimately undermine their long-term development and sovereignty.
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