Island of Strength: Why Taiwan Matters to the U.S. More Than Ever

Jared Rodnick

The History of Taiwan

Few diplomatic relationships are as complex and vitally important as the one between Taiwan and the United States. Situated between the East and South China Sea and within the northwestern Pacific Ocean, Taiwan sits just ~100 miles from the Chinese coastland.

The origins of Taiwan as we know it today date back to the late 1940s when Kuomintang (KMT) nationalists fled China and Mao Zedong’s communist forces after suffering defeat during the Chinese Civil War. After establishing its government centered in Taipei and cutting ties with the Chinese Communist Party (CCP), Taiwan began to seek international recognition. Over the next 30 years, tensions continued to run high between Taiwan and China, especially due to China refusing to recognize the island as a sovereign nation. Then, in 1979, the U.S. established diplomatic relations with China and committed to the defense of Taiwan via the Taiwan Relations Act (1979). 

Following this policy, lines of communication opened up between Taipei and Beijing, with direct talks occurring in Singapore in 1993. However, this peace did not last as Taiwanese President Lee Teng-hui visited the U.S. just two years later. This move angered Beijing, causing them to institute missile testing along Chinese coastal waters, the adoption of an anti-succession law, and–for the first time–a loss of power by the KMT. With the restoration of power to the KMT and their candidate Ma Ying-jeou, who was elected on a Beijing-friendly platform, relations seemed to be improving, particularly with the passage of the Economic Cooperation Framework Agreement. Opening free trade that aims to reduce tariffs and commercial barriers between the two sides was taken as a sign of a more peaceful relationship to come. With the victory of the traditionally pro-independence Democratic Progressive Party in Taiwan's 2016 election, tensions heightened more than ever. Under President Tsai Ing-wen’s government, Taiwan began accepting arms deals with the U.S., engaging in direct conversation with President Donald J. Trump, and receiving a visit from the U.S. House Speaker Nancy Pelosi. More recently, China has continued military drills and exercises near Taiwan, while Taiwan has enhanced its defense strategies and international alliances. Taiwan continues to seek international recognition as a sovereign nation. 

How Critical is Taiwan to Global Security and Trade?

In a region dominated by the authoritarian CCP, Taiwan serves as an example of a flourishing democratic society, despite the influence China has attempted to exert over the island. Taiwan sits at a critical geopolitical crossroads in the First Island Chain, a network of U.S. allies, such as Japan, and territories, that help counter China’s military expansion. Additionally, the U.S. has numerous air and naval bases in Korea, the Philippines, and Japan, as deterrents against further Chinese and even Russian expansion, particularly in the Bering Sea. Should the U.S. fail to defend or support Taiwan in a crisis, a major blow could be dealt to America’s credibility among allies like Japan, South Korea, and the Philippines. Since Taiwan serves as a test case for U.S. resolve in countering Chinese aggression if Taiwan falls, it could embolden Beijing to extend its territorial claims. 

Economically, Taiwan remains the world’s leading producer of complex computer chips and semiconductors at 90 percent and 60 percent of global production, respectively. This production stimulates radar development, navigational systems, Intelligence, Surveillance, and Reconnaissance (ISR), and, most importantly, nuclear deterrence. These digital monolithic integrated circuits, or chips, compromise 25 percent of Taiwan’s net GDP and ~41 percent of net exports. However, due to ongoing threats by Chinese naval and military exercises, the leading manufacturer of such chips, the Taiwan Semiconductor Manufacturing Company has begun to move production to the U.S. Regardless of this change in production, Taiwan will remain a global leader in chip production, a vital process which fuels technology across the civilian, industrial, and defense sectors. The vital island—no larger than 35,808 square kilometers—is of critical strategic and economic importance to the U.S., Korea, Japan, and numerous other Pacific powers, as well as states across the world. 

What Does Taiwan’s Future Hold in Store?

As Taiwan moves forward, its future will be shaped by key factors, including U.S.-China tensions, economic shifts, military preparedness, and diplomatic strategy. With President Trump’s return to the Oval Office, Taiwan faces both opportunities and challenges in maintaining its sovereignty, economic strength, and global partnerships. The current administration will likely continue to pursue arms sales, high-level diplomatic engagements, and expanded trade ties with the island, perhaps escalating the relations between the U.S. and Taiwan. However, the America First diplomacy, which emphasizes domestic issues over global ones, that has become a platform for the President will no doubt affect this relationship. This policy emphasizes the security and well-being of the American people over others; however, it does not indicate a return to isolationism. For Taiwan to remain a high priority for the White House, it must continue to hold a vital place in U.S. strategic interests, primarily through military and naval bases or the manufacturing and raw materials found on the island. 

Due to the unpredictable nature of the Trump administration–and the recent actions taken regarding foreign aid for Ukraine–Taiwan must also develop self-sufficiency in defense and trade, decreasing its reliance on the U.S. With continued military pressure, frequent incursions into Taiwan’s air defense zone, and military drills, China has been increasingly aggressive, seemingly testing how long their leash is. In terms of defense, Taiwan has been spending merely 2.2 percent of its GDP to strengthen its capabilities via advanced weapons systems and defense installations. Taiwan's total military personnel currently numbers 2.58 million, but with just 761 aircraft, 97 naval assets (including submarines, patrol boats, and minesweepers), and 888 tanks along with just over 2,000 artillery units, it leaves one to wonder if they could defend themselves against China. 

The biggest question, however, remains to be: Will the U.S. come to the defense of Taiwan with more than arms and aid should China attempt to take the island by force? As Taiwan continues to seek formal status, China will certainly intervene, and with the growing strength of Beijing, will the U.S. and its allies be able to protect the island? Time will tell as the situation develops under the policy of the current administration, whose current course seems to leave Taiwan on its own against Chinese aggression.