What Trump Means for Taiwan by CASS Analyst Zhang Hua
"China has accumulated more tools for counteraction and is increasingly resolute in its determination to resist US bullying."
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Today’s edition offers a rare glimpse into how Chinese analysts are evaluating Trump’s impact on Taiwan and cross-Strait relations. The piece summarised below is authored by Zhang Hua (张华), a senior researcher at CASS's prestigious Institute of Taiwan Studies.
Overall, Zhang believes that Trump will maintain the US’s existing policy towards the island, with his aversion to war prompting him to restrain Lai Ching-te’s pro-independence “provocations”. However, Zhang argues that Taiwan is likely to rank low on Trump’s list of priorities. Washington’s primary focus, he suggests, will remain on domestic issues, while any attention given to foreign affairs will centre primarily on Ukraine and the Middle East.
Will Trump strike a deal with Xi over Taiwan? Zhang is sceptical. He believes the island will be kept as a lever for his administration to apply pressure on Beijing whenever US-China relations sour. He also shares the prevailing view among Chinese analysts that Trump’s volatility may cause spikes in tensions, but that an armed conflict over Taiwan remains highly unlikely during his presidency.
Paddy Stephens
The Scholar
Name: Zhang Hua (张华)
Year of birth: 1982 (age: 42/43)
Position: Director, Department of General Studies, Institute of Taiwan Studies, Chinese Academy of Social Sciences (CASS)
Research focus: Cross-Strait relations; Taiwanese politics
Education: PhD University of International Relations
Experience abroad: Taiwan (2015)
TRUMP 2.0 ERA: PROSPECTS FOR HIS TAIWAN POLICY
Zhang Hua (张华)
Published by China Review News on 16 January 2025
Summarised by Paddy Stephens
(Illustration by OpenAI’s DALL·E)
I. Key Indicators of Trump’s Upcoming Taiwan Policy
1. US-China relations are at a structural impasse (结构性困局). Despite a few extreme calls for Washington to decouple its Taiwan policy from its relationship with Beijing, US policy towards the island continues to serve Washington’s overarching strategy towards China.
US politicians prioritise American interests above all else. Their stance on Taiwan serves purely as a means to further these.
Zhang: “The United States has adopted an all-encompassing government-wide and society-wide stance of strategic competition with China. Looking ahead, it is unlikely that the US’s strategy towards China will change in the short term.”
2. During his first term in office, Trump largely adhered to America’s long-standing “One China” policy, while strengthening relations with Taipei. This is likely to continue.
For instance, Washington approved more arms sales to Taiwan than under any previous US president and established several economic dialogue mechanisms with the island. Such policies made Trump very popular in Taiwan.
3. Trump fulfilled a high percentage of his first-term campaign promises related to trade, the military and foreign relations. His recent remarks about Taiwan are therefore noteworthy:
He has accused Taiwan of “stealing” the US chip industry and proposed imposing tariffs to pressure Taiwanese semiconductor companies to invest in the US.
When asked about whether or not he would defend Taiwan, Trump’s responses have been ambiguous. He has acknowledged the challenge of defending Taiwan due to its distance from the US, but has also both threatened to impose tariffs of 150–200% on China and even talked about bombing Beijing.
Trump has criticised Taiwan’s defence budget as inadequate, arguing it should be increased to 10% of GDP. He has also compared the US to an “insurance company” and stated that, like “the mob”, America should demand protection money.
4. The US has become a less important trade partner for China.
In 2024, approximately 15% of Chinese exports went to the US, down from 19% in 2018.
If Trump maintains his fixation on trade balances, he may prioritise reducing US trade deficits with Mexico and Canada—America’s top two trading partners—over focusing on China
Meanwhile, Taiwan’s trade with the US has surged in recent years, with its trade surplus increasing from $9.2 billion in 2016 to $50.8 billion in 20
Zhang: “[Such changes in trade data] will influence Trump's priorities in managing foreign economic relations.”
Zhang: “[Our recent export bans on critical minerals such as gallium] indicate that China has accumulated more tools for counteraction and is increasingly resolute in its determination to resist US bullying.”
Moreover, China now has experience in dealing with Trump, who was an unknown quantity back in 2016. Beijing will now be able to handle issues with greater precision (更具精准性) and confidence.
5. Trump’s initial focus is expected to centre on tax cuts, tariffs, illegal immigration, and combating the “deep state”, rather than on foreign policy.
The Russia-Ukraine and Israel-Palestine conflicts are likely to take precedence over Taiwan.
Although Trump now holds absolute authority within his administration, his limited time and energy create significant opportunities for his team, including notorious China hawks like Marco Rubio, to influence Washington’s approach to Taiwan.
II. Trump’s Potential Approach to Taiwan
1. Trump is expected to maintain the US’s longstanding approach to Taiwan and cross-Strait relations, while further bolstering economic, military and diplomatic support for the self-governing island.
2. He is also unlikely to “make a deal” involving Taiwan (‘交易’台湾) with China.
Zhang: “One reason is that the ‘Taiwan card’ is the most valuable card [最有力抓手] the US has in its strategic competition with China. An even more important reason is China's stance that Taiwan has been an inseparable part of its territory since ancient times … It is totally out of the question for China to make a deal involving its own territory with foreigners [绝不可能拿本就属于自己的领土与外国人交易].”
Moreover, the risk of a future Democratic president reneging on such an agreement in any case undermines America’s credibility in negotiating a deal with China.
3. Uncertainty continues to cloud US-China relations. Washington’s emphasis on Taiwan will shift depending on how its relationship with Beijing evolves.
Zhang: “If things start off well [开局良好], Taiwan’s utility to the US diminishes [利用价值降低]. In contrast, if relations deteriorate, Trump is likely to leverage the Taiwan issue to exert pressure on China.”
III. How Trump Will Handle Lai, the “Taiwan Independence Worker”
1. Trump will require Taipei to align with his approach to China. He is highly averse to war and will curb Lai’s pro-independence “provocations”.
Zhang: “Under Biden, though [Washington] repeatedly promised not to support Taiwanese independence, it never openly criticised Taipei. On the contrary, it echoed the rhetoric used by the Taiwanese authorities, placing the full responsibility for the deterioration of cross-Strait relations on Beijing. Trump may handle pro-independence provocations that escalate tensions [very] differently.
Taiwan is in a position of absolute weakness (绝对弱势) in US-Taiwan relations, and generally complies with any demands made by Washington.
Lai avoided provocative “Taiwan independence” rhetoric in his “Double Ten” speech marking the national day of the Republic of China (ROC) and complied with US arrangements for him to avoid transiting through the US mainland in December. This may indicate a shift towards aligning with Trump’s China policy.
Zhang: “When there is a need to use Taiwan to put pressure on Beijing, Trump will take steps to strengthen US-Taiwan relations and may even resort to extraordinary actions similar to those seen during his first term. However, if he determines that “Taiwan independence” provocations are hindering his agenda with China, he will suppress them without hesitation.”
IV. Trump’s Demands on Taiwan: Unrealistic Expectations and Potential Backlash
1. Increasing Taiwan’s defence budget
Taipei is set to increase its purchases of US military equipment, but will be unable to raise defence spending to 10% of GDP, as Trump has demanded. Such an increase would account for 84% of Taiwan’s total government budget. Pushback on the island has already begun.
That being said, Taiwan’s “whole-of-society defence resilience” involves defence budgets distributed across various departments, meaning actual defence expenditure might be much closer to the 10% figure.
2. Reducing Taiwan's US trade surplus and boosting investments
Taipei will struggle to reduce its trade surplus with the US, as its main imports consist of passenger aircraft, agricultural products and petrochemical energy.
Taiwan’s passenger aircraft fleet is relatively modern, resulting in limited demand for large-scale purchases of US aircraft.
Taiwan’s capacity to increase agricultural imports from the US is limited. Any additional growth would be insufficient to reduce the ROC’s trade surplus in any meaningful way.
Taiwan could still increase its oil and gas imports from the US, aligning with Trump’s policy of promoting increased fossil fuel extraction.
Taiwan has substantially increased its investments in the United States in recent years, while investments in mainland China have sharply declined. This trend is expected to persist under pressure from Trump, but Taiwan’s overall capacity for outbound investment is nearing its upper limit.
3. Risks for Taiwan
Trump's economic demands on Taipei are likely to accelerate the island’s decoupling from mainland China.
If cross-Strait trade continues to decline and US tariffs are imposed on Taiwanese goods, it could deal a severe blow to Taiwan’s economy.
Furthermore, while a strong dollar could boost Taiwan’s exports in the short term, it would also raise the costs of importing equipment and raw materials from the US, Europe and Japan, potentially eroding the country’s long-term industrial competitiveness.
If TSMC is forced to manufacture its most advanced chips in the US, Taiwan risks losing the strategic protection of its “Silicon Shield”.
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