 "Calm over Taiwan Strait? How Taipei hopes to counter Beijing's ambitions")
Editor’s Note: The tenth edition of Raisina Dialogue, India’s flagship conference on geopolitics and geo-economics, is now underway in Delhi. Firstpost, which has partnered with the Observer Research Foundation (ORF) for the summit, brings you this article on Taiwan amid continued rising tensions with China and Donald Trump back in the White House
China this week conducted new military exercises near Taiwan.
Beijing sent dozens of warplanes, including its J-10 fighter jets and drones to the areas near Taipei.
Of these, 42 crossed the median line along the Taiwan Strait – the unofficial buffer between the two sides.
China claimed the exercises were punishment for Taiwanese President Lai Ching-te’s continued promotion of “separatism.”
Taiwan, meanwhile, accused China of being a troublemaker.
China, which views democratically governed Taiwan as its territory, has vowed to bring it under control someday – by force if necessary.
But how do Taiwan’s foreign relations shape its security and economic policies? How will it engage with the new administration in Washington?
Let’s take a closer look:
Taiwan and foreign aid
As per Japan Times, though Taiwan just a dozen official diplomatic partners, it has 111 missions across the world.
Taiwan has used aid as an outreach tool across the world.
As per ModernDiplomacy.Eu, Taiwan first got aid from the US in 1951.
The massive amount, $1.482 billion, was used to invest in infrastructure and industrial equipment.
Taiwan in turn began providing aid to others in 1959.
Taipei’s first outreach was with technical missions in Vietnam and Africa.
After Taiwan lost its UN seat in 1971, it carried out aid missions in Africa, Asia, and Latin America.
Taiwan uses aid to foreign nations as a device to counter China’s attempts to diplomatically isolate it.
“Taiwan occupies a unique position in global geopolitics, especially due to its unrecognized statehood. Under pressure from China, Taiwan uses foreign aid as a diplomatic tool to expand its influence in developing countries, particularly in Asia, Africa, and Latin America,” the piece noted.
Taiwan-US ties
Arguably Taiwan’s most important foreign relationship is with the United States.
As per PBS, Taiwan during Trump’s first term increased its arms purchases from the United States with an eye on China.
As per Time Magazine, Taiwan purchased $18 billion in military sales from America.
This included a massive $8 billion for 66 fighter jets.
The Trump administration, meanwhile, increased security ties with Taiwan by sending over an under-secretary from the State Department.
Trump himself, typically, has sent mixed messages on the subject.
Trump has said that Taiwan should pay the US for defending it against China.
“If I answer that question, it will put me in a very bad negotiating position,” Trump was quoted as saying by GlobalTaiwan.org.
Trump has also slammed Taiwan for taking away the US’ “chips business.”
“You know, we’re no different than an insurance company. Taiwan doesn’t give us anything,” Trump was quoted as saying by Time Magazine.
On the other hand, Trump has also picked several ardent hawks on China in his cabinet including Secretary of State Marco Rubio and National Security Adviser Mike Waltz.
“We are against any sort of compelled, forced change of status. That’s been our policy; that remains our policy,” Rubio said in February as per Time Magazine.
The outlet quoted JD Vance as saying, “We should make it as hard as possible for China to take Taiwan in the first place.
“America is stretched too thin. We do not have the industrial capacity to support a war in Ukraine, a war in Israel, potentially a war in East Asia if the Chinese invade Taiwan, so America has to pick and choose. The Chinese are focused on real power. They’re not focused on how tough people talk on TV or how strong our alleged resolve is. They’re focused on how strong we actually are, and to be strong enough to push back against the Chinese, we’ve got to focus there.”
“The fact that I’m not sure whether Donald Trump will defend Taiwan may not be a bad thing,” retired Lieutenant General HR McMaster, a former national security adviser under Trump, told Frontline.
As per Time Magazine, Taiwan ), has a $73.9 billion trade surplus with the US.
Most of it comes from semiconductors – Taipei makes 90 per cent of the world’s most advanced chips and is home to the world’s largest chip manufacturing company (Taiwan Semiconductor Manufacturing Company).
Though the US continues to adhere to its ‘one China’ policy – which recognises Beijing as the official government of China – and keeps diplomatic relations with Taiwan unofficial under the Taiwan Relations Act, it remains Taiwan’s biggest military backer by far.
Taiwan has the Taipei Economic and Cultural Representative Office in DC as well as a dozen other offices in the US.
Washington, meanwhile, has the American Institute in Taiwan (AIT) in Taipei.
Taiwan, for its part, said it will deepen military cooperation with the United States including intelligence sharing and holding joint tabletop exercises.
The 2025 Quadrennial Defence Review (QDR) said Taiwan was planning to gradually deepen military exchanges with the US, including convening “high-level” strategic dialogues, observing drills, conducting joint tabletop exercises and sharing intelligence.
“The United States is an important strategic partner of our country and has close military exchanges and cooperation with us,” the review said.
Based on existing cooperation, it added that Taiwan would push for strategic cooperation between the two sides “in multiple fields and at multiple levels.”
The review said Taiwan would seek to enhance the interoperability of the two countries’ armed forces, adding the cooperation would help boost Taiwan’s defence capacity in areas including long-range precision strikes, battlefield command and control as well as surveillance and reconnaissance.
Ties with India
Taiwan and India are trying to improve relation – despite not having official ties.
As per Hindustan Times, India and Taiwan set up officers in Taipei and New Delhi in 1995.
New Delhi has the India-Taipei Association (ITA) office in Taiwan, while Taipei has three offices in India including the Taipei Economic and Cultural Center ( TECC).
Bilateral trade between India and Taiwan stood at $10.1 billion during the fiscal year ending in March 2024.
In 2023, trade between the two was valued at $8.2 billion.
The total investment of Taiwanese firms in India has crossed $4 billion.
This ranges from footwear, machinery, automobile components to petrochemical and ICT products.
The newspaper quoted Taiwan’s foreign minister Lin Chia-Lung was quoted as saying, “I think the Indo-Pacific framework or the Quad just [bring] together several countries because we are now faced with similar geopolitical challenges. All these related countries are put under the same geopolitical framework and the reason [for this] is China’s rising power and its expansionism.”
“China is challenging the existing rules-based international order. I think it is legitimate that all countries, especially like-minded countries, get together and have closer cooperation and dialogue to face the challenge together, and among these [countries], India is especially important,” he added.
Ties with Europe
According to GlobalTaiwan.org, in August 2022, it was then US Speaker of the House Nancy Pelosi’s visit to Taiwan that inadvertently gave a fillip to European-Taiwan ties.
Taiwan President Lai Ching-te in November called for the signing of an economic partnership agreement with the European Union, saying it would boost cooperation in semiconductors and that as democracies the two sides should be working together.
Taiwan has pushed for the signing of investment and trade deals with the EU, in what would be politically significant for Taiwan given its diplomatic isolation and general exclusion from most global bodies and agreements.
For its part, the EU has been courting Taiwan as a “like-minded” partner under the European Chips Act to encourage more semiconductor production in Europe and lessen dependence on Asia, despite the lack of formal ties with the Chinese-claimed island.
Taiwanese investment in EU has been anchored by Taiwan Semiconductor Manufacturing Co (TSMC) – which in August launched a major new chip plant in Dresden, Germany, expected to be a key supplier to European industry and automakers.
However, the European Union too does not recognise Taiwan as an independent nation.
The piece noted that the bloc is split on Taiwan – with some members adhering to China’s stance and the others insistent on backing Taiwan.
Taiwan has few free trade agreements, though in 2023 it signed an Enhanced Trade Partnership with Britain and has applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP.
Ties with Japan
Japan too does not recognise Taiwan as an independent nation.
However, that hasn’t stopped them from reaching out to each other.
As per Japan Times, both ruling parties are meetings.
Meanwhile, think-tank level cooperation and invitations to state ceremonies have been exchanged.
One of Taiwan’s top diplomats recently sang Kyoto’s praises.
“We are very happy we can talk more and more with Japanese officials and diplomats, unofficially, without major obstacles,” Deputy Foreign Minister Francois Wu told Japan Times. “Japan feels more and more comfortable working with Taiwanese officials, unofficially.”
“We are now being invited regularly to the emperor’s birthday celebrations, something that didn’t happen several years ago,” Wu said.
The growing engagement is based on better relations between our peoples, and so what President Lai wants is to build on this momentum to enable greater unofficial interactions between high-ranking officials,” Wu added.
“Taiwan is now considered by Japan, France, America and other countries as a friend. So we can talk with our friends, especially as we share more and more common interests,” Wu said. “The definition of unofficial can be as large as possible.”
How will Taiwan engage with the Trump administration?
Experts say Taiwan is staring at a critical period in the years ahead – and needs to tread carefully.
“For Trump, ultimately, what he cares about [is] the balance of trade,” Chin-Hao Huang, associate professor at the National University of Singapore’s Lee Kuan Yew School of Public Policy, told Time Magazine.
“Trump’s ultimate red line is he wants to see jobs come back to the United States,” Huang explained. “He wants to see the semiconductor industry in the United States thrive again. So this means investment.”
As Haruka Satake wrote in East Asia Forum, “With Trump’s foreign policy approach largely transactional and focused on financial leverage, Taiwan will need to navigate a shifting dynamic that could reshape its relationship with both the United States and China.
Satake, in her piece, noted how Trump has taken aim at Taiwan’s spending on defence.
“Trump’s transactional foreign policy will likely demand increased financial contributions in military purchases, pressuring Taiwan to invest more in its own defence while supporting the US defence industry. Taiwan must navigate these pressures carefully, balancing economic stability with military deterrence within the complex US–China–Taiwan triangle,” Satake warned.
The piece in Global Taiwan, said Trump’s threats on chips, pharma and steel have resulted in “uncertainties and concerns in Taiwan and the broader world.”
“However, it is important to note that Taiwan occupies a strategically vital position, both for regional security and for the defence of critical US interests in the Indo-Pacific,” the piece added.
It also noted that an attack on Taiwan by China would disrupt the semiconductor trade – which would have massive repercussions around the world.
“Despite Trump’s unfavourable rhetoric toward Taiwan, the island’s significant geopolitical and geostrategic leverage remains impossible to ignore for the United States,” the piece concluded.
But others aren’t so optimistic.
As Steve Tsang of the School of Oriental and African Studies at the University of London, told Time Magazine, “I haven’t seen any evidence that Trump cares much about Taiwan for being a shining example of a US-sponsored democracy.”
“The evidence I have seen is that Trump is first and foremost for Trump, for which he would want to maintain a working relationship with Xi, so he could do some kind of a deal that would project Trump as a winner.”
With inputs from agencies
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