By Jeremiah Monk
Introduction
President-elect Donald Trump’s foreign policy positions—particularly concerning Taiwan, trade relations with China, and U.S. support for allies in NATO and Ukraine—have sparked global debate. His stance on Taiwan has shown a shift toward a transactional approach, while his policies on tariffs, NATO, and Ukraine may collectively influence the strategic calculations of the Chinese Communist Party (CCP) regarding a potential invasion of Taiwan. As we look ahead to the inauguration of the 47th U.S. President, Strategy Central would like to take this opportunity to examine the strategic implications that could face the U.S. regarding a potential shift in its long-standing policy regarding Taiwan. In this article we will:
1. Outline Trump’s position on Taiwan, his policies on tariffs, NATO, and Ukraine.
2. Explore how these policies may affect the CCP’s calculus on Taiwan.
3. Examine the strategic and long-term implications for the U.S. in the diplomatic, military, economic, financial, informational, and legal domains if it opts not to intervene in such a conflict.
President-elect Trump’s Position on Taiwan
Since his 2024 presidential campaign, President-elect Trump has approached Taiwan in a markedly transactional manner. While past U.S. policy has operated under “strategic ambiguity,” Trump has emphasized that Taiwan should “pay us for defense,” effectively likening U.S. military support to an insurance premium (AP News).
Trump has been critical of Taiwan’s dominance in the semiconductor industry, framing the issue as a challenge to U.S. economic security. By suggesting that Taiwan bear the cost of its defense, Trump has cast doubt on the U.S. commitment to Taiwan’s defense in the event of Chinese aggression. Analysts worry that Trump’s approach could embolden the CCP, creating uncertainty around whether the U.S. would intervene should China attempt reunification by force.
President-elect Trump’s Position on Tariffs, Ukraine, and NATO
Steep Tariffs on Chinese Goods: Trump’s trade policy has been marked by a commitment to “America First” and a focus on addressing trade imbalances with China. Trump has suggested imposing up to a 60% tariff on Chinese-made goods to reduce American reliance on Chinese imports, spur domestic production, and diminish China’s economic leverage over the U.S. (Reuters).
Withdrawal of Support for Ukraine: President-elect Trump has indicated he may halt U.S. military aid to Ukraine unless it negotiates a peace agreement with Russia. Trump’s stance suggests that, under his administration, U.S. support for Ukraine would be contingent on peace talks, rather than on maintaining Ukraine’s resistance to Russian aggression. This potential shift has raised concerns about the implications for U.S. credibility as a global security partner, as well as the broader impact on NATO unity and stability in Europe (Reuters).
Threatened Withdrawal from NATO: Trump’s criticisms of NATO focus on what he sees as an undue financial burden on the United States for European defense. He has repeatedly called for NATO members to increase their defense spending to the target of 2% of GDP or risk diminished U.S. support for the alliance (AP News). This stance raises questions about the future of U.S. commitments in Europe and could suggest a potential pullback, leaving European and Asian allies uncertain about American reliability.
How Trump’s Policies Could Influence China’s Decision to Invade Taiwan
China’s long-standing goal of “reunification” with Taiwan has been central to the CCP’s national agenda. Xi Jinping has reiterated that achieving this objective is crucial to China’s “national rejuvenation.” The Trump administration’s policies—particularly perceived U.S. retrenchment from global commitments—could alter China’s risk calculations on Taiwan. If Beijing perceives the U.S. as unwilling to intervene in conflicts involving allies, the CCP may view a Taiwan invasion as a viable and lower-risk endeavor (Taipei Times).
In the context of Trump’s proposed tariffs, withdrawal from NATO, and reduced support for Ukraine, China might calculate that a move on Taiwan would face limited opposition from the U.S. The CCP could interpret U.S. isolationist policies as an opportunity to act on Taiwan, aiming to reunify it with the mainland while expecting minimal U.S. military involvement.
Strategic Ramifications and Long-term Implications for the U.S.
If China were to invade Taiwan under the assumption that the U.S. would not intervene, the decision could lead to profound consequences for American influence globally. Here, we examine the potential impacts across diplomatic, military, economic, financial, informational, and legal domains.
Diplomatic Ramifications:
Alliance Credibility: U.S. reliability as an ally would be critically undermined, especially among Indo-Pacific allies like Japan, South Korea, and Australia. If the U.S. does not come to Taiwan’s aid, these allies might question whether they can depend on American security guarantees, potentially seeking other security arrangements or alliances.
ASEAN Realignment: Southeast Asian countries, wary of a growing Chinese influence, could tilt further towards Beijing. A perceived lack of U.S. commitment might push ASEAN nations to forge stronger ties with China, reshaping regional power dynamics.
Global Influence: U.S. credibility would likely suffer worldwide, diminishing American leverage in international organizations and weakening its ability to counter authoritarian regimes elsewhere.
Military Ramifications:
Strategic Loss of the First Island Chain: Taiwan’s strategic position in the “First Island Chain” is vital to U.S. military strategy in the Pacific. Losing Taiwan would allow China to project power further into the Pacific, complicating U.S. defense and reducing American naval and aerial maneuverability in the region.
Nuclear and Defense Posture Adjustments: With Chinese military presence so close to Japan and the Philippines, the U.S. may need to reassess its nuclear posture and regional missile defense strategy, likely spurring allied countries to bolster their own military capabilities.
Increased Defense Burden: Allies such as Japan and South Korea may increase their defense budgets, potentially exploring nuclear options to deter China, while the U.S. would face higher costs to maintain strategic deterrence in the Pacific.
Economic Ramifications:
Global Semiconductor Supply Chain Control: Taiwan’s semiconductor industry, especially TSMC, is crucial to the global tech sector. If China controls this industry, it would grant Beijing leverage over high-tech production worldwide, potentially restricting access to advanced technology for countries perceived as adversaries.
Regional Trade Reorientation: The U.S. could find itself increasingly isolated from Asian economic frameworks, with China asserting more influence over regional trade agreements. This shift could weaken U.S. economic influence and marginalize American-led trade initiatives.
Supply Chain Instability: Companies reliant on Taiwan-based supply chains would need to diversify, prompting costly relocations and a shift toward markets such as India or Southeast Asia.
Financial Ramifications:
Market and Currency Impact: China’s control over Taiwan could lead to market destabilization, particularly in the tech and electronics sectors, impacting global stock markets. China’s strengthened position may also support the yuan’s use in trade, challenging the dollar’s dominance.
Alternative Investment Destinations: Investors might shift away from East Asia due to perceived instability, redirecting capital to the U.S., Europe, or other “safe havens.”
Investment Shifts in U.S. Firms: Corporations may need to reevaluate risk exposure and dependency on Chinese and Taiwanese supply chains, accelerating diversification efforts.
Informational Ramifications:
Technological Dominance: Access to Taiwan’s semiconductor industry would enhance China’s tech sector and may allow Beijing to dominate critical emerging technologies, reducing the U.S. technological edge.
Propaganda and Influence: A successful annexation of Taiwan could bolster China’s global narrative, reinforcing Beijing’s model of authoritarian governance and promoting its influence over developing nations.
Cybersecurity Risks: Chinese control over Taiwan’s tech infrastructure could raise cybersecurity concerns for the U.S., as critical components in global supply chains may carry increased risk of surveillance or cyber manipulation.
Legal Ramifications:
Erosion of International Law Norms: A Chinese invasion of Taiwan, particularly without a robust U.S. response, would weaken norms against territorial conquest and shift the perception of force as a viable tool for border changes.
Implications for Maritime Law: China’s extended control in the South China Sea could further undermine the United Nations Convention on the Law of the Sea (UNCLOS) and challenge freedom of navigation operations, affecting international rights in these waters.
Human Rights Concerns: Taiwan’s integration into China’s authoritarian system would likely erode its democratic institutions, posing a challenge to U.S. global advocacy for democracy and human rights.
On the Other Hand: Potential Positive Implications
The strategic implications should Taiwan fall to the CCP are enormous and cannot be discounted. However, should the U.S. opt not to defend Taiwan in the event of a Chinese invasion, there may also be a measure of strategic benefit. One advantage would be the ability to reallocate resources domestically, focusing on areas like infrastructure and technological development, while conserving military assets for other global contingencies. This approach could also lessen the risk of U.S. overreach, allowing the U.S. to pivot more of its resources toward emerging strategic domains, including cybersecurity and space defense, where maintaining an edge over China may have lasting benefits for national security. This benefit comes at a price, however, as the U.S would sacrifice significant leverage and influence in the process, ultimately putting us in a more reactive position, dependent on other greater powers.
Non-intervention could also incentivize regional allies such as Japan, South Korea, and Australia to increase their defense spending, creating a more balanced distribution of security responsibilities in the Indo-Pacific. This shift may encourage the development of a multilateral defense framework within Asia, fostering a regional balance of power independent of U.S. intervention. Additionally, avoiding a Taiwan conflict would support efforts to “friend-shore” critical supply chains, reducing U.S. dependency on East Asia and providing leverage in global trade negotiations by diversifying supply sources. Again, there is a cost to this benefit, as those nations would pursue security means independently, potentially to include the development of nuclear capabilities.
In terms of diplomatic strategy, non-intervention could pave the way for a reset in U.S.-China relations, lowering the risk of direct conflict and potentially allowing for cooperation on shared global issues, such as climate change and health security. While choosing not to intervene would be controversial and could challenge longstanding U.S. alliances, it presents an opportunity for the U.S. to recalibrate its role on the global stage. By focusing on domestic resilience, allied self-sufficiency, and strategic innovation, the U.S. might fortify its influence in ways that could prove more sustainable in the evolving international order. But doing so would hand over significant power and influence to China, which in turn would put the U.S. at more of a disadvantage in future negotiations.
Conclusion
The implications of President-elect Trump’s foreign policy approach—characterized by a transactional view of alliances, economic nationalism, and skepticism toward longstanding commitments—could profoundly impact the CCP’s decision-making on Taiwan. A perceived retreat from U.S. global commitments, coupled with the introduction of steep tariffs and a reduction in support for Ukraine and NATO, may embolden Beijing to act decisively on its longstanding goal of “reunification.”
Should the U.S. ultimately refrain from intervening, the consequences would be far-reaching, fundamentally altering the global power balance and reshaping America’s role in the world. The loss of U.S. credibility, diminished military posture, economic disruption, financial instability, and erosion of democratic values would collectively redefine the post-war global order, leaving lasting impacts for decades to come.
A significant shift in U.S. foreign policy under President-elect Trump could significantly reshape international dynamics and influence China’s actions regarding Taiwan. The global community will be watching closely as the incoming administration’s policies unfold, potentially setting the stage for a transformative period in international relations. A shift toward a more isolationist U.S. posture may embolden rivals and reshape alliances, leading to a reordering of global power that could diminish the U.S.’s influence and strengthen authoritarian regimes. As China grows more assertive in the region and beyond, the U.S. will face crucial decisions that could define its role in safeguarding democratic values, maintaining global stability, and supporting its allies in an increasingly multipolar world.
In the years to come, the impact of these policies will be measured by the resilience of U.S. alliances, the strength of its economic and technological influence, and its capacity to counterbalance rising powers. The outcomes of these policies will not only affect Taiwan but will also echo across continents, influencing the trajectory of the 21st century’s international order.
References
Lisa Baertlein and David Kirton, “US suppliers, importers prepare for promised Trump tariffs,” Reuters, 6 November 2024. https://www.reuters.com/world/us/us-suppliers-importers-prepare-promised-trump-tariffs-2024-11-06/
Ellen Knickmeyer, “Can you ‘Trump-proof’ NATO? As Biden falters, Europeans look to safeguard the military alliance,” AP News, 8 July 2024. https://apnews.com/article/nato-summit-trump-biden-europe-ukraine-e45273ef1bd408d72245f8f7fd1ec5c0
Gram Slattery and Simon Lewis, “Trump handed plan to halt US military aid to Kyiv unless it talks peace with Moscow,” Reuters, 25 June 2024. https://www.reuters.com/world/us/trump-reviews-plan-halt-us-military-aid-ukraine-unless-it-negotiates-peace-with-2024-06-25/
Didi Tang, “Trump says Taiwan should pay more for defense and dodges questions if he would defend the island,” AP News, 17 July 2024. https://apnews.com/article/trump-taiwan-chips-invasion-china-910e7a94b19248fc75e5d1ab6b0a34d8
Y. Tony Yang, “Trump’s dangerous Taiwan gamble,” Taipei Times, 30 October 2024. https://www.taipeitimes.com/News/editorials/archives/2024/10/30/2003826076
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