Taiwan’s opportunities and risks during the post-Trump, new Biden era

The Taipei 101 building is seen amidst the Taipei city skyline February 9, 2009.  REUTERS/Nicky Loh/File Photo   GLOBAL BUSINESS WEEK AHEAD PACKAGE - SEARCH "BUSINESS WEEK AHEAD JULY 25" FOR ALL IMAGES
Editor's note:

This piece is part of the Taiwan-U.S. Quarterly Analysis series, which features the original writings of experts from the United States and Taiwan, with the goal of providing a range of perspectives on developments relating to Taiwan.

There are historical, national security, and economic reasons behind Taiwan’s support for the United States. Though the Taiwanese population had been nonchalant throughout the past few U.S. elections, the 2020 U.S. presidential election was highly anticipated. According to a YouGov poll conducted prior to the election, Taiwan was perhaps the only close U.S. ally, other than Israel, whose citizens expressed overwhelming support for President Trump’s reelection. The reasons may vary, but the predominate reason lies in popular concerns about China’s ambitious rise — which most Taiwanese perceive as a threat.

Trump changed the style of U.S. global leadership by shifting from multilateralism to focusing on bilateral relations, significantly impacting the post-World War II world order. Many Taiwanese viewed this shift favorably and dubbed Trump as a “pro-Taiwan American president” who worked to contain China to protect Taiwan’s security and democracy. Contrary to popular belief in Taiwan, however, Biden’s “substance over symbolism” approach could return the international order closer to pre-Trump normalcy, a foreign policy move that could help further elevate the U.S.-Taiwan relationship. A hopeful and healthy rebalance in U.S. foreign policy in terms of ends, ways, and means can benefit Taipei, Washington, and Beijing.

Taipei, Washington, and Beijing

In 2014, then-Secretary of State John Kerry referred to U.S.-China ties as a special and important relationship. He witnessed the relationship develop from a bilateral one to a complex global one. This transformation would be an understatement in describing the current global situation amidst a COVID-19 pandemic that has taken 2020 by storm. Beijing’s declaration of the “Chinese dream” and the growth of Chinese ambition since the 19th Party Congress has fundamentally impacted the world. Taiwan stands on the front line against regional hegemony, which is a precondition to China’s global rise, in Beijing’s revisionist view.

President-elect Biden respects multilateralism and a rules-based international system. Through leading by example and seeking collaboration with U.S. allies, the United States has the opportunity to once again restore its image as the leader of the free world, a step that would strengthen its ability to address the so-called China threat.

American scholars might see the China threat as the Chinese government’s efforts to game its exports; target businesses, academic institutions, researchers, and lawmakers; and pursue technical espionage and high-tech competition. For Taiwan, China is viewed as a threat to its democracy and national security. Taiwan’s concerns about China align with Washington’s geopolitical and ideological concerns.

Though not all Taiwanese have given up the idea of a peaceful reunification with a democratic China, supporters of reunification have been mostly silenced by the Chinese government’s aggressive behavior in recent years. The anti-China sentiment in Taiwan snowballed as people witnessed developments in Hong Kong.

Despite a longstanding relationship with alternating political parties in power, Taiwan and the U.S. are naturally closer when their views of the Taiwan-U.S.-China triangular relationship converge. Now, an increasingly assertive China across the board is viewed as a common challenge by both Washington and Taipei. There is reason to believe that the incoming Biden administration will tread more carefully and strategically to prevent U.S.-China tensions from escalating into a hot war — what former U.S. Assistant Secretary of State for East Asian and Pacific Affairs Kurt M. Campbell and Jake Sullivan described as competition without catastrophe.

The Biden administration will prioritize “substance over symbolism” when engaging with Taiwan and other allies. Its broader policy platform will not be nearly as vocal and demanding as the previous administration. Biden’s national security adviser nominee Jake Sullivan wrote in May 2020: “So long as Washington retains a strong military position along the first island chain, regional powers — from Vietnam to Taiwan to Japan — will try to resist China’s rise rather than accommodate it.” From this, it could be inferred that the U.S. will help Taiwan bolster in its asymmetrical military capabilities, strengthening the island’s defensive deterrence against Beijing — the “substance” of the matter. In addition, the Biden administration likely will be more reserved in signaling official gestures between itself and Taipei to avoid stirring up direct confrontation in a geopolitical hotspot — “symbolism” downplayed.

Though Biden does not intend to normalize official U.S.-Taiwan relations, he has long shown a strong preference for both strategic ambiguity regarding Taiwan and maintaining the cross-strait status quo. This is reassuring for both the Chinese Communist Party (CCP) and the Taiwanese people. After a sense in Taiwan that its fate was left undecided and unattended to, there is a prospect of restored stability — the triad will maneuver carefully around the demarcation set by the status quo.

The one thing Americans across the political spectrum have in common right now is unwavering support for a hardline policy against China. In all likelihood, the U.S. will continue to press hard against China on contentions of human rights abuses and unfair trade practices. No swift removal of sanctions is expected anytime soon, and technological decoupling (especially in the semiconductors industry) and tariffs will remain for the time being. At the current stage, the domestic political capital that Biden will lose if he undoes Trump-era China policies is too costly for the new administration.

Taiwan has become a major beneficiary during the U.S.-China decoupling process for two reasons. First, the U.S. has been encouraging a supply-chain transfer away from mainland China to Taiwan and other allies in the Indo-Pacific. Second, this is a good opportunity for Taiwan to shift its economic dependence on China elsewhere, mitigating risks of political uncertainty. Both trends are likely to continue.

Since the root of the conflict between the United States and China stems from shifting power dynamics and the closing power gap between them, tension and competition will not be resolved with Biden as president. However, due to the particularity of Trumpism, Biden will try to adjust his China policy in three important ways.

First, the strategic hawks will overwhelm the mercantilist economic hawks. The United States will place greater relative emphasis on strategic security; tariffs will not serve as the primary tool for dealing with China. The focus will be on reducing trade deficits, protecting intellectual property rights, opposing forced technology transfer, and opening up the market. Second, more support will be given to the United States’ traditional and strategic allies. Third, the United States will seek cooperation with mainland China on a number of issues (such as environmental protection, climate change, and even the fight against the COVID-19 pandemic). Even with these shifts, though, there will not be a “fresh start” or “reset” in U.S.-China relations because of broader dynamics in the Indo-Pacific.

Even with these shifts, though, there will not be a “fresh start” or “reset” in U.S.-China relations because of broader dynamics in the Indo-Pacific.

The domestic politics factor

U.S.-China great power competition has also been, in part, the result of the shifting power dynamic between Taiwan’s traditional Kuomintang Party (KMT) to the young Kuomintang (representing the younger generation), which fostered an anti-CCP mentality. Traditional KMT voices position the party as the “strategic ally” to the United States and perceive the party as the legally constituted authority of China and a contender to the CCP. The young Kuomintang presents itself as a “democratic ally” to the United States for the sake of security, while at the same time engaging with mainland China under the “1992 Consensus, one China with different interpretations” as a buzzword for “risk aversion.” Further, KMT traditionalists’ ultimate goal is to reunify China under the Republic of China, whereas the younger generation treats reunification as one potential option but sees maintaining a peaceful status quo as the crown jewel. The younger generation of the KMT sees the door for reunification as unlikely but not fully closed. This policy stance creates a strategic ambiguity, attracting economic centrist voters who value stability, thus positioning the KMT to be less confrontational towards Beijing.

The Democratic Progressive Party (DPP), on the other hand, prioritizes siding with the U.S., front-and-center, to fend off Chinese pressure. This leaves little room for risk aversion with Beijing. Therefore, the DPP matches U.S. policy every step of the way. During Trump’s administration, as U.S.-China relations drastically deteriorated, the CCP constantly placed Taiwan under great pressure. Beijing abandoned its earlier tolerance of “different interpretations” of the 1992 Consensus. This provided the DPP an opportunity to equate the 1992 Consensus with the “one country, two systems” formula that Beijing had previously applied to Hong Kong. As the ruling DPP adopts a more nationalistic position just short of de jure independence towards China, the party has won over the hearts and minds of the majority of Taiwan’s younger generation, who predominantly support Taiwan independence.

Traditionally, the social values of the KMT and DPP aligned closely with America’s Republicans and Democrats, respectively. But in recent years, the China issue has realigned the parties. With four years of Trump’s hardline rebuke of Beijing and the CCP, the current political environment starkly juxtaposes Beijing and Taipei. This has led the DPP to somewhat accept the Republicans’ position that Taiwan acts as an example for Chinese democracy, an old KMT position. Interestingly, both the pan-Blue camp (generally pro-KMT) and pan-Green camp (generally pro-DPP) in Taiwan, though concerned, also see the China threat as a political opportunity. The Green camp sees this as a chance to encourage the U.S. to support and incentivize its pro-independence cause. The Blue camp sees the situation as an opportunity to encourage other major powers to pivot away from China and upgrade its relations with Taiwan. Further, with Biden’s pragmatic, risk-averse, yet principled and firm China policy, it is likely that both major parties in Taiwan would adopt a more centrist position vis-à-vis China, or ideally act as propellants of China’s democratization.

Tension between the United States and China seemed to have come to a head under the Trump administration. Trump has made a return to the status quo impossible, but so far, Biden’s stance towards Beijing and his commitment to a values-based foreign policy is promising. Taiwan should follow suit and take a pragmatic approach, and avoid becoming what Graham Allision described as “a ticking time bomb that could lead to a tragic conflict [between the United States and China].” But in this context, Taiwan should reevaluate its grand strategy to closely align with the United States, which is a policy that has full support across the partisan spectrum in Taiwan. It is important to resist the chauvinistic desires and zealous nationalism in domestic politics on all sides of U.S.-Taiwan-China trilateral relations. The players should work to achieve a détente in economic areas that allow win-win-win situations, while maintaining credible deterrence in security arenas to demonstrate the wisdom of “agree to disagree” (求同存異).

The future under Biden

U.S.-China relations are a two-way street, but China’s definition of cooperation means “do as I say,” and “win-win” means “China gets the upper hand.” If the CCP wants to repair relations with the United States and Taiwan, the first thing it should do is stop flexing its muscles in the Taiwan Strait. With the current situation in Hong Kong, Beijing should cease to promote the “one country, two systems” formula, or the Taiwan cause might be lost forever. Even though Xi Jinping and Joe Biden are not strangers, both China and the U.S. will need to walk a careful line.

Beijing also will need to adjust its expectations. During the presidential campaign, Biden vowed to be tough toward China. Now, he will need to follow through. Beijing cannot expect to see a return of “friendly Joe.”

At the same time, the United States needs to increase trade and military cooperation with Taiwan, further promote bilateral investment flows, and further integrate Taiwan into the international market economy. If the U.S. and China find a new framework to cooperate, Taiwan can be a U.S. rebalancing partner and the pivot for the Taipei-Washington-Beijing triangular relationship.

Taiwan should expect a weather but not atmosphere shift from Trump-era policies. As the Biden administration must prioritize its domestic policies over foreign affairs until the U.S. manages the COVID-19 pandemic, and is more “reserved in adopting high-profile gestures,” Taiwan should continue to work closely with Washington and keep a relatively lower profile than during the previous four years. Taiwan must readjust its pace with a new Biden administration in power and handle the Chinese pressure at the same time. This is the biggest challenge for the Taiwan government. Taiwan is accustomed to traveling on a tailwind. Now the island must withstand headwinds to manage risks while it strives to seize new opportunities.