Trump 2.0’s Strong Comeback and Taiwan’s Strategic Options – Part III

This is Part three of a three-part series, a translation of the original 川普2.0強勢回歸與台灣的對應選擇 by I-Chung Lai (賴怡忠), a journalist and columnist. Originally published by Voice Tank. Translation by Stacy Tang.

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US pressures on Taiwan’s defense budget; new directions in trade

Taiwan should prepare for heightened pressure to increase its military budget in the Trump 2.0 era. This call for an increase has been voiced not only by Trump but also by his staff. The numbers that have been proposed for defense spending hike ranged from 5% to 10% of GDP. Although this does not mean that the US will insist on these specific figures—especially given that some may privately acknowledge them as unrealistic—the push for Taiwan to significantly raise its defense budget is inevitable.

Although Taiwan’s defense budget should be determined by an assessment of the actual threats it faces, rather than to meet the expectations of other countries, the growing and increasingly imminent threat from China makes it reasonable for Taiwan to be asked to raise its defense budget to a level comparable to Poland’s (which faces Russia, although Russia has not explicitly threatened to wipe out Poland). With Trump returning to office, Taiwan must not only prepare for the potential increase in defense spending but also in investments in “defense-related matters” outside the Ministry of National Defense’s budget and present this information to the international community. This will help demonstrate Taiwan’s firm commitment to self-defense on the global stage.

Additionally, Trump’s team views free trade as a means for foreign countries to take advantage of the US, resulting in a growing trade deficit. As a result, in the Trump 2.0 era, expectations for a US-Taiwan free trade agreement will need to be lowered. Trump has even advocated for high tariffs on foreign imports to the US to force countries and manufacturers to invest in building factories in the US to produce those goods. This means that during Trump’s second term, Taiwan will need to adjust its expectations for trade agreements and re-prioritize its economic strategy with the US.

This concern is shared by many countries, not just Taiwan. Nearly every nation with close ties to the US has similar worries. As a result, this situation creates an opportunity for Taiwan to enhance communication and cooperation with other US allies. Former Japanese Prime Minister Shinzo Abe’s approach to managing the first Trump administration is often seen as a model. Abe was the first foreign leader to meet with Trump at Trump Tower, even before Trump officially assumed office, making him the first to establish a relationship with Trump while internal debates were still ongoing about Trump’s suitability as president. This early engagement helped ensure smooth US-Japan relations for the next four years.

Abe also took proactive steps in response to Trump’s withdrawal from the TPP, ensuring that the economic agreement did not collapse just because the US was no longer part of it. Instead, he took on the responsibility of maintaining the TPP, successfully reviving it under the CPTPP framework, which not only survived but expanded and grew stronger. While Abe worked on building a personal relationship with Trump, he was also aware of other countries’ concerns about Trump’s leadership, using these concerns as a driving force to develop new strategic partnerships. The approach taken by Prime Minister Abe eight years ago offers a valuable diplomatic blueprint for Taiwan today.

Internationalizing security in the Taiwan Strait must not reverse

The biggest challenge Taiwan faces with a potential Trump administration is the risk of stagnating the “Internationalizing Security in the Taiwan Strait” trend developed during the Biden era. Under Biden, the US and its key allies took a strong stance on Taiwan Strait security, initiating regular patrols by other countries in the region and rejecting China’s claim that the Taiwan Strait is Chinese internal waters. This approach also contradicted the positions of both the KMT and the CCP, both of which treat Taiwan’s security as an exclusively cross-strait issue. However, with Trump returning to office, the chances of maintaining this international consensus on Taiwan Strait security are reduced, especially given the expected tensions in US-ally relations, which could lead to debates on the matter.

Taiwan cannot afford to revert to the old paradigm which views Taiwan Strait issues solely as cross-strait relations or within the US-China-Taiwan triangle. This perspective would undermine Taiwan’s position, particularly as the “China-Russia-Iran-North Korea authoritarian axis” poses an escalating threat to East Asia. Taiwan must actively engage with both the Biden administration and Trump’s team while Biden is still in office. The goal is to build a robust institutional framework to solidify the internationalization of Taiwan Strait security and to seek Trump’s support to back this approach. When discussing with the Trump team on Taiwan Strait issues, Taiwan should position Taiwan Strait security within a broader regional context, highlighting its significance for regional stability and US interests. Relying on the traditional US-China-Taiwan triangle framework risks reducing Taiwan’s strategic importance to Trump’s transactional thinking of the “tip of a pen versus the table.”

Taiwan must actively leverage G7 members and other nations to strengthen ties with the US, Japan, and Beyond

Trump’s first-term experience will shape his actions and priorities in his second term. Among the most memorable moments of his first presidency was the picture from the iconic image from 2018 G7 Summit: Trump sat glaring at then-German Chancellor Angela Merkel while Japan’s Prime Minister Shinzo Abe stood nearby with arms crossed with apparent resignation. If Trump returns to the G7, the scene would look quite different. The only familiar face from that era will be Canadian Prime Minister Justin Trudeau, who maintained a relatively cordial relationship with Trump during their past interactions.

Additionally, Italy’s Prime Minister Giorgia Meloni, who shares ideological similarities with Trump and had connections with him even before taking office, is likely to be another ally. Trudeau and Meloni are expected to be Trump’s more congenial conversation partners at the summit. Meanwhile, French President Emmanuel Macron is likely to reiterate calls for Europe’s strategic autonomy and may even revive his claim that NATO is “brain-dead.” German Chancellor Olaf Scholz has views sharply contrast with Trump’s, and the UK’s Labour prime minister would likely share little common ground with him. The dynamics of this new G7 will be markedly different from those of the past four years.

The G7 has become a major driver of international support for Taiwan, supporting for internationalizing security in the Taiwan Strait, advocating new avenues for Taiwan’s participation in international organizations, and potentially issuing statements in support of Taiwan regarding UN Resolution 2758. As the dynamics of the G7 evolve, Taiwan must find ways to leverage these changes. In addition to strengthening Taiwan-US relations, it is essential to maintain the G7’s support for Taiwan. If this platform loses its support for Taiwan, the impact on Taiwan’s efforts to gain international support could be severely detrimental.

In addition, US-India relations are expected to develop rapidly. Not only did Trump had a relatively good personal relationship with Indian Prime Minister Narendra Modi during his first term, Modi will be one of the few foreign leaders with whom Trump is familiar (besides Putin, Xi Jinping, and Kim Jong-un, all of whom are autocrats). Taiwan must not only monitor US-India relations but also explore how to leverage it to strengthen Taiwan’s relations with both the US and India.

2025 marks 20 years of the 《Anti-Secession Law》, 2026 APEC in China expected to bring increased pressure on Taiwan

Once the election is over, the so-called Chinese restraint towards Taiwan, which was intended to prevent Taiwan from becoming a factor in the US presidential race, will no longer apply. The pressing question is whether China will take further action against Taiwan. Some argue that China will refrain from doing so because such a move would be seen as an effort to assert dominance over Trump, worsening US-China relations even before he takes office. However, others contend that with wealthy businessman Elon Musk already serving as an insider within Trump’s circle, such actions may not provoke a backlash from Trump. Whether China will carry out the “United Sword 2024-C” military exercises later this year, during the US government’s transitional phase remains uncertain. This could provide an opportunity to access the influence of the Musk factor on US-China relations.

Next year marks the 20th anniversary of China’s Anti-Secession Law. The 10th anniversary of the law in 2015 was highlighted by the unexpected meeting between Xi Jinping and Ma Ying-jeou. With this 20th anniversary coinciding with the 10th anniversary of the Ma-Xi meeting, China is expected to take action. Taiwan’s former President Ma Ying-jeou, who has been advocating for trust in Xi, may also align his actions with this significant moment.

More importantly, 2026 will be China’s turn to host the Asia-Pacific Economic Cooperation (APEC) summit. During Trump’s first term, he showed little interest in APEC or other regional forums like the ASEAN Summit, although he did attend the 2017 APEC summit in Vietnam. How to manage the situation, with the hope that he will address Taiwan’s challenges with China positively, needs to be planned now. Even more crucial is that shortly after the 2026 APEC summit, Taiwan will hold its nine-in-one elections. Therefore, in addition to China’s inevitable interference in Taiwan’s local elections, the APEC summit will provide fodder for China’s propaganda machine to manipulate. These issues must be addressed and prepared for as of now.

Increased uncertainty with Trump 2.0: Taiwan must proactively present its strategy to seize opportunities

Due to Trump’s lack of positive language towards Taiwan during the election, many Taiwanese people are highly concerned about the potential impact of a Trump presidency on Taiwan-US relations. Given the crucial role of US support in Taiwan’s security, these concerns are not without basis.

However, at its core, Taiwan enjoys historically strong bipartisan support in the US Congress, particularly from the Republican Party. While Trump may have a stronger influence, his policies still require congressional approval to be enacted, as being president is not the same as being a CEO who can make unilateral decisions. Therefore, Taiwan need not worry about the so-called “Trump selling out Taiwan” narrative, as Congress would never approve such actions. During Trump 1.0, US-Taiwan relations advanced rapidly, with Congress moving beyond non-binding resolutions to passing concrete legislation. These developments led to Taiwan becoming one of the countries with the most Trump supporters worldwide. This structure will not change under Trump 2.0.

Trump’s transactional nature means he will expect Taiwan to present its own terms for negotiation, as his goal is to strike a deal that benefits the US, rather than to destroy Taiwan or China. If the other party fails to offer a proposal, it’s easy for him to take advantage of the situation. Therefore, Taiwan must develop its own strategy to navigate this situation, formulating negotiating positions and leveraging its strengths. While Trump doesn’t value ideals in the way we’re used to, he is open to negotiations, giving Taiwan the chance to engage and bargain. In the Trump 2.0 era, this approach(?) will be crucial for Taiwan.

(Featured photo by U.S. Embassy and Consulates in Italy)