Background
Ever since the defeat and exile to Taiwan of the Chinese Nationalist Party (KMT) by the Chinese Communist Party (CCP) in 1949, the cross-strait situation between the PRC and ROC government in exile has been marred by tension and multiple crises. Even after their expulsion from the Chinese mainland, conflict between the two sides has continued: there were two exchanges of artillery fire while contesting outlying ROC islands in 1954-55, again in 1958, and PRC missile tests over the strait in 1996 [1].
Furthermore, from 1950 until the early 1970s, the US Navy maintained a heavy presence in the Taiwan Strait with the Taiwan Patrol Force, to deter both PRC and ROC military action against the other [2].
The cross-strait situation’s most notable turning point came in 1979, when the US switched diplomatic recognition from Taipei to Beijing, while simultaneously withdrawing from the US-ROC Mutual Defense Treaty in early 1980 [3]. While this treaty was quickly replaced by the Taiwan Relations Act the same year, the downgrading of the US-Taiwan alliance strongly reverberated on both sides of the strait.
Nevertheless, the Taiwan Relations act stipulates that the US shall both provide arms and maintain its own capacity to intervene if necessary [4]. The US remains strongly invested in Taiwanese security to this day.
Taiwan rapidly and unexpectedly democratized in the 1990s, which stoked fears among PRC leaders of a renegade Taiwanese independence movement. Nevertheless, the still-ruling KMT wished to maintain the status quo and keep open the door to reunification, soothing tensions slightly.
However, the tenuous relationship took a turn for the worse when the Democratic Progressive Party (DPP) took power for the first time in 2000, and doubly so when they were given a three-term mandate starting in 2016. The PRC has become increasingly assertive over Taiwan in political, military, and economic spheres, whether through indirect coercion or direct military aggression in Taiwanese territorial waters and airspace. This has continued to escalate to the point that the current conflict is already being called a “fourth” Taiwan Strait Crisis.
US Interests
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Free and open trade relations with both Taiwan and PRC
Despite rising tensions, the US and PRC remain each other’s largest trading partners, and both countries would suffer immensely should any attempt at full decoupling be made. At the same time, the US will continue relying on Taiwanese semiconductors for the foreseeable future, even if “nearshoring” attempts are made.
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A peaceful Taiwan Strait
The Taiwan strait is a key artery for global shipping [5], and it is in the US’ best interest to ensure that the strait remains peaceful and open to commerce. Furthermore, the US wishes to avoid getting involved in an active conflict with the PRC if at all possible.
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Taiwan’s continued existence as an economic, military, and political entity separate from PRC
While the US wishes to avoid war with the PRC, it also remains invested in the continued existence of Taiwan as a separate military, economic, and political entity. Taiwan not only hold immense geographical, economic, and strategic value, but is also a staunch democratic partner in the region, and proof that liberalism and democracy are compatible with traditional Chinese values [6].
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China remains behind Western semiconductor industry
15% of US GDP is derived from semiconductors or products containing them [7], and the cutting-edge emerging weaponry and technology depends on a stable supply of the most advanced chips [8]. It is therefore a key US interest to remain well ahead of the PRC in this area for both commercial and military purposes.
Assumptions
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China seeks reunification with Taiwan, preferring peaceful means, but will use force
The PRC has long maintained its claim over Taiwan, and continues to advocate for Taiwan’s peaceful reunification with the mainland. Still, should peaceful measures fail, the PRC has also consistently said that they “will not renounce the use of force” for reunification [9]. This position is unshakeable for the CCP, and will not change barring major political upheaval domestically.
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Taiwan will not seek reunification with China
Recent surveys show that an overwhelming amount of Taiwanese wish to maintain the status quo, and nearly half hope to one day achieve independence [10]. Furthermore, as the last generation of citizens who fled the mainland in 1949 pass away, political views continue skewing away from reunification, as a unique Taiwanese national identity matures.
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Taiwan will move closer to US under DPP rule, and closer to PRC under KMT rule
The KMT traces its roots back to the founding of the ROC on the mainland in 1911 and has maintained eventual reunification (though not on PRC’s terms) as a key part of its platform. As a result, the PRC favors KMT administrations, and cross-strait relations generally improve.
In contrast, the DPP maintains that the ROC is already an independent country and is fully opposed to any reunification with the mainland [11]. The DPP is incredibly friendly towards Washington and seeks every opportunity for military or political collaboration [12].
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US will in near term be unable to create semiconductor supply chain without Taiwan
Despite “friend-shoring” and “near-shoring” attempts, the US semiconductor supply chain remains inexorably linked with Taiwan, and it would be nearly impossible for the US to restructure its supply chain without Taiwan in the near future [13].
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Chinese semiconductor industry will fail to rival advanced level of Taiwan’s
The PRC’s chipmaking capabilities have greatly improved over the past several years, with advanced 7nm chips being produced domestically for the first time in 2023 [14]. While impressive, this is still 3 generations behind the latest Taiwanese chips.
However, even here the PRC is struggling to maintain its foothold, and tends to focus on mature, >28nm process chips. Therefore, the PRC will be unable to catch up to and overtake Taiwan without warfare or coercion.
Goals
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Taiwan maintains de facto independence from China
Maintaining the status quo of de facto Taiwanese independence is critical to US strategic and economic regional interests. Only when Taiwan is not subject to the PRC in any way is it able to provide the advanced chips the US needs and serve as a strategic bastion and US military partner.
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PRC reduces military assertiveness towards Taiwan
Reduced military tension serves US interests for a peaceful Taiwan strait, while also ensuring Taiwan does not succumb to invasion. Under the current status quo, if the PRC were to reduce military assertiveness, Taiwan would respond amicably on both military and economic fronts, leaving this goal as the single most fruitful path to achieving all US interests.
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Trade continues with Taiwan and PRC
While the US absolutely depends on trade with Taiwan, the same can also be said of China. The US does not want to sever economic ties with either party, and should prioritize options which don’t jeopardize free trade with either side.
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US secures advanced semiconductor supply chain
Whether by shifting its supply chain from Taiwan or strengthening strategic ties, the US must always prioritize its advanced semiconductor supply chain. The US (and global) economy depends on reliable American access to the most advanced chips.
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Taiwan gains member status in international organizations (e.g. WHO)
Short of full diplomatic recognition, giving Taiwan membership in international bodies and organizations is a significant soft-power victory for the island, and would go a long way towards legitimizing Taiwan’s existence as a separate entity from the PRC [15].
Options
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Aggressive Approach: As the PRC continues to increase its military and economic coercion towards Taiwan and those who support it, one possible approach is for the US to meet force with force, and respond to aggressive PRC maneuvers with a forward, aggressive strategy of its own.
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Political
- US invalidates its One China Policy; still doesn’t recognize Taiwan
- US Secretary of State visits Taiwan
- POTUS invites President Lai to White House
- US formally commits to defense of Taiwan; drops strategic ambiguity [16]
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Military
- US stations military forces on Taiwanese main island
- USAF and Navy conduct joint military exercises with Taiwan
- US military fully provides for Taiwan’s “porcupine” defense strategy
- $19B backlog of Taiwanese military orders is reoriented towards this strategy; is fulfilled ASAP
- US forms mutual defense alliance including Taiwan and regional allies
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Economic
- US reaches free trade agreement with Taiwan
- US greatly increases spending on “friend-shoring” of Taiwanese semiconductor firms while remaining invested in TSMC
- US tightens technology sanctions on PRC, effectively cutting them off from all Western/Taiwanese semiconductors
Evaluation:
Advantages: This “gloves off” approach signals intense American resolve and commitment to the defense and continued existence of a quasi-independent Taiwan. US interests of maintaining a separate Taiwan and securing semiconductor supply chains are both served by this option. Following Chinese actions in the South China Sea, Kashmir, and now the Taiwan Strait, it is clear the current approach is lacking. Perhaps the US greatly increasing its own assertiveness meeting force with force will change the PRC’s strategic calculations in our favor.
Disadvantages: American interests of continued free trade with the PRC and a peaceful Taiwan Strait are not necessarily well-served by this option. The PRC has a long history of responding to being “wronged” politically and militarily by imposing tough economic tariffs on offending countries and increasing military activity of their own. Take for example the fierce response after an unofficial visit to Taiwan by then-House Speaker Pelosi [17]. Furthermore, brinkmanship greatly increases the chance of war breaking out between the PRC and Taiwan, and the US would be formally committed to Taiwan’s defense if this occurred. War could very easily end with the US losing all its interests in the region, not to mention the huge potential for mass casualties.
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Political
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Status Quo: While the current cross-straits situation is tense, there is still room for moderation and agreement, and US goals can still be achieved without major policy changes.
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Political
- US reasserts that it does not support Taiwanese independence
- US employs para-diplomatic confidence-building measures with Taiwanese people, such as person to person exchanges and unofficial congressional visits to the island
- US reassures PRC of One China Policy, but does not comment on Shanghai Communiqué or 1992 consensus
- US walks back Biden quotes on defense of Taiwan; upholds strategic ambiguity
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Military
- US continues FONOPS around PRC SCS holdings and Taiwan Strait
- $19B Taiwanese defense backlog is fulfilled quickly
- US continues strengthening “first island chain” allies’ military cohesion and prowess through procurement and joint exercises
- US rewards Taiwanese military reforms with defense outlays and demonstrations of resolve by US military
- This helps to assuage Taiwanese fears that indigenous defense initiatives don’t matter, and that US will indeed come to their aid
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Economic
- US tightens current sanctions against PRC, but does not add new ones
- Trade agreements with Taiwan are strengthened, while non-critical sanctions against PRC are dropped or lowered
Evaluation:
Advantages: The status quo has functioned well for the US since 1979, and there is no reason to rock the boat with any bellicose or unnecessary moves. Although China has become far more assertive around it can be argued that this is because they know they have no effective way to force reunification. The Cold War was won through US tenacity, tact, and patience, and this conflict does not need to be any different. The US currently has a robust and reliable military presence in the region, including military advisers in Taiwan. Furthermore, China currently has no deep incentive to risk war over Taiwan unless they fear total independence and the lack of a future possibility to reunify. Closing this option by committing to Taiwan more fully could force a war no one wants. There is room to be both strong and accommodating with the status quo. The US is not seen as overly weak for maintaining it and can adequately maintain its interests without risking war.
Disadvantages: The biggest disadvantage of maintain the status quo that it leaves the door open for misunderstanding and strategic miscalculation. Just as the status quo affords the US significant wiggle room, the same can be applied to the PRC. ‘Gray zone’ warfare has been rapidly increasing in the SCS and Taiwan strait [18], which can cause and real and lasting impact without fully breaking the status quo. Additionally, the status quo unsettles the ruling DPP government, as they lack the ability to meaningfully participate in international forums and can never fully know if the US will support them or not. If the US wants to continue upholding the liberal order, leaving their democratic partner in limbo is a significant liability. Lastly, it will be more difficult to strengthen US semiconductor supply chains–––especially when it comes to nearshoring–––with a Taiwan hesitant to give up their best cards to an unreliable partner.
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Political
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Moderate Approach: Reaching greater consensus with the PRC on several core issues will greatly cool off regional tensions, without overly sacrificing US strategic and political interests.
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Political
- US denies entry and transit visas to currently serving Taiwanese politicians and military members
- US reiterates commitment to One China Policy, Shanghai Communiqué and 1992 Consensus
- Xi Jinping is invited to White House
- President Biden visits Beijing
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Military
- US does not prioritize Taiwanese military backlog
- American military advisors are called back from Taiwan
- US focuses on dialogue with PLA
- Taiwan is not included in regional military exercises and discussions amongst US allies
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Economic
- PRC technology sanctions are reduced where possible, though sanctions on most advanced chips remain
- US halts all “friend shoring” efforts as a signal of trust in cross-straits stability, and in supply chain solidarity with Taiwan
- Trump-era sanctions on non-dual-use technology are dropped or lowered
Evaluation:
Advantages: This option has the distinct advantage of being the only option which reduces PRC anger across the board. US interests in peace and free trade would be massively boosted, and an invasion of Taiwan would not necessarily become more likely. While the US and PRC would continue to harbor many disagreements, this option would pull both sides back from the brink of war and allow dialogue, acknowledgment, and understanding to prevail. The US would not need to abrogate the Taiwan Relations Act, and could continue providing for the island’s defense, albeit in a comparatively hands-off way.
Disadvantages: This option runs the risk of being interpreted as weakness not only by the PRC, but also by American peers and allies across the globe. While cooling tensions and improving relations with the PRC could potentially lead to long-term peace in the Taiwan Strait, it is equally if not more possible that the PRC uses American actions to their advantage, doubling down on SCS and Taiwanese territorial claims, and acquiring advanced semiconductors for their military. Furthermore, this option effectively leaves Taiwan out in the cold, which sends a terrible message to global allies and partners, while also risking US semiconductor supply chains. China has already proven it will exploit an ambiguous situation to its advantage in Hong Kong and in the SCS, and the US should be very careful about lowering its guard.
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Political
Recommendations
Based on the above options and evaluations, I would suggest option one (1). The current status quo worked well until President Xi took power in 2013, after which it has continuously been taken advantage of by the PRC.
Critically, even this most aggressive option does not advocate for recognizing Taiwan as an independent country. Leaving the door open to reunification, even slightly, should be enough to assuage Chinese fears that reunification is ‘now or never’. Moreover, this option also does not call for full economic decoupling with China, as some pundits and scholars advocate. While it would certainly be a tough pill to swallow for the PRC, it would remain preferable to open warfare.
Dropping strategic ambiguity and building military support for Taiwan would also all but eliminate chances of PRC miscalculation. If China’s military calculus changed, and war was chosen, the US, Taiwan, and Indo-Pacific would be better prepared to respond, compared to the tenuous posture at present. US semiconductor supply chains–––both at home and abroad–––would also be greatly strengthened, and certainly ahead of the PRC’s capabilities.
Lastly, option one will send a signal of American resolve to preserve the Liberal order to the entire world and build trust in American commitments and actions with all our friends and partners, though none more so than Taiwan.
In sum, option one rectifies the weakness and failures of the current status quo, without fully constraining PRC ambitions to the point of open war.