Home / Articles / The Taiwan Relations Act at 40: Reaching a New Optimal Equilibrium in U.S.-Taiwan Policy
The Taiwan Relations Act (TRA)—passed by the U.S. Congress in 1979—has provided an enduring framework for U.S.-Taiwan relations. This remarkable legislation mandated special American obligations and commitments to Taiwan that have helped to preserve peace and stability in the Taiwan Strait for the past 40 years. It is also the only legal underpinning of U.S. policy toward Taiwan. Yet, much as strategic changes necessitated adjustments in U.S. policy during the Cold War, fundamental changes in the circumstances of the 21st century, as former Deputy Secretary of State Richard Armitage said at a Global Taiwan Institute and Project 2049 Institute forum, require, at the very least, a “rethink” of the U.S. approach to Taiwan policy and cross-Strait relations.
To be sure, the U.S.-Taiwan relationship is stronger now than it has ever been since 1979, so “if it ain’t broke, don’t fix it,” right? Wrong. Even though it is not broken, Taiwan policy needs to be recalibrated. While the U.S.-Taiwan relationship is heading in the right direction, the U.S. should start thinking about a destination. Perhaps most importantly, the U.S. needs to shift from a reactive to an affirmative policy to Taiwan.
Recalibrating the Trilateral Relationship
U.S. policy towards Taiwan does not exist in a vacuum. Relations between Washington and Beijing over the last 40 years have had a disproportionate influence in how the United States conducted (and conducts) its informal relations with Taiwan. The current framework for the trilateral relationship between Washington, Taipei, and Beijing, which includes the TRA, Six Assurances, Three Communiqués, and the U.S. “One China” policy, requires recalibration.
While a U.S. and Taiwan policy of maintaining the status quo has helped to maintain peace in the Taiwan Strait and remains the best near-term option, it is unsustainable in the long term because China is unceasingly and aggressively seeking to change the status quo through military and non-military means. The massive military buildup across the Taiwan Strait by the People’s Liberation Army (PLA), the Chinese leadership’s continued refusal to renounce the use of force against Taiwan, and the Chinese Communist Party’s (CCP) non-military coercive pressure are destabilizing the Strait and are threatening the peace and security of the Indo-Pacific area.
While the United States has managed to deter Beijing militarily from taking destructive military action against Taiwan over the last four decades, because Beijing has been relatively weak, the risks of the U.S. approach inch dangerously close to outweighing its benefits as the PLA rapidly modernizes. Meanwhile, the CCP is intensifying its political infiltration and subversion activities through United Front and other active measures-like campaigns to affect the social and economic systems of Taiwan. As the PLA grows stronger, a perceived lack of commitment that the U.S. will intervene in defense of Taiwan, which is shared in Taiwan and other countries in the region, could weaken morale in Taiwan and further embolden Beijing to use force to resolve the Taiwan issue. Public perceptions and misperceptions toward arms sales and economic ties, as well as the continuation of the U.S. policy of strategic ambiguity have fueled such attitudes. However, this perceived lack of commitment is unfounded as the U.S. has repeatedly shown, through legislation, arms sales, Global Cooperation and Training Framework (GCTF) initiatives, the free and open Indo-Pacific strategy, and many other projects and activities, that it values Taiwan’s freedom and democracy.
If Washington and Taipei continue their reactive approach toward Beijing’s unilateral challenges to the status quo, it can lead to greater instability in the Taiwan Strait. Greater clarity of U.S. commitments to defend Taiwan, coupled with demonstrative commitments by Taiwan to its own self-defense, is critical for purposes of deterrence and stability.
A Policy of Soft Balancing
U.S. policy towards Taiwan over the past 40 years has operated on the premise that America’s primary interest is in the process—as opposed to the outcome—of resolving differences between the two sides of the Taiwan Strait. There is wide latitude for policymakers within the United States and Taiwan to work within the existing legal and policy framework, but a necessary foundation to ensure the sustainability of peace over time is an affirmative policy of soft balancing by the United States.
By design, U.S. policy was inherently reactive and intentionally ceded the initiative of shaping the ultimate outcome to the two other parties. It was an approach that some senior U.S. policymakers, at the time that the policy was conceived in the 1970s, expected would create a fait accompli, and one that would provide Washington with the flexibility to respond to broader geopolitical challenges of the Cold War with the Soviet Union while maintaining stability in the Strait.
Despite some expectations to the contrary, Taiwan thrived in the ensuing four decades. The government liberalized from the top down while an active civil society fervently pushed for political reforms from the bottom up. Taiwan evolved from an authoritarian regime to a vibrant democracy. As a consequence, support for Taiwan and its democracy grew within the United States as well.
Yet, the growing power disparity between Taipei and Beijing and a protracted practice of undue deference by Washington to Beijing’s sensitivities has gradually eroded some of the original commitments made under the TRA and President Ronald Reagan’s Six Assurances. These Assurances include, perhaps most importantly, maintaining the U.S. position of not taking a position on the issue of sovereignty over Taiwan, no prior consultation with Beijing on arms sales to Taiwan, and no attempt to pressure Taiwan to enter into negotiations with the PRC, among other measures.
As the power disparity between Taiwan and China widens, a U.S. policy based purely on ensuring a peaceful process is and will increasingly be under strain, leaving Taiwan more susceptible to coercion and Beijing more emboldened to pressure Taiwan, and increasing the risk of military conflict.
The PRC’s coercive pressure campaign is aimed at gradually and unceasingly pushing for its own desired outcome: ending the sovereignty of a democratically elected government and the freedom of its 23 million people by unifying Taiwan into the PRC. All the while, the current approach may be inadvertently drawing the United States towards China’s preferred objectives, at the expense of its own values and strategic interests.
Indeed, some American scholars and former policymakers have floated the alarming idea that the U.S. needs to accommodate China by reaching a new modus vivendi with Beijing—which would have the U.S. effectively abandon Taiwan. This flawed view is based on a tendency to construct events in the Taiwan Strait in binary terms—either independence or unification—and for Beijing, the only option is unification, even if it means going to war. But U.S. policy should not accept the assertion that cross-Strait relations pose such a Hobson’s choice.
An Affirmative Vision
Despite Washington’s and Taipei’s pragmatic approach, Beijing’s approach is becoming more coercive, unilateral, and increasingly detrimental to U.S. interests.
The U.S. needs to adopt a more affirmative Taiwan policy that not only insists on a peaceful process, but also provides an alternative substantive vision that, at the very least, reflects the objective reality that two legitimate, mutually non-subordinate political entities coexist across the Taiwan Strait.
This would entail a significant, but marginal, change in U.S. policy, and a great deal of uncertainty comes with any change. But the alternatives to such change present equally destabilizing propositions, and fear of even thinking about change could lead to a state of paralysis, which would be seriously disruptive in the Taiwan Strait.
Despite Beijing’s efforts to undermine the status quo and achieve the political subordination of Taiwan under its “One China Principle,” Washington has managed to foster robust U.S.-Taiwan relations. Notwithstanding its past successes, the current policy framework has not kept pace with fundamental changes that have taken place in Taiwan, and Beijing’s increasing belligerence towards Taiwan and may not be sustainable. A representation that is more in tune with the reality on the ground in Taiwan—which takes into account its transition from authoritarian regime to democracy—and in China—which takes into account its authoritarianism that has become more aggressive domestically and abroad—would allow for a recalibration of the U.S.-Taiwan relationship that would be more conducive to long-term U.S. interests in the region, and more accurately reflect American principles and values. Towards that end, the governments in Washington and Taipei should consider promoting the following:
(1) Normal, Stable, and Constructive Relations: The United States should deepen and broaden its engagement with Taiwan and consider ways to move toward a more normal relationship over the longer term. Taiwan is a great democratic success story, a thriving economy, and a global leader in health and science. It stands to contribute greatly as a good citizen of the world. The U.S. should seek to promote opportunities for Taiwan to participate meaningfully in international organizations, and resist pressure to isolate Taiwan from participating in the cooperative work among nations in international organizations.
(2) High-level Exchanges: U.S. officials at the highest levels should engage counterparts in Taiwan on a regular basis in accordance with the Taiwan Travel Act. President Donald Trump and President Tsai Ing-wen should seek the opportunity to meet each other in person. This will invariably cause friction between Washington and Beijing, but treating democratic leaders with dignity and respect is key to a broader strategy. Cabinet-level officials should regularly visit their counterparts in Taiwan to discuss national, departmental, and technical issues of shared interest. Hindering high-level contacts encourages misunderstandings and policy mistakes, especially in times of crisis. The current level and pace of interactions is inadequate for managing the complexities of a relationship that encompasses issues ranging from trade to science and technology, and from environmental protection to defense and security affairs.
(3) Bilateral Trade Agreement: The United States government should negotiate a free trade agreement with Taiwan, with similar or even better terms than the ones it already has with South Korea, Singapore, and Australia. Taiwan is an island nation, heavily dependent upon trade to sustain itself as an economic powerhouse, and it is vulnerable to increasing Chinese economic coercion, especially since just in 2018, 41% of Taiwan’s merchandise exports were to mainland China and Hong Kong, according to data released by the Congressional Research Service. This effort will likely occur over the long term, but it could have important payoffs for American statecraft by integrating trade into the calculation of a comprehensive strategy for great power competition. The U.S. would benefit both economically and strategically from a closer trade relationship with Taiwan.
(4) Routinize Arms Sales: The United States, as stipulated under the TRA and reinforced by the recently proposed Taiwan Assurance Act of 2019, “conducts regular transfers of defense articles to Taiwan in order to enhance its self-defense capabilities.” Just in September 2018, the U.S. State Department approved a $330 million military sale to Taiwan. However, regardless of past and recent practices of arm sales to Taiwan, the United States should routinize the arms sale process for addressing Taiwan’s requests for defense articles and services; provide a timely response to requests as well as commercial export licenses; and base arms sales decisions on Taiwan’s strategic and operational requirements, which are inherently defensive in nature and serve U.S. interests. In keeping with the terms of the Reagan’s Six Assurances, Beijing should not be consulted in advance of arms sales to Taiwan.
(5) People-to-People Exchange: The U.S. State Department should launch a new initiative to enhance people-to-people exchanges with Taiwan, especially in the areas of education and culture. The United States government should support the development of more nonprofit educational organizations that encourage mutual understanding among citizens of the two nations.
Adjusting the U.S. approach toward its Taiwan policy and cross-Strait relations to ensure that the TRA-created framework is able to manage the current and future challenges ahead demands a new approach that fundamentally extends greater legitimacy to democratic Taiwan politically, economically, and militarily. Sustained and high-level discussion is needed now more than ever before between the United States and Taiwan to determine a new optimal equilibrium that best reflects the objective reality in the Strait.
 It is important to also note that just in the past two years a number of bills to further support and strengthen the U.S.-Taiwan relationship were introduced in Congress, and some signed into law. These bills are: the Taiwan Travel Act, which was signed into law by President Trump on March 16, 2018; the Asia Reassurance Initiative Act which was signed by President Trump in December 2018; and the Taiwan Assurance Act introduced in Congress in March of this year.
 Passed in 1982, during a House and Senate testimony, then-Assistant Secretary of State for East Asian and Pacific Affairs John H. Holdridge stated on behalf of the Executive Branch (President Reagan) that—
“(1) [W]e did not agree to set a date certain for ending arms sales to Taiwan; (2) [W]e see no mediation role for the United States between Taiwan and the PRC; (3) [N]or will we attempt to exert pressure on Taiwan to enter into negotiations with the PRC; (4) [T]here has been no change in our longstanding position on the issue of sovereignty over Taiwan; (5) We have no plans to seek revisions to the Taiwan Relations Act; and (6) The August 17 Communiqué should not be read to imply that we have agreed to engage in prior consultations with Beijing on arms sales to Taiwan.” From: 114th Congress (2015-2016) “H.Con.Res.88 – Reaffirming the Taiwan Relations Act and the Six Assurances as cornerstones of United States-Taiwan relations,” https://www.congress.gov/bill/114th-congress/house-concurrent-resolution/88/text.