Trump and Taiwan: A New US Policy?

No doubt, the foreign ministries of the world are trawling through old episodes of The Apprentice to get the measure of President-elect Donald Trump. Newspaper reports suggest that US-based Asian diplomats in particular do not know who to turn to in Washington to find political advisers who are able to guide them prior to meetings with Trump. So, here is a preliminary guide.

In general, it is worth recalling that Trump’s tale is not that of the regular presidential candidate who shifts to the centre after winning the party nomination, and then rules from the centre. Trump has his own convictions, and he is going to be guided by them, subject to any tussle with a relatively unaligned Congress. 

The key relationship is with China: alleged trade dumping, the artificial weakening of the yuan – the Chinese currency – and unfair trade practices can be expected to elicit harsh responses from a Trumpian Washington.

However, adversarial positions are also likely to deepen, particular across the Taiwan Straits, if only because the new administration will see Taipei as a much more reliable Asian ally than, for instance, the Philippines. China is unlikely to provoke the new president on this score, if only because Beijing cannot calculate how a Trump administration is likely to react. 

Instead, looming tensions between China and the US will likely give greater impetus to the need to internationalise the yuan, and in doing so expand China’s sphere of influence in Central Asia, where Beijing is pushing on an open door.

China’s One Belt, One Road initiative, touted as the framework for a multitude of financial, trade and infrastructure projects stretching through Central Asia all the way to Europe, is 30 times bigger than the US Marshall Plan. It is also eight times bigger than China’s own 2009 stimulus package, which was considered at that time to be the biggest of its kind.

The Taiwan position is pivotal to this US–China relationship, and requires some context to appreciate what is likely to be the new administration’s attitude.

In 1979, the then President Jimmy Carter established diplomatic relations with the People’s Republic of China (PRC) and ended formal diplomatic ties with the Republic of China on Taiwan. Three months later, the Taiwan Relations Act was enacted, laying out the nature and legal status of US–Taiwan cultural and commercial relations, as well as providing for arms sales and for the maintenance of Taipei’s capacity to resist any resort to force or coercion from the PRC. Since then, the US’s stance has always been that the future of Taiwan could only be determined by peaceful means.

But although this framework of relations has remained the same, events have now changed the equation between Beijing and Washington beyond recognition.

The return of Hong Kong to Chinese sovereignty in 1997 provided one potential model for resolution of the Taiwan problem under the ‘one country, two systems’ model. However, this model has been increasingly discredited as a model for Taiwan.

This is due partly because of the rise of Taiwanese democracy, which made it impossible to ignore the wishes of the people of Taiwan about their potential future, and partly by China’s own ham-fisted attitude to Hong Kong, which makes the former colony’s model of coexistence with Beijing increasingly sui generis and inapplicable to any other environment.

Relations between the PRC and Taiwan also see-sawed. The peak was  the so-called 1992 Consensus in which representatives of Beijing and Taipei agreed that there was only one China but two interpretations as to what this means. Relations reached a nadir with the Straits Crisis of 1996, when US President Bill Clinton dispatched two aircraft carrier groups to the region to prevent a flare-up.

But as far as the shifting attitudes of US presidents towards Taiwan are concerned, the most relevant detail to help us understand today is the elaboration of the Reagan Administration’s 1982 Six Reassurances to Taiwan:

1. A promise that there would be no end-date for US arms sales to Taiwan, in effect rebuffing Chinese hopes that the island-state would be abandoned.
2. A pledge that the US would not act as a mediator between Taipei and Beijing.
3. Promise that the US would neither encourage nor coerce Taiwan into negotiating with the PRC.
4. Reassurance that there would not be a change in the question of sovereignty over Taiwan.
5. No plans to seek a revision of the Taiwan Relations Act.
6. A pledge that the US would not seek Beijing’s prior approval for any weapons sales to Taiwan.

The person who advised President Ronald Reagan on those issues at that time was Ed Feulner, who is credited with building the Heritage Foundation from a small, struggling policy think tank in the 1970s to the influential behemoth it became during the Reagan presidency and beyond. Feulner retired as Heritage president in 2013, when former US Senator Jim DeMint, a South Carolina Republican, took the reins of the organisation.

But Feulner’s experience as a Taiwan intermediary remains valuable, and was probably instrumental in securing him a place on the Trump transition team, which he joined in August. In fact, Feulner became the first conservative Republican of stature outside Trump’s coterie to join the transition team.

There is no question that Feulner is now guiding Trump’s Taiwan policy. For within weeks after his appointment on the presidential transition team, Feulner met Tsai at the Presidential Palace in Taipei. And, according to Taiwan’s official Central News Agency, Feulner also played a ‘crucial’ role that led to the call between Trump and Taiwan’s leader.

The Taiwanese are certainly making no secret about their new friends in the incoming administration. A press release from Taiwan’s presidential administration said that Tsai called Feulner a ‘long-time friend to Taiwan’ and conveyed her gratitude to his Heritage Foundation for its support to the island-state.

For the moment, Beijing has been restrained in responding to this development. Chinese Foreign Minister Wang Yi preferred to blame the entire episode on ‘just a small trick by Taiwan’, adding that he thought it would not change longstanding US policy toward China.

And the Obama White House also rushed to assert that there was ‘no change’ in Washington’s attitude on the Taiwan question, a strictly correct assertion. However, this is not a very profound one, since this official interpretation applies only until Trump’s inauguration on 20 January.

For the reality is stark: the new administration seems prepared to support a pro-independence Taiwan president, and may be willing to experiment with new policies towards the region.

Timothy Voake is principal with The Risk Officer’s Number, a consultancy specialising in political risk.