• Biden and the newly sworn-in Taiwanese president, Lai Ching-te, continue deepening their country’s ties as Xi’s menaces escalate
• Lai Ching-te wishes to solidify its alliance with its biggest supporter, Washington
• The U.S. have a strong interest in protecting Taiwan’s de-facto independence due to its economic and realpolitik weight and is actively aiding the island’s military power

Why is there a romance between Biden and Lai Ching-te?

Answer: Diplomatic ties between Biden and Lai Ching-te are blossoming despite Beijin’s disapproval, with the new president’s party turning ever more to Washington to safeguard its security. 

On May 20th 2024, Lai Ching-te was sworn in as Taiwan’s new president. Lai Ching-te, who has served as the Vice President of the Republic of China (Taiwan) since 2019, is regarded by many as a more assertive advocate for Taiwanese independence compared to former President Tsai Ing-wen.

Lai Ching-te was elected with over 40% of the votes, a slight reduction from the party’s result in the previous round in 2020. Now, William Lai will be the leader of the third consecutive presidential term for the DPP.

President Lai Ching-te will likely continue with the DPP stance, viewing Taiwan as a de-facto independent State fighting for its survival and recognition. This is in clear contrast with Chinese intent to pursue the “One China policy” by re-integrating Taiwan, leading to increasingly hostile relations between Beijing and the party. 

This tense relationship has brought an escalation of both threats and military demonstrations by Beijing. Chinese officials have become more outspoken on their wishes for Taiwan’s future, namely complete reintegration. Moreover, large-scale military drills have been conducted both at sea and within replicas of Taiwanese strategic objectives built in China’s desert areas. Anxiety in Taipei is further heightened by a growing hard power imbalance, with Beijing investing in Antiaccess/Area-denial capabilities which would impair US military aid in case of an escalation of conflict.

Consequently, talks between Taiwan and the US have further intensified as a response to growing insecurity, as Taipei looks to secure its biggest external supporter. Washington has taken up interests in the stability of East Asia largely as a deterrence strategy towards the expansion of China’s influence. 

Recently, US officials have visited Taiwan to discuss defense aid two times, in May and February 2024. Additionally, trade and environmental protection have also been on the negotiation table, with the possibility of a free trade deal between Taipei and Washington.

Although Taiwan and the United States have no official diplomatic relationship, with Washington formally recognising Beijing as the only legitimate government, these diplomatic developments seem to point to the de-facto recognition of Taiwan as an internationally sovereign entity. 

What does Lai Ching-te want?

Answer: Lai Ching-te’s wishes to at the very least maintain de facto independence while avoiding retaliation from China

While tensions with China escalate, Taipei’s fundamental need is survival. Most Taiwanese people favour the avoidance of large-scale military retaliation above all else, including advancing their claims toward complete independence from Beijing. However, retaliation is not the only plausible reason for an escalation of violence between Taipei and Beijing; an offensive action by China is still clearly on the table regardless of Taiwan’s course of action.

In case of both an invasion of its territory or a blockade, the most likely scenario according to U.S. analysts, Taiwan needs a vast and diversified portfolio of armaments to face the Chinese military.  In both scenarios, counter-operations may be impossible without at least the suppression of Chinese short-range missiles, a major threat to the Taiwanese military and civilians.

This is becoming increasingly difficult. China’s air defense systems can effectively deny access to its territory to enemy crafts, making suppression of its aerial capabilities extremely hard, especially without extremely advanced technologies, such as stealth aircraft. The only allied power that has the capabilities to supply such advanced technologies and satisfy the quantities of armaments demanded by Taiwan is the United States.

To attempt self-defense against China, President Lai Ching-te wants to secure a military procurement agreement with Washington, such as those debated upon in the aforementioned 2024 visits. The foreign aid bill authorized by the U.S. House of Representatives in April 2024 goes exactly in this direction, with the agreement focusing on a $2bn foreign financing program allowing Taipei to purchase US defense articles, services, and training. Additional contracts have been signed for further procurement of some of US most advanced weapon systems.

To sustain these investments, Lai Ching-te wants to establish a strong economy in Taiwan. And with the U.S. being its biggest trade partner, Taipei is turning again to Washington. In particular, the semiconductor sector has become an ever-growing strategic asset for Taiwan, with the vast majority of the global production coming from the island. The industry, on which most electronic devices rely, has accounted for at least 15% of Taiwan’s GDP in recent years and has until now sustained much of the economic growth of the island. However, economic diversification is needed to reduce Taipei’s vulnerability.

The talks during the 2024 U.S. visits, including agriculture and trade as described before, therefore seem to point to an effort by Taipei to strengthen the economic ties with Washington outside of the mutual strategic interest in semiconductors and towards a larger portfolio of goods and services.

Although diversification is important, semiconductors are still key for Taiwanese deterrence. Together with a strong economy, semiconductors have the additional benefit of maintaining a strong leverage to keep the U.S. and Europe focusing on the developments in East Asia, especially in Taiwan. If dependency from Taiwan for semiconductors is to continue, intervention in defense of Taiwan becomes of national interest for Western countries, since a large sector of their economies depends on reliable trade with Taipei.

What does Biden want?

Answer: The US president wants Taipei to be able to carry out its self-defense autonomously, ensuring the safety of its critical economic and security partner without having boots on the ground.

In the polarized landscape of U.S. foreign politics, Taiwan stands out as an exception with bipartisan support for its independence, though the extent of this support may be less than what the current government deems necessary.

President Biden has expressed support for the involvement of U.S. troops in defense of Taiwan in case of a Chinese invasion. With direct involvement in Taiwanese security contests, Biden’s best course of action has been preventive support. The foreign financing program and the military procurement sponsored by Washington go exactly in this direction, with Taipei being the only receiver not currently engaged in active conflict. 

The importance of Taiwan for the U.S. is deeply rooted in economic and political power. On one hand, supporting Taiwan and newly elected president Lai Ching-te increases the stability of the American economy. Taiwan accounts for 92% of the global semiconductor production for most advanced chips, a vital industry for the tech sector, which contributed 9.3% to the U.S. GDP in 2022. Consequently, Taipei has become the U.S.’s eighth-largest trading partner.

Semiconductors have therefore become a strategic objective for most advanced economies as they are necessary for the production of almost all electronic devices. Finding a substitution for an extremely highly specialized production such as that of semiconductors is unlikely and cost-efficient. In turn, this makes the stability of Taiwanese production, and therefore of Taiwan, a strategic interest for many States, including the U.S.

Given its crucial role in the U.S. economy, maintaining a stable production of semiconductors is essential. This is why the American government aims to prevent any blockade of Taiwan. A blockade would halt exports from Taipei, severely impacting U.S. tech production and causing significant revenue losses. Moreover, it would force the industry to rely on the second-largest semiconductor producer, China, thereby increasing the U.S.’s strategic dependency on Beijing.

Lastly, supporting Taiwan is an effective way for the U.S. to secure international power by pursuing a containment policy toward the People’s Republic of China. Secretary of State Antony Blinken has described China as the biggest challenger for U.S. international leadership and defined the American strategy to curb Beijing’s expanding influence. The U.S. aim is to reduce the economic, diplomatic, military, and technological power that allows China to grow its hegemony, starting from East Asia itself.

China would immensely gain from its “reunification” with Taiwan; it would bolster its economy, which is currently facing hardship, and in turn its relative economic power towards the U.S.. Additionally, integrating Taiwan after the long-standing tensions would positively play into Chinese international credibility and rising nationalism. Lastly, Taiwan is strategically located in the region, and unchallenged access to its ports would be a significant aid to Chinese hegemony in East Asia. Hegemony over East Asia means China would have a controlling influence over roughly half of the global economy.

What is Biden doing?

Answer: Washington is strengthening its role in Taiwan, both military and economically

To show its commitment to Taiwanese de-facto independence and President Lai Ching-te, the U.S. is mainly using diplomatic tools as well as military aid.

Militarily, Washington is implementing agreements, such as the foreign financing program, and pursuing more practical steps towards a more efficient Taiwan-U.S. military partnership.
Significantly, $80 million of the foreign financing program to acquire U.S. weapons does not constitute a loan. The U.S. Congress has agreed, after the last four years of economic hardship and despite Beijing’s disapproval, to give a large sum out of their defense budget to finance Taiwanese security, a sign of unwavering support.

With the increased presence of American armaments in Taiwanese military equipment, the interoperability of the two forces increases, an added benefit in case of partnership in conflict. Logistical and direct involvement by American troops is significantly more efficient if Taiwan has an arsenal composed of U.S. weapons. Shipments of ammunition and spare parts would be simplified, and potential U.S. soldiers would require minimal additional training to incorporate into Taiwanese forces.

This has been recently put to the test during an unofficial but clear joint military exercise. Formally, a joint exercise would be a declaration of Taiwanese sovereignty, explaining why the training was portrayed as a casual encounter at sea. Practically, the exercise proved to Beijing that the two forces are capable of harmonizing their respective platforms and their soldiers, a demonstration by Washington of intent and capability to intervene on behalf of its ally.

Lastly, talks on the U.S.-Taiwan Initiative on 21st Century Trade, allowing free trade between the two countries and increased economic interconnection in a variety of sectors, including labor, is set to bolster Taipei’s economy.

The first free trade agreement, in 2023, was not approved by the U.S. Congress, which instead pushed for development only within certain sectors. The developments in the South China Sea, however, seem to have unified the American legislators’ stance on the need for a strong Taiwanese economy, allowing the mandate to negotiate on more complex matters.

What about you?

Answer: Taiwan’s fate will alter power dynamics in the region and pose significant global challenges for the transition to a digital and green economy.

China’s increasingly menacing attitude towards Taiwan since President Lai Ching-te’s election is a sign of a shift in the status quo of East Asia. In the last twenty years, stability and common growth have shaped East Asia, and as soon as China’s “peaceful rise” was seen as lacking, deterrence was put in place. But now China is testing the limits put into place by the U.S. and the international order and is increasingly becoming less susceptible to repercussions. The situation in Taiwan appears to be the start of a crisis of deterrence.

Furthermore, if deterrence was to fail in Taiwan, ripple effects may be felt throughout the region. Fear of aggression coupled with China being evermore a military regional hegemon may lead to an arms race, which may worsen insecurity and hinder growth.

Countries such as South Korea, the Philippines and Japan have shown concerns about an escalation, mainly due to their proximity to Taiwan and the presence of U.S. bases in their territories. In fact, in case of a Chinese overstep of the status quo, U.S. bases in the region would likely become a strategic objective to diminish Beijing’s vulnerability to missile attacks, a key component of U.S. deterrence strategy.