Trump’s quiet change to US position on Taiwan is all about the economy
- Written by Chee Meng Tan, Assistant Professor of Business Economics, University of Nottingham
The US state department has removed a highly symbolic phrase from its routine update on Taiwan. Its previous briefings said: “We do not support Taiwan independence[1].” This disappeared on February 13 2025.
That’s not all. Donald Trump’s new government also stated on the same day that it advocated a peaceful[2] and coercion free [3] resolution to the Sino-Taiwan issue and opposes unilateral changes[4] to the status quo from either side. These may seem like small tweaks to previous US positions, but they are sending a big signal to China.
Beijing is concerned that the changes in the state department’s factsheet[5] suggest that Trump’s government may be taking a stronger tack than was expected in being prepared to defend, or throw support behind, the island of Taiwan.
The issue for China is that it sees Taiwan as a breakaway province[6], which it believes should return to Beijing’s orbit. Many Taiwanese see it as a separate state.
China hasn’t ruled out the use of force to make Taiwan part of the republic and has even sent warplanes[7] to defend the Taiwan Strait in the past week. China claims the waterway between the island and the mainland as its own[8], though this is disputed[9] under the United Nations convention on the law of the sea.
Beijing will be concerned that Washington’s updated wording on Taiwan[10] might mean that the US is less likely to stand idly by if China invades the island than it might have expected[11]. But what’s also interesting is why the US is warming up to Taiwan despite how aggrieved[12] Trump has been by how Taiwan has “stolen”[13] the semiconductor industry from the US.
Trump’s eye on business
Given Trump’s transactional[14], or business-first approach, towards politics, it is hardly surprising that Washington’s updated statement of support on Taiwan’s independence may be aimed towards enhancing US rather than Taiwanese interests.
Many in Trump’s second cabinet such as Secretary of State Marco Rubio and National Security Advisor Mike Waltz are China hawks[15] who view Beijing as a national security threat and advocate a more aggressive stance towards China. One major US concern is China’s growing influence in Asia, which challenges US influence within the region[16].
Trump announces more tariffs on China in his first weeks in office.While Washington still appears to tip its hat towards a one-China policy[17], its updated statement on Taiwanese independence suggests that the US might adopt an aggressive approach to any move by Beijing. The US’s watching brief on the China-Taiwan conflict will mean Beijing will have to think hard before taking any measures towards reclaiming the island right now.
A weakened Beijing?
China’s president, Xi Jinping, had hoped to win international hearts and minds through the Belt and Road Initiative[18], its global trade plan to build an international network of countries receiving Chinese investment. But as China’s own economy is weakened by a real estate crisis[19] that started in 2021, the aim of showing Xi’s success through economic means is not working out as hoped.
The other avenue for Xi to enhance his reputation as leader is to bring Taiwan back[20] into the Chinese fold. Since the Chinese Communist party came to power in 1949, various Chinese leaders have made reunification with Taiwan a long-term goal[21]. So, if Xi could return Taiwan to China, he could be hailed domestically as one of the greatest leaders the country has ever seen.
If China’s plan to reunify with Taiwan was already a major challenge, Washington’s altered stance on Taiwan independence and overt opposition towards coercion or the use of force makes this task even more difficult for Beijing. This could weaken Xi’s image and undermine his rule further (and may of course be part of Trump’s agenda).
Prepped for the negotiation table
The US and China had spent years in trade negotiations before US tariffs were imposed on China during Trump’s first term, culminating in the phase one deal[22] in January 2020. Trump has already announced[23] an extra 10% of tariffs on Chinese goods in his first month in office.
It is plausible that these statements on Taiwan are aimed at enhancing Washington’s bargaining power in the burgeoning China-US trade war[24].
In 2016, Trump accused China of “raping”[25] the US with unfair trade policies, and imposed tariffs of up to 25% [26] on Chinese goods coming into the US. During his 2024 presidential campaign trail, Trump went as far as to suggests that tariffs on Chinese goods could go as high as 60%[27].
Higher tariffs are bad news for China since the country relies heavily[28] on exports for economic growth, especially on high tech “new three”[29] products – electric vehicles, lithium batteries and solar panels – to recover its ailing economy.
However, if Beijing is forced to retreat from Taiwan, Xi might have to fall back heavily on the economy to maintain political legitimacy. When that happens, Beijing could be forced to offer concessions to the Americans, such as buying more US products[30], and to address how subsidies[31] are used to aid Chinese firms to the detriment of US businesses in China.
Overall, it’s likely that someone on Trump’s team has thought about all the implications of tweaking its Taiwan stance, and sees it as working out well for the US economy and, potentially, the Trump government overall. Taiwan is just a pawn in the game.
References
- ^ We do not support Taiwan independence (www.aljazeera.com)
- ^ peaceful (www.aljazeera.com)
- ^ coercion free (www.state.gov)
- ^ opposes unilateral changes (www.state.gov)
- ^ state department’s factsheet (www.bbc.com)
- ^ breakaway province (www.bbc.com)
- ^ warplanes (www.aljazeera.com)
- ^ waterway between the island and the mainland as its own (en.mofa.gov.tw)
- ^ disputed (www.aspistrategist.org.au)
- ^ updated wording on Taiwan (www.bbc.com)
- ^ it might have expected (www.brookings.edu)
- ^ aggrieved (www.cnbc.com)
- ^ “stolen” (www.cnbc.com)
- ^ transactional (www.brookings.edu)
- ^ China hawks (www.theguardian.com)
- ^ influence within the region (www.aljazeera.com)
- ^ one-China policy (www.csis.org)
- ^ Belt and Road Initiative (carnegieendowment.org)
- ^ real estate crisis (www.npr.org)
- ^ bring Taiwan back (asiasociety.org)
- ^ long-term goal (www.bbc.com)
- ^ phase one deal (foreignpolicy.com)
- ^ already announced (www.whitehouse.gov)
- ^ China-US trade war (www.bbc.co.uk)
- ^ “raping” (www.bbc.com)
- ^ 25% (taxfoundation.org)
- ^ 60% (www.bbc.com)
- ^ relies heavily (www.cnbc.com)
- ^ “new three” (www.citigroup.com)
- ^ buying more US products (www.china-briefing.com)
- ^ subsidies (www.cfr.org)
