After failing to reach a trade deal with the Trump administration, Taiwan on Friday was dealt steeply escalated tariffs of 20% on most goods exported to the United States — up from 10% and notably worse than levies applied to Japan, South Korea and Europe, which obtained deals with Trump.
Of all of the countries that have seen their fates altered negatively by President Donald Trump’s second term and its budding American renaissance, Taiwan ranks near the top of the list. Its government has created a nearly perfect case study for how not to handle the post-globalist United States.
The tariff hike came on the heels of the recent humiliating cancellation of Taiwanese President Lai Ching-te’s (賴清德) visit to the United States — reportedly decided by Trump himself. Lai’s itinerary included stops in Dallas and New York as part of a “transit visit” on his way to one of the dwindling number of countries in Latin America with which Taiwan has formal diplomatic relations.
A presumed reason for the cancellation was that Trump is in full deal-making mode with China, which mistakes de facto independent Taiwan for its property. With trade deals effectively settled with the wealthy and energy-exporting Middle East, and nearing completion with Japan, South Korea and Europe, finishing the China deal would account for most of the trade that matters to America. (Canada and Mexico will inevitably be brought to heel on terms advantageous to Trump.)
Taiwan’s government privately blames this quest by Trump not just for the trip cancellation, but also for its failure to finalize a trade deal before the August 1 deadline. But that explanation is disputed by administration insiders. Trump officials say that the president would have approved Lai’s trip had he dropped New York and visited only Dallas. They also have questioned Taiwan’s trade negotiating strategy and contrasted it with those of more successful countries like Japan.
The problem is bigger than Trump’s current focus on a deal with China and an expected summit between Trump and Chinese leader Xi Jinping (習近平). The lamentable situation in which Taipei finds itself goes back years and cannot be easily reversed.
Taiwan’s bad strategy started to become obvious the very day Trump was reelected last year, when Lai failed to attempt to call Trump to offer his congratulations. Lai’s predecessor, Tsai Ing-wen (蔡英文), had done precisely that in 2016 when Trump was first elected. That Trump actually took the call made news since American leaders seldom talk to their Taiwanese counterparts given the lack of formal diplomatic relations.
Given the controversy over that 2016 discussion there was a chance Trump might decline a repeat performance to avoid angering China. But then again, maybe the ebullient victor would have taken the call, reaffirmed a new precedent that the leaders of America and Taiwan could speak directly to each other, and signaled decent relations.
Some in Taipei have said that Lai was advised by friends with ties to Trump not to attempt the call. That in itself is a problem: Such advisors gave bad advice, perhaps because they lacked real access to Trump. Lai should have had the judgment to let Trump himself decide whether or not to take a congratulatory call. Instead, Lai issued a pro forma statement through a spokesman.
This action struck some of those in Washington who follow Taiwan as remarkably different than the seeming joy Taiwanese officials expressed over the inauguration of Joe Biden as president four years earlier. Biden had been vice president for eight years during the Obama administration, which saw Chinese economic, military and technological threats to the free world mushroom amid U.S. economic and military decline and weak policy that included keeping Taiwan at an arm’s length. Biden was also a product of the decades he spent in the Senate and embodied a failed foreign policy establishment whose most indelible assumption was that China’s rise to supremacy was inevitable but would be peaceful unless the United States did something provocative like stand up for itself. As vice president, Biden took to The New York Times in 2011 to opine soothingly but ludicrously about Beijing’s parasitic economic policies: “But, I remain convinced that a successful China can make our country more prosperous, not less.”
Taiwan’s representative to Washington, Hsiao Bi-khim (蕭美琴), was permitted to attend Biden’s inauguration ceremony. She and her colleagues bragged about it as if it were a major diplomatic breakthrough. Hsiao, who described her style as “cat warrior” diplomacy, declared on video from the cheap seats at the inauguration that “freedom is our common objective.” She did so speaking through a face mask despite being outdoors — a symbol of the Taiwanese government’s unfortunate pandemic response that kept most Americans from visiting for years.
Sadly, Taiwanese diplomats professed themselves to be well positioned during the Biden administration, despite a lack of much evidence. Biden did in fact break with U.S. precedent of intentional ambiguity by saying that the United States would defend Taiwan if China attacked. However, Biden’s aides walked back each of his statements — sometimes just moments after the president left the microphone — in what we can now see was control of a dotard who was not really in charge of the administration that bore his name. Many American voters voted for Trump to put an end to what they saw as the Biden administration’s weakness toward Beijing.
Taiwanese voters elevated Hsiao to the vice presidency in 2024. Most analysts who follow Taiwan in Washington believe that Lai defers to her on policy toward the United States. This is a significant part of Taipei’s problem with Trump. Like all Taiwanese representatives in Washington since the United States terminated formal relations in 1979, Hsiao was impeded by her inability to function as a real ambassador would. But that was not the only problem: She is easily recognizable as part of the clique that hates Trump and all of his policies.
Throughout her tenure she was most at ease with what one might call the “human rights industrial complex” in Washington — the archipelago of people and organizations ranging from International Republican Institute to the National Endowment for Democracy claiming to be both Democrat and Republican, but more properly seen as part of globalist uniparty in the Washington swamp that views Trump as the biggest threat to democracy. Trump has sought to defund these globalist organizations.
In 2022, Hsiao published an opinion piece in the left-wing Washington Post effectively aligning Taiwan with the Biden administration’s decision to intervene on behalf of Ukraine, writing: “The war in Ukraine has made it clear to the world how important it is for democracies to stand shoulder to shoulder against authoritarian aggression.” This probably seemed politically safe at the time, but was a pointless risk to anyone who understood Trump’s political base, much of which viewed Biden’s intervention as an expensive and risky extension of the globalist project.
The presence of Hsiao in Washington did not make much sense during the two years that Democrats controlled the White House and both houses of Congress. Her joy toward the Biden administration alienated Republicans on whom it will always fall to deliver real help for Taiwan — especially on arms sales — and to advocate strong policy toward China generally. An unsourced claim about Hsiao by Taiwan’s president’s office saying she was “… named in international media as one of Washington, D.C.’s most influential ambassadors” is plainly ludicrous.
Today, with Republicans in control of all of Washington, led by Trump at the White House, it makes even less sense for people who think like Hsiao to guide Taiwan’s relations and represent its image. She has not condemned or alienated Trump specifically, but there is little doubt she would have preferred a second Biden term and has no political or personal avenue to relate to Trump or his top aides. Like her political faction, she is a woman of the globalist Left.
Inexplicably, her approach continues in Taipei. On July 29, Lai warmly received the head of the National Endowment for Democracy, Damon Wilson, at the Taiwanese presidential office. Trump has sought to eliminate the government-funded Endowment, which demonized him and even had a board member who likened him in writing to “Hitler, Stalin and Mussolini.” It is also party to a lawsuit titled “National Endowment for Democracy v. United States of America.” How could it possibly be wise for Lai to take this meeting and make it so public? Did Hsiao advise it?
Unfortunately, these mistakes come at a time when Taiwan’s image in the United States is poor and declining.
Far from being seen as an asset in the struggle with China, most Americans who follow foreign policy see Taiwan as a liability. Not only might Taiwan drag America into an unwanted war with China, there is little cultural affinity for Taiwan as something America must defend. Taiwan’s own government declines to position it as a capitalist bastion of freedom that will do whatever it takes to survive, instead advertising it as a computer chip factory.
Trump is famous for leaving the details of foreign policy and foreign culture to his lieutenants, but there is one thing he clearly knows about Taiwan: It sent a boxer, Lin Yu-ting (林郁婷), whom a test indicated had male chromosomes, to the last Olympics. The boxer brought home a gold medal after pummeling a woman. The Taiwanese government dispatched U.S.-made F-16 fighter jets to welcome his flight home. Trump lamented the boxer’s victory along with another one by a transgender Algerian who similarly beat up a woman.
Trump is convinced that Taiwan’s semiconductor industry purloined U.S. technology. He remarked last year, “You know, Taiwan, they stole our chip business … and they want protection.” Taiwanese organizations and Trump’s opponents in the media jumped in to “fact check” Trump’s shocking and false assertion. Except it wasn’t false, and like much of what Trump has said that is shocking, further examination proved the claim to be true, at least in part. The Department of Justice charged Taiwanese citizens in 2008 and 2018 with stealing semiconductor trade secrets. In the early 2010s, I spoke personally with a veteran of the Taiwanese chip business who sheepishly volunteered that his job in the 1990s was “reverse engineering” U.S. semiconductors — the process of inferring design and manufacturing processes from a finished product in order to steal them. (Ironically, I was then on a junket to Taiwan funded by its government, which today vociferously denies claims of theft.)
Those close to Trump also know him to pay attention to how much a government spends on defense. Is it possible that Trump knows that Lai has promised to increase Taiwanese defense spending to 3% of national output? It is more likely that he knows that Taiwan actually spends less than this amount and at one point was set to decrease military spending this year.
Taiwan’s annual defense expenditure is only about $20 billion. For comparison, often-threatened Israel, with less than half of Taiwan’s population, spends more than twice what Taiwan spends on defense. Trump and his top policy appointee at the Defense Department, Bridge Colby, have both suggested Taiwan should be spending about 10% of its gross domestic product on defense, bringing it closer to Israel’s historical norm. A debate about whether or not this is the right amount seems never to occur. From Washington’s vantage, Taipei is making claims it will increase spending modestly and then failing to meet those modest goals.
Trump officials who focus on Taiwanese politics may understand and even have some sympathy for Lai given that he faces a legislature controlled by his political opposition. But any hope that Lai could improve the situation just failed in spectacular form. Lai’s Democratic Progressive Party (DPP) attempted in July to recall 24 opposition Kuomintang (KMT) members of the legislature. The DPP failed in each case — a public rebuke unprecedented in Taiwanese political history. While DPP officials blame grassroots activists for starting the recall effort, it was advocated and managed in part by Lin Yu-chang (林右昌), the party’s since-resigned secretary general, and Ker Chien-Ming (柯建銘), the party’s legislative caucus whip.
The failure underscores a perception that Lai and his DPP are in trouble with the electorate and unable to address basic voter concerns, hoping instead that sounding hawkish on China and the opposition KMT’s dubious business ties to China and soft-on-Beijing reputation will sustain the DPP.
Absent is any real debate within the DPP about critical issues for business, such as immigration liberalization for temporary residents, overregulation of banks and insurance companies, and the cost of energy. Taiwan has extraordinary tariffs and non-tariff barriers to trade to keep out American agriculture. It also curbs investments from Chinese, even when such inbound capital flows could come with no strings attached. Taiwan failed to attract virtually any of the capital fleeing from Hong Kong after Beijing ended the rule of law there in 2020; Singapore has been the primary beneficiary.
Americans trying to live or do business in Taiwan face multiple nuisances. Despite any official ban, expats report great difficulty opening Taiwanese bank accounts without a Taiwanese spouse and even then only with significant delay and hassle. Credit is difficult to obtain for highly creditworthy Americans.
To appease environmentalists, the DPP shut down the country’s last nuclear power plant and must subsidize increasingly expensive electricity for consumers. Its government-run power company lost a tidy $13 billion last year. Some DPP officials see a silver lining to Taiwan’s newfound, nuclear-free dependence on foreign energy imports. They believe that imports of U.S.-produced natural gas will decrease much of the $74 billion trade-in-goods deficit the United States has with Taiwan. Last year, Taiwan exported $116 billion in goods from America but bought only $43 billion in return. The U.S. trade deficit with Taiwan in 2024 was America’s sixth-largest. However, gas imports will not rectify this situation substantially: What Trump officials see is a DPP-led government beholden to lefty cultural issues like denuclearization and transgenderism, indifferent to U.S. business, unserious about defense, and unwilling to close a trade deficit.
Taipei is aware of its trouble with Trump. But efforts to change the dynamic are pathetic. In May, Taiwan’s representative office in Washington hired Ballard Partners at a rate of $60,000-per-month for “strategic advocacy and government relations.” At first glance, it might seem wise to hire the Trump-friendly lobbying firm that recently employed Attorney General Pam Bondi, among many others associated with Trump. The reality is that this facile act is insulting to those who have sought to help Taiwan in Washington inside and outside of government. In effect, the DPP had a long record of playing footsie with fellow lefties among the Obama and Biden crowd and taking for granted Republican support. Then, once it realized there is an ascendant New Right in American politics that is largely indifferent to Taiwan, Taipei decided to throw a bone to some lobbyists it read somewhere are in Trump’s good graces. (Incidentally, there are rumors aplenty that Ballard has worn out at least some of its welcome among top Trump allies and appointees.)
And therein lies the true crux of Taiwan’s loss of Trump — and why the decayed state will outlast any eventual trade deal. It isn’t just diplomatic slights, inadequate defense and misleading promises, doubts about whether Taiwan will fight, the theft of U.S. intellectual property, celebrating what is in effect an Olympic gold medal in domestic abuse, indulging other woke passions, and anti-business practices. It is the failure even to seriously attempt to address any of these issues and an inability to understand and relate to the New Right in America. This deficiency cannot be rectified easily by throwing some money at a lobbying firm that may or may not be influential over Trump and inviting more irrelevant former officials to come to Taiwan to be feted and receive a sash from the president.
Trump has effectively brought down the curtain on the globalist, post-Cold War era. A new world order is taking shape — one that almost none of the foreign policy and economic experts predicted. It has many actors and moving parts around the world, but at its heart is a New Right in America that won’t win every election, but is ascendant and will be a political force with which to reckon not only for the rest of the Trump administration and any Republican successor, but for many years to come. It is with this very different environment that Taiwan must grapple — likely with its own revised form of politics yet to be revealed.
Christian Whiton was a State Department senior advisor in the second Bush and first Trump administrations. He advised the Secretary of State and other senior officials about public affairs and East Asia matters. He is a senior fellow at the Center for the National Interest and a principal at Rockies Aria LLC, a public affairs and government relations firm. He previously worked for KPMG LLP, Fidelity Investments, and Oppenheimer & Co. He is the author of “Smart Power: Between Diplomacy and War” and edits “Capitalist Notes” on Substack. He has appeared on Fox Business, Fox News, BBC, CNBC, Newsmax, NHK, Sky News Australia, and numerous other outlets. Mr. Whiton has a BA from Tulane University and an MBA from the University of California, Los Angeles.
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