East Asian Overview
In large part because all previous US presidents have insisted on Washington’s control of our East Asian and Pacific allies’ foreign and defense policies, the United States is now dangerously overstretched in the region. Washington demands that regional allies and partners for which we have assumed defense commitments (Japan, South Korea, Taiwan, and the Philippines) subordinate their judgments of defense needs to Washington’s perception of the need to accommodate China. The understandable reaction in Tokyo, Seoul, Taipei and Manila has been to shrug their collective shoulders and say, “if you pay for it and promise to defend us, do what you want.”
By the end of 2016, the unfortunate results are a surprise to no one: 1) both Japan and South Korea are threatened by a nuclear-armed, Chinese-backed North Korea with an alarmingly advanced ICBM and sea-launched missile capability; 2) Taiwan is denied advanced fighter aircraft, submarines and adequate missile defenses, and the Taiwan Strait faces the gravest military imbalance since World War II; 3) The Philippines endures ever-expanding Chinese military and naval power inside their own legally-defined seas.
Fearing some reemergence of a new cold war with Beijing, Washington has not trusted its allies to address these Beijing-endorsed challengers. Beijing, by contrast, is perfectly comfortable letting its client states engage in dangerous provocations of America’s partners. Meanwhile, America’s friends and allies in the region find themselves unable to defend their interests by themselves, nor are they confident that a cash-strapped United States can maintain the capacity to help them defend themselves.
As of today, America, alone and by itself, no longer has either the defense budget or the manufacturing/industrial resources to withstand determined challenges to our allies’ interests, and soon our own interests in the Asia-Pacific region will be indefensible.
In contrast, China’s relentless quest in the 21st Century to re-attain an ancient strategic preeminence in Asia that it lost nearly 600 years ago has become the driving force in Beijing’s new nationalism, a nationalism with which the Chinese Communist Party (CCP) seeks popular legitimacy. Beijing sees the United States as its primary adversary despite four decades of America’s crucial economic friendship and two decades of strategic partnership with America against the Soviet Union, once the greatest threat to China’s existence.
America’s Interest in Taiwan’s Survival
As Peter Navarro pointed out in his July 2016 essay on Taiwan, Taiwan is not only an economic powerhouse in East Asia with a population larger than Australia, but it is also a global advanced technology hub, geographically situated on major maritime transportation routes that are of vital importance to the United States and all its Asian allies and partners. Taiwan’s military and coast guard occupy two of the largest islands in the South China Sea (Pratas and Itu Aba), making Taiwan the key regional player protecting freedom of navigation from Chinese encroachment. Navarro also underscored Taiwan’s geographic weight in managing China’s surface naval and submarine expansion into the Western Pacific.
Just last month at a conference on US-Taiwan defense industry issues, no less an authority on the topic, acting US Deputy Assistant Secretary of Defense David Helvey disclosed the surprising and little-known fact that “Taiwan is the United States’ largest security cooperation partner in Asia. Since 2010, we have notified Congress of more than $14 billion in arms sales (emphasis added).”
You should note that, because Taiwan is a wealthy nation, US security assistance is strictly cash-and-carry; and because no other nation will sell weapons to Taiwan, the United States is their sole source of defense articles and services.
At the conference, Mr. Helvey went on to elaborate a broad spectrum of US security and defense cooperation measures with Taiwan, the full extent of which is not appropriate for this unclassified memorandum. That cooperation includes, among other things, intelligence sharing, cyber espionage countermeasures, maritime and airspace surveillance, and telecommunications.
Core Policies toward Taiwan
I agree with Peter Navarro’s July assessment that US policies toward Taiwan in the coming year must not be “needlessly” provocative to Beijing, and with his observation that Beijing will see provocation whatever the new administration does.
The core principle of the coming year therefore should be to adhere fully to what Peter describes as the two main pillars of America’s Taiwan Policy:
1) The Taiwan Relations Act (the “TRA,” P.L. 96-8, signed by President Carter on April 10, 1979); and
2) President Reagan’s Six Assurances of July 14, 1982.
The TRA mandates that the President make available to Taiwan such defense articles and services “as may be necessary to maintain a sufficient self-defense capability.” Only Presidents Reagan and George H.W. Bush took this mandate to heart, providing Taiwan with advanced jet fighters to counter China’s growing air threat. Since then, however, Presidents Clinton, George W. Bush, and Obama approved for sale only weapons systems that were obsolescent, or upgrades of old systems. Previous administrations rationalized this by assuring both the Congress and Taiwan that the US would retain the costly responsibility to defend the island against China, and therefore Taiwan did not need advanced weapons itself.
Policy Recommendations for 2017
1) The new Administration should review the future costs of the US commitment to defend Taiwan, as well as the credibility of that commitment, in light of the ever-increasing strain on US forces in the Pacific Command. Taiwan is in a position to assume the costs of its own defense if only the US would provide it with the necessary equipment. For over a decade, Pentagon studies have identified Taiwan’s requirements for several wings of F-35 type fighters, affordable diesel-electric submarine systems and technologies for at least 8 but up to 24 boats, and expanded numbers of theater missile defense (TMD) units. Total revenues from these sales would be on the order of several tens of billions of dollars over the next decade or two.
2) In President Reagan’s “Six Assurances” to Taiwan the United States pledged not to allow Beijing to dictate the terms of arms supplies to the island; nor would the United States push Taiwan to negotiate with China, much less mediate between Taipei and Beijing. The fifth and sixth assurances were that the United States would not change a longstanding policy regarding Taiwan’s sovereignty; that is, under the terms of the September 1951 San Francisco Peace Treaty, which ended the Second World War with Japan, it was the “longstanding” policy of the United States that: “As Taiwan [is] not covered by any existing international disposition, sovereignty over the area is an unsettled question subject to future international resolution.”
President Reagan’s sixth assurance read: “the United States would not formally recognize China’s sovereignty over Taiwan.”
All administrations since have reaffirmed the assurances. Under unrelenting Chinese negotiating pressure, however, US diplomats have downplayed our commitments to the Reagan assurances. I recommend that General Flynn’s staff familiarize themselves with President Reagan’s “secret” directive to the Secretaries of State and Defense which related to the conditions of the US “Third Communiqué” with China of August 17, 1982. Under present circumstances, it is clear that China is not meeting the requirements under which arms sales to Taiwan would be curtailed; rather than downplay the US commitment to Taiwan outlined in the Six Assurances, the New Administration should reassert this commitment with renewed vigor.
Conclusion: Taiwan as a Strategic Asset
The new administration’s policy toward Taiwan must be guided by the principle that all US policy is “America First”. A strong, self-sufficient, US-oriented Taiwan which contributes to America’s industrial, manufacturing, technology, R&D, growth and prosperity will continue to be an integral part of America’s capacity to defend its core interests in East Asia. By the same token, a Taiwan that is dominated or absorbed by China will erode America’s economic and security interests in the region.
Defending America’s core interests in East Asia requires that Taiwan be treated as a virtual ally in the region with the same care, and that Taiwan be obliged to undertake the same responsibilities as our other allies (particularly Japan and South Korea) share. Your new Administration should give Taiwan access to the full range of self-defense capacities that you would grant Japan and South Korea, to ensure that the United States can maintain its Asian presence in an affordable and strategically sound way.
 David Helvey, “Prepared Remarks of David Helvey, Senior Advisor, performing the duties of the Principal Deputy Assistant Secretary of Defense for Asian and Pacific Security Affairs, to the US-Taiwan Business Council Defense Industry Conference, October 3, 2016 – Williamsburg, Virginia,” (speech, Williamsburg, Virginia, October 3, 2016).
 For a dated, but still useful catalog of US interests in Taiwan see John J. Tkacik, “America’s Stake in Taiwan,” Heritage Foundation Backgrounder 1996 (January 11, 2007), at https://www.heritage.org/research/reports/2007/01/executive-summary-americas-stake-in-taiwan.
 President George W. Bush did approve the sale of diesel-electric submarines to Taiwan, neglecting to consider that the United States has not made D/E submarines for 60 years and had no industrial or regulatory infrastructure to make new ones solely for export. Nor has any other US ally been willing to sell Taiwan D/E submarines (Germany, France, The Netherlands, Italy, Japan or Australia). The United States did provide advanced anti-ballistic missiles to Taiwan, but in limited quantities—roughly one-fifth the number of Chinese missiles targeted on Taiwan.
 For the full text, declassified, of this short memorandum, see James R. Lilley and Jeff Lilley, China Hands: Nine Decades of Adventure, Espionage, and Diplomacy in Asia (New York: PublicAffairs Books, 2004), 248. See also Jim Mann, About Face: A History of America’s Curious Relationship with China, From Nixon to Clinton (New York: Alfred A. Knopf, 1999), 127.