The Taiwan Relations Act: A Necessary but Not Sufficient Tool for Maintaining Cross-Strait Stability

The Taiwan Relations Act: A Necessary but Not Sufficient Tool for Maintaining Cross-Strait Stability

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The Taiwan Relations Act: A Necessary but Not Sufficient Tool for Maintaining Cross-Strait Stability

Few relationships are guided by a single piece of legislation, much less one passed nearly half a century ago. The modern US-Taiwan relationship, however, is a notable exception. The Taiwan Relations Act (TRA) sets forth US commitments to Taiwan that have helped undergird cross-Strait stability for decades. The TRA’s text sits on the desks of nearly everyone in the US government who works on Taiwan policy and is continually reaffirmed by senior US officials. Congress, which took the initiative in drafting the bill in 1979 and included far more robust language than the Carter Administration envisioned, carved out a leading role for itself on Taiwan policy, one that it has maintained ever since and that is hard to find elsewhere.

While the TRA provided the foundation for modern US-Taiwan relations, its underlying assumptions and conditions have dramatically changed since it was signed. As a result, while rightly celebrating the TRA’s staying power, analysts and policymakers should think critically about whether it provides sufficient tools to maintain cross-Strait stability for the next 45 years.

The Shifting Status Quo

When the United States terminated governmental relations with the Republic of China (Taiwan) in 1979, it was essentially trading the authoritarian dictatorship that claimed to represent mainland China with the authoritarian dictatorship that actually governed that area. Chiang Ching-kuo (蔣經國) and the Kuomintang (KMT, 國民黨) ruled Taiwan through martial law, relying on a feared secret police and a party-army to ensure that threats to the regime did not materialize. Even though the People’s Republic of China (PRC) never renounced using force to achieve unification, the prospect that it would do so seemed remote. At the time, the People’s Liberation Army (PLA), largely a ground-based force that lacked power projection capabilities, could not invade Taiwan or successfully blockade it. The political leadership in Beijing, meanwhile, was focused above all on economic growth and needed US investment and support to achieve its development goals. Aggression against Taiwan, however, would take US economic support off the table.

Now, however, the context has radically changed. Taiwan has transitioned into a consolidated democracy, with Freedom House ranking it as the second-freest place in Asia (behind Japan) and the 22nd globally, the Human Freedom Index placing it 12th in the world and first in Asia, and the Economist Intelligence Unit’s Democracy Index putting it 10th in the world. Taiwan is a like-minded partner of the United States that works with it on an array of issues, from democratic governance to climate change, public health, counterterrorism, and women’s empowerment.

China, for its part, has embarked on a rapid military modernization, decisively shifting the balance of power in the Taiwan Strait in its favor. China’s military budget has ballooned from USD $9.9 billion in 1990 to USD $222 billion in 2024. Notably, Beijing has consistently prioritized the capabilities it would need to subjugate Taiwan, including amphibious warfare ships, advanced fighter jets, and ballistic missiles. CIA Director William Burns stated in February 2023 that the United States knows “as a matter of intelligence” that Xi Jinping (習近平) has ordered the PLA to be ready to invade Taiwan by 2027, while Admiral John Aquilino, the commander of US Indo-Pacific Command (INDOPACOM), noted in March 2024 that “all indications point to the PLA meeting President Xi Jinping’s directive to be ready to invade Taiwan by 2027.”

While successive Chinese leaders oversaw a massive military buildup, Taiwan allowed its deterrent to atrophy, with defense spending largely stagnant during the Ma Ying-jeou (馬英九) Administration. The Tsai Ing-wen (蔡英文) Administration took important steps to reverse this worrying trend, nearly doubling defense spending so that it now equals roughly 2.6 percent of GDP (USD $19 billion). Moreover, her administration has increasingly invested in asymmetric capabilities such as an indigenous submarine program, missiles, and drones, while extending conscription from three months to one year. Still, the US Department of Defense warns that “The PRC’s multi-decade military modernization effort continues to widen the capability gap compared to Taiwan’s military.”

Indications that Xi will seek to make unification with Taiwan a pillar of his legacy only add to fears about the durability of peace and stability in the Taiwan Strait. Xi has repeatedly linked unification to the “rejuvenation of the Chinese nation” and even asserted that achieving unification “is the essence of national rejuvenation.” Xi has also stated that the Taiwan issue “cannot be passed from generation to generation,” which could mean that he will seek to annex Taiwan while in power. Xi and senior policymakers within the Chinese system also increasingly speak of unification as “inevitable.”

Vital Interests at Stake

As the status quo in the Taiwan Strait has grown more tenuous, an appreciation for the vital US interests at stake has emerged. If China were to seize Taiwan, it would severely undermine international order by demonstrating that countries can unilaterally redraw borders. Such an outcome, following Russia’s invasion of Ukraine, would set a dangerous pattern that other countries with territorial ambitions could seek to follow. If China were to station its military on the island, the United States would find it far more difficult to project power, defend its allies, and operate in international waters in the Western Pacific. US allies would come to question the wisdom of relying on the United States for their defense and either accommodate China or pursue strategic autonomy, which could include developing an independent nuclear deterrent. A war in the Taiwan Strait would also usher in a severe global economic crisis that Bloomberg estimates would shave USD $10 trillion (roughly 10 percent) off global GDP, a greater shock than either the global financial crisis or the COVID-19 pandemic. Finally, if China were to take control of Taiwan, it would spell the end of a thriving, pluralistic democracy.

Reflecting this growing recognition of US interests in the Taiwan Strait, according to one recent poll, two-thirds of Americans say that the US security relationship with Taiwan does more to strengthen than weaken US national security. Similarly, three-quarters of those surveyed voiced support for imposing sanctions on China in the event of a Chinese invasion of Taiwan, while 60 percent supported providing military assistance to Taiwan in the event of an attack.

To The Future

The TRA has provided a robust foundation for the US-Taiwan relationship for 45 years, but it would be difficult or even impossible for any piece of legislation to contend with such dramatically changed circumstances—principally an emboldened, assertive, and capable China and a Taiwan that has evolved into a close US partner and liberal democracy. US policy must adapt to align with this new reality.

First, the United States should replace its policy of strategic ambiguity with what Richard Haass and I termed in 2020 “strategic clarity,” making explicit to Beijing that it would come to Taiwan’s defense in the face of aggression. Washington should pursue this in a manner that is consistent with the US “One-China Policy.” The TRA asserts that it is the policy of the United States “to consider any effort to determine the future of Taiwan by other than peaceful means […] of grave concern to the United States” and “to maintain the capacity […] to resist any resort to force or other forms of coercion that would jeopardize the security, or the social or economic system, of the people on Taiwan.” In other words, the TRA states that the United States must be able to defend Taiwan, without committing the United States to doing so. Strategic ambiguity worked when China prioritized economic development over all else, could not seriously threaten Taiwan militarily, and pursued a strategy of hiding its capabilities and biding its time. Now, however, to contend with a China that is far more assertive, risk-acceptant, and that could be coming to doubt whether the United States would intervene on Taiwan’s behalf, a policy of strategic clarity is needed to bolster deterrence.

Second, the TRA commits the United States to “make available to Taiwan such defense articles and defense services in such quantity as may be necessary to enable Taiwan to maintain a sufficient self-defense capability.” To date, however, the vast majority of time and effort has been dedicated to selling Taiwan weapons, while building Taiwan’s military capacity through training and exercises has been a secondary concern. Although this has begun to change in recent years, the United States should place much greater emphasis on ensuring that Taiwan’s military has access to cutting-edge training, can employ its military hardware proficiently and creatively, and can conduct complex operations in a degraded command and control environment. Congress can lead this effort and it has already taken steps in this direction; the 2022 National Defense Authorization Act (NDAA), for instance, directs the Department of Defense to “establish a comprehensive training, advising, and institutional capacity-building program for the military forces of Taiwan.” Congress should continue to codify into law programs and opportunities to build Taiwan’s capacity to resist PRC aggression.

Third, the TRA does not include provisions regarding a potential sanctions regime against Beijing if it were to use force against Taiwan. While the prospect of sanctions is unlikely to prove decisive, making clear the economic costs that China would incur if it were to attempt a blockade or invasion of Taiwan could nonetheless contribute to deterrence. The aim of such legislation should be to convince leaders in Beijing that attempting to forcefully unify Taiwan would be incompatible with their overarching modernization objectives. Congress could accomplish this by passing some version of the proposed Sanctions Targeting Aggressors of Neighboring Democracies (STAND) with Taiwan Act.

Finally, while the TRA calls for the president to “inform the Congress promptly of any threat to the security or the social or economic system of the people on Taiwan,” it leaves ambiguous the threshold of PRC actions that would require such consultations. Increasing PRC gray zone coercion, however, necessitates a conversation about actions that could fall short of a blockade or invasion but nonetheless threaten Taiwan’s security and should prompt the president to discuss such actions with Congress. Congress can and should hold hearings on this question.

The 45th anniversary of the TRA provides a ripe opportunity to take stock of all that has changed over the past four-plus decades, revisit the law’s underlying assumptions, and examine holes that should be filled. Few foreign policy issues are the same today as they were in 1979, and US policy must adjust in order to deter a far more capable and assertive China.

The main point: Though the Taiwan Relations Act has proven remarkably effective in guiding the US approach to Taiwan for over four decades, geopolitical realities have evolved significantly, potentially rendering the Act insufficient. To maintain cross-Strait peace and stability going forward, the United States will need to update and strengthen the legal frameworks undergirding the US-Taiwan relationship.