Taiwan Is for Sale – Modern Diplomacy
The world is closely watching the potential meeting between Trump and Xi Jinping, which could take place at the APEC summit at the end of October, as well as the formal state visit in January of next year. Undoubtedly, the top priority for both the U.S. and China is to ease tensions, with Washington even more eager than Beijing to achieve a “truce.” This is because Beijing imposed large-scale countermeasures against Washington in October, in retaliation for the various sanctions the U.S. has levied on China since August. China’s countermeasures caught the U.S. off guard and left it struggling to respond.
China’s strict restrictions on rare earth exports have shocked the West, particularly the automotive and semiconductor industries. On the other hand, China’s halt to soybean purchases from the U.S. has frustrated Trump’s most loyal supporters. Washington’s initial reaction was one of anger, with threats of retaliation, but within days, its tone softened. This signals that Beijing has struck at the opponent’s sore spot, while Washington lacks effective tools to fight back.
“You have no cards to play.” Trump’s famous rebuke to Zelenskyy has gone global and will undoubtedly go down in history. Embarrassingly, Trump now finds himself in a similar predicament with Beijing: nearly “out of cards.” To demonstrate that he still has some in hand, Trump has finally pulled Taiwan out of his pocket.
On October 20, in an interview with Bloomberg, Trump listed Taiwan as one of the four top priorities in U.S.-China negotiations—alongside rare earths, soybeans, and fentanyl—and stated, “We’ll get along very well with China.”
According to a report in The Guardian, Trump explicitly said that China “doesn’t want” to invade Taiwan and predicted that “nothing will happen.” He described Taiwan as “an apple in China’s eyes,” emphasizing that “America is the strongest military power in the world by far” and “no one dares to mess with us.” In a buddying tone, he added, “I love my relationship with President Xi. We have a great relationship, and that on the Taiwan issue, “we’ll get along very well.”
In the following days, Trump repeatedly made similar statements in the media. However, on October 26, during an interview aboard his plane en route to Asia, he refused to discuss the Taiwan issue and warned that if China invades Taiwan, “it would be very dangerous for China.”
Trump’s rhetoric follows a very simple logic, as is well known: he fabricates bargaining chips out of thin air, uses soft language to lure the opponent to the negotiating table, then employs tough rhetoric to hint at his confidence in making the opponent yield, while refusing to reveal his hand in advance.
In mid-October, the RAND Corporation—a think tank closely tied to the U.S. military—released a report titled Stabilizing the U.S.-China Rivalry, urging Washington to abandon zero-sum thinking and instead adopt a “step-back” approach to stabilize U.S.-China relations and avoid military conflict. On the Taiwan front, the report suggests that the U.S. should encourage Taiwan and China to create shared interests and emotional bonds that gradually lay the groundwork for reunification. This proposal has been interpreted in Taiwan as “gradual unification,” drawing widespread attention and viewed as a signal of the U.S. abandoning Taiwan.
However, rather than “the U.S. abandoning Taiwan,” the RAND report is more accurately a “delaying tactic,” aiming to prolong the status quo in the Taiwan Strait through a “step-back” strategy, thereby securing U.S. strategic interests in the First Island Chain for the next 5-10 years.
The realist tone of the RAND report is becoming the mainstream view in the U.S. For instance, Time magazine recently published an article that enraged Taiwan’s ruling party: The U.S. Must Beware of Taiwan’s Reckless Leader. The piece argues that Taiwanese President Lai Ching-te’s reckless emphasis on Taiwan’s sovereignty is dragging the U.S. into the risk of military conflict with China. Furthermore, it stresses that Taiwan is a core interest for China but merely a non-treaty ally for the U.S.— America has no reason to get embroiled in war for Taiwan’s sake and should instead invest resources in treaty allies like Japan, South Korea, and the Philippines.
In other words, the restraint-oriented thinking in the U.S. that advocates “focusing on the big picture” is gradually gaining the upper hand. Such arguments often come from individuals and organizations familiar with U.S. military capabilities. Simply put, this rhetoric merely underscores a fact: the U.S. military has low odds of winning a war against China, and it’s not worth risking for a non-treaty ally.
Of course, hawkish thinking in the U.S. remains resilient. In contrast to the restrainers, hawks believe that losing Taiwan would severely damage U.S. credibility in East Asia, and from a long-term perspective, the U.S. would suffer more harm than good, thus stressing that “Taiwan is not for sale” and advocating continuing arms sales to Taiwan, even shifting from “strategic ambiguity” to a “strategic clarity” policy.
But we know Trump doesn’t think that far ahead. Before he leaves office, Taiwan must be “cashed in” to feed this narcissist’s ego. In other words, the one inevitably waving the “Taiwan is for sale” sign is Trump.
In fact, for the West, Taiwan is rapidly depreciating because its most valuable asset—the semiconductor industry—is being hollowed out by the U.S. Taiwan’s vice president recently admitted that not only TSMC but also the ruling party has decided to replicate an identical semiconductor supply chain cluster in the U.S.
Taiwan’s authorities explain this investment plan as “avoiding over-reliance on the single Chinese market,” but those familiar with the semiconductor industry know that Taiwan has always relied on the U.S. market, not China—especially for high-end chips. Relocating the industry to the U.S. will only increase corporate costs, raise chip prices, and introduce even more unpredictable risks.
Rare earths are one such unpredictable risk. Semiconductor manufacturing requires rare earths, albeit in small proportions, but without them, chips cannot be produced. If Beijing wants to keep the semiconductor industry in Taiwan, it could completely ban rare earth exports to the U.S. while continuing normal supplies to Taiwan. Even if the U.S. tries to use Taiwan as a rare earth transshipment hub, that’s impossible, as China’s export controls can precisely calculate buyers’ demand volumes, eliminating any transshipment possibilities.
A more fundamental approach would be to ban rare earth exports to both Taiwan and the U.S., driving Taiwan’s value to rock bottom and preventing Trump from demanding too high a price.
In line with Trump’s style, consolidating proxies across the First Island Chain to form a military deterrence against China is undoubtedly another chip in his hand, but this card no longer works on China. Throughout this year, Beijing has repeatedly flexed its military muscles to signal to the U.S. that China cannot be contained. The U.S. military’s front line has effectively retreated to Guam, and Japan, the Philippines, Taiwan, and South Korea all know that the U.S. is pulling back. Without their backer, they dare not confront China.
The key point is that China understands the U.S.’s strategic goal is to stabilize U.S.-China relations, not to break ties. Therefore, only by doubling down on countermeasures against the U.S. can China achieve a stable state of “competition without rupture,” and facts have proven that a hardline strategy leads to a “TACO” outcome. Beijing has no reason or room to concede, especially on the Taiwan issue.
China is testing various tools to offset Western sanctions, leaving the entire West shrouded in fear and anger over rare earth cutoffs, yet powerless to retaliate. This proves that countermeasures to fully offset Western sanctions are nearly complete. If there’s any vulnerability, it’s the financial defense line, which is not yet fully prepared. This explains why China is actively promoting the internationalization of the renminbi and continuing to reduce its holdings of U.S. debt.
On the other hand, Taiwan’s largest opposition party, the Kuomintang (KMT), replaced its party chairman in October with someone determined to change its U.S. policy. Due to the ruling party’s declining popularity, the KMT is poised to win majority voter support in next year’s elections and those in 2028. The new chairman opposes U.S. directives—demanding that Taiwan raise defense spending to 5% of GDP—and extends a peace olive branch to Beijing, potentially leading to dramatic changes in Taiwan-U.S. relations, a development unfavorable to Washington.
Admittedly, the KMT’s new chairman may neither be able nor willing to convince the Taiwanese people to unify with mainland China, but she could reverse the status quo where Taiwan’s major parties are all pro-U.S. Her support from over half the party members stems from two public opinion bases: first, acknowledging oneself as Chinese; second, opposing the U.S. hollowing out Taiwan. According to polls, 4 million KMT supporters accept Chinese identity, and over half (more than 9 million) of all voters, regardless of party, oppose the U.S. hollowing out Taiwan.
While Taiwanese public opinion is divided, most Taiwanese people oppose the Trump administration’s plundering of Taiwan’s semiconductor industry and also oppose war across the strait—this is the main reason for the ruling party’s sagging approval ratings.
A “distrust of America” sentiment pervades Taiwanese society, along with dissatisfaction toward the anti-China president, prompting Beijing to establish “Taiwan Restoration Day” (October 25) to evoke Taiwanese people’s historical memory of China’s recovery of Taiwan after World War II. This aims to maximize nationalism to offset separatism and reduce Taiwanese resistance to unification. At the same time, Beijing uses this move to send a clear signal to the U.S. and neighboring countries: China is determined to resolve the Taiwan issue and is working to remove all obstacles.
Beijing now holds a strong hand; even the U.S.’s “Taiwan card” has become a card China can counter with. In line with Xi Jinping’s decision-making style, he will concede when unprepared, but once fully ready, he will strike suddenly, catching the opponent off guard.
Trump should be very aware that his current position is precarious, making it hard to reverse Beijing’s advantageous stance. Even the “chip card” is no longer effective. Thus, aside from selling Taiwan, he has no other good options—and this is the situation most feared by Taiwan’s elites: the window for “maintaining the status quo” is closing.
However, the sentiments of Taiwan’s elites are also shifting with the situation. Due to the KMT’s policy pivot, more and more Taiwanese elites may pragmatically reassess Taiwan’s future in the coming years, as KMT supporters lead the way, turning back to demand that elites devise countermeasures to change cross-strait relations and foster peace.
When U.S. hawks emphasize “Taiwan is not for sale,” it ironically highlights America’s intent to sell Taiwan. Yet, if this can lead to a peaceful resolution, the trend should be welcomed rather than doubted. After all, there are no winners in war, and those sacrificed are often innocent civilians.
Taiwan is for sale—the buyer is only one. The fear is that Trump might overprice it, backfiring and once again squandering his chance at a Nobel Peace Prize.
