Amid the coronavirus, Taiwan has become an epicenter of international geopolitics between China and the United States in the World Health Organization (WHO). Taiwan, which shares a complicated history with the two economic powers, has now arrived at a crossroads of political and economic challenges—with a perceived military option as a last resort.
The longstanding Chinese conviction is that Beijing will ultimately unify the island, and through “force” if need be as President Xi Jinping has claimed in the past. Meanwhile, the United States’ new TAIPEI Act (Taiwan Allies International Protection and Enhancement Initiative) has all but removed the ambiguity of the One China policy that helped maintain the status quo since Washington recognized Beijing in 1979.
With two pro-nationalist administrations in Taipei and Washington, unprecedented political and military advances at the bilateral level raise ambivalent sentiments. Tsai Ing-wen will have to deal with three political and economic challenges after her second inauguration occurred on May 20, 2020. She will eventually be forced to address China’s response to the cross-Strait issues after Beijing’s annual “two sessions” congress meetings, which were rescheduled for May 21-22 in Beijing.
Premature Death to US Legislation
Anticipating a range of direct Chinese responses, the Tsai administration must first prepare strategic solutions to the likely situation of Beijing halting Taiwanese imports, which comprised over 40 percent of Taiwan’s total trade in 2019. More importantly, trade relations with China account for $50 billion—a critical source of Taiwan’s annual trade surplus. This could easily force Taipei to label products as being “from Taiwan, China.” This would be an old but a brilliant Beijing strategy: forcing Taiwan to align more with the One China policy and circumventing the TAIPEI Act. The move would also present the United States with an early casualty of economic warfare while foreshadowing the disastrous implications of the Trump administration’s “trade war” with China.
The political calculations in President Trump’s re-election campaign and the White House’s prevailing consideration of imposing tariffs on China would negatively impact Taiwan’s prospects for better cross-strait relations. The Trump White House has neither viable economic endowment nor credible diplomatic power, and it lacks support and trust from even its European and Asian allies and friends. Obviously then, the TAIPEI Act will hardly be an effective strategy to convince or force other countries to side with the United States in a political standoff with China. There are hardly any exports that the United States needs from Taiwan that could not otherwise be redirected from China. Taiwan’s geographic proximity, bilateral investment relations, inherent connectivity of global value chains, historical linkages, and shared language are increasingly in China’s favor.
Trade that Binds Nations
Second, the Economic Cooperation Framework Agreement (ECFA) signed between China and Taiwan in 2010 is another upcoming challenge for the Tsai administration if China decides to withdraw from it or curtail the mutual economic benefits and tariff advantages. About 5-7 percent of Taiwan’s overall trade—mainly petrochemical, textile, electronic components, and agricultural products—entitled to zero-tariff privileges on the “early harvest list” would be seriously affected.
The most critical part of ECFA may not be in regards to the economic give-and-take but rather in the prospects of political uncertainty. Thus far, there is no clear sign as to what extent the Tsai administration will proceed. Under the prevailing negative political atmosphere in cross-Strait relations, should ECFA be discouraged, it will constitute as a direct warning to Taipei.
Non-military Pressure on Taiwan
Third, it is unlikely that China would repeat a military action to take possession of Taiwan’s island-territories as it did in the past, involving the US evacuation effort. Instead, China will most likely use non-military tools for political ends while putting economic pressure on the Tsai administration. For example, Beijing could further shrink Taiwan’s international influence through sharp-power economic diplomacy and its growing political influence on other countries, which would dim Taipei’s hope for the resumption of cross-Strait relations.
Sustained maintenance of China’s Liaoning Aircraft Carrier, reconnaissance aircraft data missions, and submarine patrols in the Taiwan Strait are also part of this auxiliary pressure strategy. The US counter-military strategy in the cross-Strait and the South China Sea might continue, but Beijing’s economic strategy seems to be more effective, as shown in the Philippines, Sri Lanka, and elsewhere.
Rhetoric as Strategy
Rhetoric is an asset in a political campaign, especially as President Trump is focusing on his re-election campaign with a strategy of China-bashing against his opponent. If history is a guide in dealing with the United States and its evolved relations with China, the Tsai administration needs to rethink its antagonizing approach to its increasingly powerful neighbor, whose relations go beyond the politics of noise.
Throughout the coronavirus pandemic, Taipei has followed in Washington’s footsteps in vocalizing its criticism of China’s cover-up of the coronavirus from the onset and has openly attacked the WHO. The emerging domestic nationalism and populism is supercharging the course of public opinion and netizen sentiments. In the short run, it may look as good as a positive performance of the ruling administrations in Taipei and Washington. Strategically, however, it may backfire in the post-coronavirus contest of Sino-American geostrategic rivalry and Washington’s decoupling rhetoric and blame game tactics for myopic political ends. In her second term, President Tsai needs to quickly find a way to engage with China rather than speculate residual advantage of Sino-American rivalry.
Political tensions across the Taiwan Strait have been reinforced during the coronavirus pandemic. The last thing that Taiwan would want is to provoke Beijing with direct and indirect actions to push for independence. Garnered by the Trump administration’s anti-China political campaign and Taiwan’s domestic anti-China populism, the ruling Democratic Progressive Party of Taiwan prepares to push the envelope through a legislative proposal by denying that “national unification” is an alternative in future China-Taiwan relations. New turbulence may soon shake regional stability and peace. It will become an unprecedented challenge for President Tsai when she begins her second term.