President Donald Trump’s first month in office has been dizzying for U.S. allies, partners, and adversaries alike. At first glance, Taiwan might count itself lucky for largely flying under the radar as Trump focuses on the Western Hemisphere and Europe. On closer inspection, though, Trump has already taken actions that make the island more vulnerable.
Trump’s ambition to expand the territory of the United States undermines a fundamental tenet of international order, principally that borders should not be changed through force or coercion. The fact that the United States, the architect and guarantor of this order, is hollowing out this norm only elevates the risk that other countries will seek to act on their territorial ambitions. This has direct implications for Taiwan: If Trump can take Greenland, why can’t China take Taiwan? Growing discussion about a U.S. sphere of influence in the Western Hemisphere is also a welcome development for China, which will likely ask the United States to demonstrate similar deference to its interests in Asia. China would demand that Taiwan, above all else, be firmly within its sphere.
President Trump has also made clear that he wants to negotiate a broad economic deal with China, which raises the question of what China will seek in return. His past statements about Taiwan—accusing it of stealing America’s semiconductor manufacturing industry and doubting whether the United States should or even could defend the island—may prompt Chinese leader Xi Jinping to conclude that Trump cares far more about trade than Taiwan. He may then offer concessions on the former in exchange for something on the latter. Xi may look at the U.S. decision to negotiate directly with Russia about the war in Ukraine, without a seat at the table for Ukraine, as a precedent for direct negotiations with Trump over Taiwan.
These fears may never come to pass, but Taiwan is already finding that the next four years will prove especially difficult for navigating its most important relationship. Trump has proposed levying tariffs between 25 and 100 percent on all chips entering the United States, which will hit Taiwan hardest as the island dominates the semiconductor manufacturing industry. President Trump has dismissed the CHIPS and Science Act of 2022, which awarded the Taiwan Semiconductor Manufacturing Company (TSMC) $6.6 billion in grants to build a foundry in Arizona, as a “ridiculous program,” despite the law already catalyzing $450 billion in private investments in the United States. Of companies such as TSMC, Trump has flatly stated, “we don’t want to give them billions of dollars,” throwing into question whether it can count on the grants it has already been awarded.
The Trump administration’s freeze on nearly all foreign assistance calls into question whether Taiwan will receive additional military aid from the United States. The Biden administration provided Taiwan with $345 million in military aid in 2023 and $571 million in 2024. The issue is not whether Taiwan can afford to fund its military absent U.S. aid, but rather that this channel allows the United States to deliver capabilities to Taiwan more rapidly than through traditional foreign military sales. There may be reason to doubt that Trump will resume such aid to Taiwan, as he has argued that Taiwan should instead be paying the United States for protection.
Taiwan is attempting to get ahead of these issues but is having mixed success. President Trump broadly views U.S. allies and partners as free-riders and believes—not without reason—that they should spend more on their defense. He has publicly stated Taiwan should allocate 10 percent of GDP to defense. Taiwan, which spends roughly 2.5 percent of GDP on defense, could therefore become a target. In response, Taiwan’s President Lai Ching-te proposed increasing Taiwan’s defense budget to over 3 percent of GDP by the end of the year. But without control over the legislature, and the opposition determined to cut defense spending, it will be difficult for Lai to fulfil this pledge.
Lai has also committed to pursuing “balanced trade” and bolstering investment ties with the United States. He singled out cooperation in semiconductor manufacturing, arguing that Taiwan is “an indispensable partner in the process of rebuilding American manufacturing and consolidating its leadership in high-tech.” But balancing bilateral trade is easier said than done; the United States’ sixth-largest trade deficit is with Taiwan. This bilateral trade deficit has ballooned from $13 billion in 2016, when Trump first took office, to $74 billion in 2024. If Trump is determined to address trade deficits in descending order, Taiwan could soon find itself in his crosshairs.
Taiwan’s situation is aggravated by the fact that, while many U.S. allies and partners have other strategic options they could turn to if they concluded they could no longer rely on the United States, Taiwan does not. Taiwan cannot deter China alone, while no country is willing or able to assume the role that the United States has traditionally played in Taiwan’s defense. Rather, the island is acutely vulnerable to President Trump’s whims, which have already weakened it. The next four years is shaping up to be the most volatile years in the Taiwan Strait in decades.
