Taiwan: Background and U.S. Relations

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Updated December 26, 2024

Taiwan: Background and U.S. Relations

Introduction

Taiwan, which also calls itself the Republic of China (ROC), is a self-governing democracy of 23.4 million people located across the Taiwan Strait from mainland China. The United States terminated diplomatic relations with the ROC on January 1, 1979, in order to establish diplomatic relations with the People’s Republic of China (PRC), which claims sovereignty over Taiwan. At that time, the U.S. government also agreed to withdraw U.S. military personnel from Taiwan and terminate a U.S.-ROC Mutual Defense Treaty, and stated that it would henceforth maintain “cultural, commercial, and other unofficial relations with the people of Taiwan.” The 1979 Taiwan Relations Act (TRA, P.L. 96-8; 22 U.S.C. §§3301 et seq.) provides a legal basis for unofficial relations.

In its most recent fact sheet on U.S. relations with Taiwan, issued in 2022, the U.S. State Department refers to the United States and Taiwan as enjoying “a robust unofficial relationship.” The fact sheet describes Taiwan as “a key U.S. partner in the Indo-Pacific,” and states that the United States and Taiwan “share similar values, deep commercial and economic links, and strong people-to-people ties.”

Figure 1. Taiwan

Source: Graphic by CRS.

Modern History

Taiwan was a colony of Japan from 1895 to 1945. The government of the ROC, then based on mainland China, assumed control of Taiwan in 1945, after Japan’s defeat in World War II. In 1949, after the forces of the Communist Party of China (CPC) wrested control of mainland China from ROC forces in a civil war, the Kuomintang (KMT)-led ROC government retreated to Taiwan, and the CPC established the PRC on mainland China. The United States continued to recognize the ROC government on Taiwan as

the government of all China. In 1971, UN General Assembly Resolution 2758 recognized representatives of the PRC as “the only legitimate representatives of China to the [U.N.],” and expelled “the representatives of Chiang Kai-shek,” the ROC’s then-leader. In a December 15, 1978 U.S.-PRC communiqué, the United States recognized the PRC government as “the sole legal Government of China.”

The KMT enforced martial law on Taiwan from 1949 to 1987, when the party yielded to public pressure for political liberalization. Taiwan held its first direct election for the legislature, the Legislative Yuan (LY), in 1992, and its first direct election for president in 1996.

2024 Political Transition

In January 2024 elections, Lai Ching-te (William Lai) of the Democratic Progressive Party (DPP) won the presidency with 40.05% of the vote in a three-way race. He and Vice President Hsiao Bi-khim, a former unofficial Taiwan representative to the United States, were inaugurated in May 2024. The DPP is the first party in Taiwan’s history to win a third consecutive presidential term by direct election. Lai’s predecessor, Tsai Ing-wen of the DPP, served the maximum two four-year terms allowed.

The 2024 elections produced divided government. The DPP lost its majority in the 113-seat LY; no party won a majority, the first such outcome since 2004. The KMT, now Taiwan’s leading opposition party and supportive of greater engagement with the PRC, won 52 seats, to the DPP’s 51, and soon after won a contest for LY speaker. KMT-aligned independents won 2 seats. The Taiwan People’s Party (TPP), founded in 2019 to challenge the dominance of the DPP and KMT, won 8 seats.

The DPP has long viewed Taiwan as a sovereign, independent country, while the KMT sees it as part of a larger ROC that should include mainland China. Former President Tsai trod carefully in her public statements on Taiwan’s political status, often embracing ambiguity in an effort to unite diverse political constituencies at home, avoid a showdown with the PRC, and maintain support from a U.S. government that has long stated its opposition to unilateral changes to the status quo. Lai has appeared less inclined toward ambiguity. His central position on sovereignty is inherited from Tsai: a statement that, “The Republic of China and the People’s Republic of China are not subordinate to each other,” suggesting that the PRC and ROC exist side-by-side as separate countries. Tsai first coined the formulation in her second term, in 2021, as the second of four commitments on cross-Strait relations. Lai has made it the core of his cross-Strait policy.

U.S. Policy Toward Taiwan

Since 1979, U.S. government policy has been to follow a U.S. “one-China policy” with regard to Taiwan. The Biden Administration describes this policy as guided by (1) the

Taiwan: Background and U.S. Relations

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TRA; (2) U.S.-PRC joint communiqués concluded in 1972, 1978, and 1982; and (3) “Six Assurances” that President Ronald Reagan communicated to Taiwan’s government in 1982. (See CRS In Focus IF12503, Taiwan: The Origins of the U.S. One-China Policy, and CRS In Focus IF11665, President Reagan’s Six Assurances to Taiwan.)

Key provisions of the TRA include the following: • U.S. relations with Taiwan shall be carried out through

the American Institute in Taiwan (AIT), a private corporation. (AIT Taipei performs many of the same functions as U.S. embassies elsewhere.)

• The United States “will 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.”

• It is U.S. policy “to maintain the capacity of the United

States 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.”

On the eve of Taiwan’s 2024 election, a senior Biden Administration official said President Biden had outlined U.S. policy to his PRC counterpart, Xi Jinping, in November 2023, as: “[W]e oppose any unilateral changes to the status quo from either side. We do not support Taiwan independence. We support cross-Strait dialogue, and we expect cross-Strait differences to be resolved by peaceful means, free from coercion, in a manner that is acceptable to the people on both sides of the Strait. We do not take a position on the ultimate resolution of cross-Strait differences, provided they are resolved peacefully.”

The TRA creates “strategic ambiguity” by not specifying whether the United States would defend Taiwan in the event of a PRC attack. Since 2021, President Biden has four times stated that the United States would defend Taiwan; White House officials said U.S. policy was unchanged.

As a 2024 presidential candidate, President-elect Donald J. Trump was more equivocal about defending Taiwan. In a July 2024, interview with Bloomberg Businessweek, Trump said, “Taiwan should pay us for defense.” Comparing U.S. support for Taiwan to “an insurance policy” and referencing the wealth generated by Taiwan’s semiconductor manufacturing industry, Trump asked, “Why? Why are we doing this?” In a September 2024, interview with a Washington Post columnist, Trump stated that the PRC would not attack Taiwan during his presidency, but predicted, “eventually they will.” He asserted that Taiwan should increase its defense spending from 2.6% to 10% of gross domestic product.

PRC Policy Toward Taiwan

The PRC’s Anti-Secession Law, passed in 2005, states that in the case of Taiwan’s “secession” from China, or if the PRC concludes that possibilities for peaceful unification have been exhausted, “the state shall employ non-peaceful means and other necessary measures to protect China’s sovereignty and territorial integrity.” In 2024, the PRC cited that law and two others in issuing judicial guidelines allowing for trial in absentia and the death penalty for “diehard ‘Taiwan independence’ separatists.”

At the CPC’s 20th Party Congress in 2022, PRC leader Xi referred to unification with Taiwan as necessary for “the rejuvenation of the Chinese nation.” He reiterated the CPC’s preference for peaceful unification, and its proposal for a “One Country, Two Systems” approach to governance of Taiwan. Xi also restated that the CPC “will never promise to renounce the use of force” to unify with Taiwan.

Beijing cut off communication with Taiwan’s government in 2016, citing then-President Tsai’s unwillingness to endorse a KMT-CPC-agreed formula, “the 1992 consensus.” It holds that Taiwan and mainland China are parts of “one China,” with different interpretations of what “China” means. President Lai has rejected the formulation. The PRC has long sought to isolate Taiwan internationally, including by inducing Taiwan’s diplomatic partners to recognize the PRC diplomatically instead. (See CRS In Focus IF12646, Taiwan’s Position in the World.)

Taiwan’s Security

In 2023, CIA Director William J. Burns stated that Xi had instructed the People’s Liberation Army (PLA) to “be ready” to “conduct a successful invasion” of Taiwan by 2027, but added, “that does not mean that he’s decided to conduct an invasion.” (See CRS In Focus IF12481, Taiwan: Defense and Military Issues and CRS Report R48044, Taiwan Defense Issues for Congress.) The PLA launched military drills around Taiwan after President Lai’s May 2024 inauguration speech and October 2024 National Day speech as “punishment” for alleged Taiwan “separatist” acts and rhetoric. The PLA also conducted unannounced major military exercises around Taiwan in December 2024, after Lai’s return from his first trip abroad as president, including transit stops in Hawaii and Guam. (See CRS In Focus IF12371, Taiwan Presidents’ U.S. Transit Visits.)

U.S.-Taiwan Economic Ties

Taiwan was the seventh-largest U.S. merchandise trading partner in 2023, a key link in U.S. global semiconductor and technology supply chains, and the global center for the production of advanced chips. In June 2023, the United States and Taiwan signed the first agreement under a U.S.- Taiwan Initiative on 21st Century Trade. (See CRS In Focus IF10256, U.S.-Taiwan Trade and Economic Relations.)

Taiwan and the 118th Congress

In the 118th Congress, enacted legislation related to Taiwan includes the United States-Taiwan Initiative on 21st-Century Trade First Agreement Implementation Act (P.L. 118-13), the Indo-Pacific Security Supplemental Appropriations Act, 2024 (P.L. 118-50), the National Defense Authorization Act (NDAA) for FY2024 (P.L. 118-31), and the Servicemember Quality of Life Improvement and NDAA for FY2025 (H.R. 5009). The FY2025 NDAA authorizes a Taiwan Security Cooperation Initiative to enable “the military, central government security forces, and central government security agencies of Taiwan to defend against coercion and aggression.” The Building Options for the Lasting Security of Taiwan through European Resolve (BOLSTER) Act, also in the FY2025 NDAA, requires consultations with European partners on plans for sanctions against the PRC in the case of PRC hostilities against Taiwan.

Susan V. Lawrence, Specialist in Asian Affairs

Taiwan: Background and U.S. Relations

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