Trump, Taiwan, and the Art of the Deal: Why “nothing’s changed” isn’t the full story

In the lead-up to US President Donald Trump’s visit to China last week, the policyverse was holding its breath to see what the summit would herald for Taiwan.

On the surface, nothing much seemed to happen.

• Xi Jinping forcefully restated China’s position, calling it “the most important issue in China-US relations” with the potential to bring the two countries into conflict if mishandled.

Trump also signaled continuity of US policy, saying in a Fox News interview that “nothing’s changed.”

• “I’m not looking to have somebody go independent.”
• “We’re supposed to travel 9,500 miles to fight a war. I’m not looking for that. I want them to cool down. I want China to cool down.”

Likewise, Secretary of State Marco Rubio told NBC News that “US policy on the issue of Taiwan is unchanged as of today.”

So, case closed, right?

• Not so fast.

While reporting focused on the message of continuity, we interpret the President’s recent comments as adopting a fundamentally different approach to Taiwan than past US administrations.

Strictly business: In the same Fox News interview, Trump expressed deep ambivalence about US support for Taiwan, repeating his oft-mentioned gripe about Taiwan’s semiconductor industry.

• “[Taiwan] stole our chip industry.”
• If…one of our presidents just said…you can build in Taiwan, but…we are going to put 100 percent or 200 percent tariff, we would have never lost a chip.”

Additionally, Trump openly stated that the pending approval of a major new arms package for Taiwan – worth a record-breaking USD 14 billion – was up for discussion with Beijing:

• “I’m holding that in abeyance; it depends on China.”
• “It’s a very good negotiating chip for us.”

This is unprecedented.

• While relations with the mainland have always been a consideration in the timing and scope of American arms sales to Taiwan – this is the first time the US has framed the sale as a negotiation with Beijing.
• Trump has effectively demoted Taiwan from security partner to second bidder in a negotiation with the mainland.
• The framing also implies linkages to other commercial or political issues that would not previously have been part of the discussion around Taiwan.

For its part, Beijing is already signaling that future dialogue will depend on how the White House proceeds with the sale.

• China has reportedly made hosting an upcoming US Defense Department delegation contingent on the Trump administration’s handling of the sale.
• Such a visit could pave the way for a further trip by Defense Secretary Pete Hegseth, who accompanied Trump to Beijing last week.

Convenient timing: On May 21, Acting Navy Secretary Hung Cao told Congress that the administration was pausing the sale in order to *checks notes* preserve weapons stocks for use in the Iran war.

• “Right now, we’re doing a pause in order to make sure we have the munitions we need for Epic Fury – which we have plenty.”
• “But we’re just making sure we have everything, but then the foreign military sales will continue when the administration deems necessary.”

Sure, Hung.

Beijing conditioning dialogue with the US on the latter’s respect for Taiwan-related red lines is nothing new.

• What is new is the Trump administration’s apparent openness to transactional dealmaking – giving Beijing reason to believe that the right quid pro quo could yield real concessions on Taiwan.

That all might sound like good news for China, but Trump’s transactional approach to Taiwan cuts both ways.

• Speaking to reporters on Air Force One on his way back from China, Trump said that he would “have to speak to the person right now who is running Taiwan” to discuss the arms sale.

The person in question is Taiwanese leader Lai Ching-te, who Beijing has labelled a “diehard separatist.”

• From Beijing’s perspective, a US President speaking to a Taiwanese leader is a fundamental red line and would be an unprecedented breach of protocol.

The irony is that Trump may call Lai to tell him to tone down the rhetoric – much like he did last November when, after a phone call with Xi Jinping, he reportedly told the Japanese Prime Minister not to further provoke China over Taiwan.

• Even so, China will not accept direct communication between Trump and Lai, no matter the message he intends to send.

On May 20, Lai told journalists that, if he spoke to Trump, he would emphasize the importance of continued US arms sales for maintaining peace and that China, not Taiwan, was driving cross-straits tensions.

There’s another way Trump’s obsession with dealmaking could backfire for Beijing: It opens the door for Taipei to play the same game.

• Taiwan holds real cards, for example by facilitating further chip manufacturing investment in the US – exactly the kind of visible, economy-first win Trump craves.
• And even arms purchases can be reframed as a deal – if Taipei is buying, Trump has every incentive to make the package as big and beautiful as possible.

Putting it all together: Despite being nominally aligned with decades of US policy, the Trump administration’s flexible approach to Taiwan injects new uncertainties into cross-strait relations.

• The current status quo in the Taiwan Strait hinges partially on the assumption that each of the three parties acts in predictable, norm-guided ways.
• If that assumption no longer holds true, Washington, Beijing, and Taipei may feel emboldened to take risks which invite overreaction.

The bottom line: There’s no need to panic – yet.

• But as new dynamics emerge in the Taiwan Strait and beyond, this hottest of global hot spots warrants extra attention.

Joe Mazur, Head of Geopolitical Research, Trivium China