Donald Trump, Republican presidential candidate, in an interview with Bloomberg Businessweek, sparked quite a few confusion with comments on Taiwan's defence by the United States. In an interview on June 25, published July 16, Trump stated that Taiwan should pay US for its defence, which led to a decline in Taiwanese technological giant shares TSMC. In the face of the tremendous profits generated by Taiwanese companies and the economical condition of the island, military support from outside without fair participation in costs seems pointless. Especially as the US does not have any formal agreement in this respect. From the position of another US allies, this situation is not only unfair, but besides has an impact on the implementation of another alliance agreements, designed in a partnership way.
Donald Trump pointed out that the current arrangement resembles that of an insurance company, where 1 organization uses protection without paying adequate fees. Given that Taiwan's economy is simply a global power in terms of gross from the lucrative semiconductor market, it seems logical that any of these funds should be utilized for defence purposes, especially in the tense situation that takes place on the Taipei – Beijing line. This could not only strengthen Taiwan's position but besides show its willingness to cooperate with the global community in a spirit of work and common support.
Trump's comments sparked a fast marketplace reaction – the Taiwanese company TSMC reported a drop in share value by 2.4% on Wednesday. The Taiwanese government besides responded to the Republican candidate's statement. Taiwan's Prime Minister Cho Jung-tai stressed that Taiwan and the US have good relations despite the deficiency of formal defence agreements, and the island is constantly strengthening its defence budget.
Critics may argue that Trump's approach is besides hard and can harm delicate global relations and besides make confusion on the highly profitable semiconductor market. Nevertheless, in a planet where resources are limited and threats are constantly increasing, it is essential that all partners share defence and safety costs. Taiwan, with its developed economy and strategical importance, is no exception here.
In addition, Trump's argument that Taiwan “gives nothing” to the U.S., has its foundation in the historical context. Since 1979, erstwhile the US and China recognised each another and established diplomatic relations, military relations with Taipei became little formal, which increased the financial burden for the United States. Strengthening defence cooperation through a greater financial contribution from Taiwan could reconstruct balance in these relations and show that Taiwan is willing to take greater work for its security.
It is worth noting that while president Trump's message refers to the political situation, a possible regulation of US support could affect IT markets. If rhetoric behind the ocean takes hold, Taiwan will gotta take greater work for its safety to save its markets. This decision will surely be costly, but if the island government does not take any action, it will put its safety at risk, thereby generating economical uncertainty and the outflow of investment abroad, yet losing not only money, but besides hazard losing the trust of companies and the degree of independency from Beijing.
On the global stage, relations between Washington and Taipei stay complex, especially in the face of expanding tensions with Beijing, which does not exclude the usage of force to take control of Taiwan. Taiwan, led by president Lai Ching-te, seeks to keep the stableness and safety of the island while offering a dialog that Beijing, however, consistently rejects.
