Taiwan's Defense Strategy Under Scrutiny With Trump's Call To Pay US For Security And Kamala Harris' Potential Shift In Foreign Policy

The upcoming U.S. elections are causing Taiwan to rethink its defense strategy, with the island nation facing mounting pressure to enhance its military capabilities in the face of increasing uncertainty.

What Happened: Taiwan’s foreign minister, Lin Chia-lung, has indicated that the island must rely on itself for defense, given the threats posed by China, reported CNBC. This comes in response to former President Donald Trump‘s suggestion that Taiwan should pay the U.S. for military protection.

Trump’s comments have highlighted the unpredictability surrounding Taiwan, especially after President Joe Biden withdrew from the race and endorsed his vice president, Kamala Harris, who has relatively less foreign policy experience.

While Biden has maintained a consistent policy toward Taiwan, Trump has been described as “erratic and unpredictable.” This unpredictability is further fueled by the difference in strategy between the two leaders, with Biden expressing the U.S.’s commitment to Taiwan’s defense, while Trump has opted for “strategic ambiguity,” according to Stephen Nagy, professor of politics and international studies at the International Christian University in Tokyo, Japan.

Trump’s tough stance on China has led many in Taiwan to believe that he would significantly support the island, according to Muhammad Faizal, a research fellow at Singapore-based S. Rajaratnam School of International Studies.

However, there are concerns about Trump’s “myopic and transactional approach” to foreign and defense relations, as evidenced by his comments about Taiwan paying the U.S. for defense, according to Faizal.

On the other hand, Harris, who is expected to remain somewhat consistent with Biden’s agenda and foreign policy, would come into office with significantly less foreign policy experience than President Biden, according to analysts.

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Why It Matters: Taiwan’s strategic moves come in the wake of significant political and economic developments. Last week, Taiwan unveiled a $100 billion economic reform plan aimed at attracting investments in energy, AI, and infrastructure.

This plan aligns with President Lai Ching-te's vision of a “smarter, forward-looking sustainability” and aims to enhance Taiwan's global presence.

In July, former President Trump suggested Taiwan should pay the U.S. for its defense, raising questions about future U.S. support for Taiwan if he is re-elected. Trump’s comments led to a significant decline in shares of Taiwan-based AI chip giant TSMC and impacted stocks of major buyers like Apple Inc., Nvidia Corp., and Advanced Micro Devices, Inc.

Taiwan’s Foreign Minister Lin Chia-lung emphasized the need for self-reliance in defense, responding to Trump’s criticism and highlighting the bipartisan support Taiwan receives in the U.S.

Additionally, the semiconductor market experienced a downturn on Jul. 17 following Trump’s comments and Biden’s contemplation of stricter trade restrictions with China. Major players like Broadcom Inc. and AMD. saw sharp declines.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote