$14 billion arms sale to Taiwan is Trump’s litmus test for China | American Business Institute

The world may be fascinated by the U.S.-Iran drama, but Western Pacific nations are also closely watching something else: the saga of an arms deal involving Taiwan. The fate of a record arms deal between the United States and Taipei has become a test of whether President Donald Trump can pursue strong, competitive policies while engaging diplomatically with China — or whether he slides toward a disastrous accommodation posture.

Arms sales are at the heart of relations between the United States and Taiwan. The Taiwan Relations Act, enacted by Congress in 1979, declares that America will sell defensive weapons to Taiwan. In 1982, the United States promised Taipei… in the frame of the so-called Six Assurances – that he would support these arms sales and not negotiate their timetable or content with Beijing. The military procurement relationship has only become more critical as China’s relentless buildup threatens to leave Taiwan hopelessly outgunned.

The first Trump administration aggressively armed Taiwan as part of the shift toward rivalry with China. Last year, Trump approved – after some hesitation – a record $11 billion in arms sales, including rocket launchers, self-propelled howitzers and other sophisticated capabilities.

The deal fits well with Trump’s demands that Taiwan spend more on its own security. And in May, the Taiwanese the legislature passed a special $25 billion defense budget that includes funding for an even larger deal, including advanced air and missile defenses and totaling $14 billion. But today the fate of that package, as well as U.S. support for Taiwan, has become uncertain.

The first problem is Iran. In the ongoing war, the United States has destroyed enormous quantities of weapons – ground-based missiles, air and missile defenses, and others – that Taiwan might otherwise have purchased. Last week, Acting Secretary of the Navy Hung Cao announced that US arms sales to Taipei have been suspended due to the demands of the Iranian conflict; Washington also informed Japan that delivery Tomahawk missiles would be delayed.

U.S. arms deliveries to Pacific allies and partners were already suffering from years-long delays. Today, the war in Iran has moved the Pentagon’s capabilities away from the Pacific. And made it more difficult for America’s friends to arm themselves.

The second problem concerns the Chinese leader, Xi Jinping. Officials in Beijing bristled for a long time to the arms deals between the United States and Taiwan. Xi representatives reportedly warned Trump aides that news of the $14 billion deal could torpedo a summit between the leaders; the White House delayed the announcement and the meeting took place earlier this month in Beijing.

China is now at a standstill on follow-up visits by senior Pentagon officials and seeking to dissuade Trump from announcing the arms deal before Xi’s visit to Washington in September. If successful, Beijing will surely continue to argue that the sale should be further postponed or reduced. China feels strong after winning the trade dispute with Trump last year. Xi is trying to turn his economic leverage into a veto on US arms sales to Taipei.

Trump, unfortunately, has made his situation worse. After his trip to Beijing, he declared that he would now negotiate arms sales to Taiwan with Xi – a direct rejection of the Six Assurances. He also argued, disconcertingly, that the root cause of instability across the Strait was not China but Taiwan.

The $14 billion arms deal thus became entangled with broader concerns. Will Trump help Taiwan defend itself or trade its security for trade deals and photo ops with Xi? Has China established enough influence to be able to dictate the terms of its relations with Washington? Will Trump pursue policies that strengthen the United States and its allies, or will he move toward an appeasement posture that will only embolden Beijing?

Trump’s dilemma doesn’t have to turn into a disaster. In one scenario, the president will not appreciate being pushed around by Xi. At the request of Taiwan’s supporters in Congress, he will proceed with arms sales in the coming months. Or maybe the administration will sweeten the pill without diluting the medicine — dividing the $14 billion into several smaller tranches.

Either way, the result would be the approval of some $25 billion in U.S. arms sales over about a year. Trump will have shown that he can dialogue with Xi without giving in to Chinese pressure.

But there is also a darker scenario, in which the $14 billion package remains stuck in limbo indefinitely, while Trump – ever the dealmaker – makes a habit of negotiating arms sales to Taiwan with Xi. The longer this goes on, the more China will be encouraged to issue new demands, and the more Trump’s hesitation risks causing a dangerous crisis of confidence in Taipei.

As Taiwan’s January 2028 presidential election approaches, US ambivalence could strengthen voices advocating accommodation toward Beijing. like that by Cheng Li-wun, chairman of the opposition KMT party. US allies in the region may conclude that Trump’s Washington, intimidated by China, will not even help its US partners help themselves. For better or worse, this arms sale has become critical to America’s position in the Western Pacific, as it will reveal much about Trump’s willingness to stand up to Beijing.