Transactional diplomacy and strategic ambiguity on Taiwan
Why it matters: This transactional diplomacy signals US leverage across domains, shaping expectations and managing great-power dynamics.
- Donald Trump's public remarks on Taiwan arms sales with Xi Jinping sparked concerns of betrayal, yet the policy record shows continuity in US commitments.
- The US administration reaffirmed its commitments under the Taiwan Relations Act, with a December 2025 arms package proceeding and existing contracts remaining in production queues.
- Delays in arms deliveries for systems like HIMARS and Harpoon missiles are attributed to limited production lines and US replenishment needs post-Ukraine aid, not diplomatic hesitation, with a backlog of $32 billion as of January 2026.
- Transactional diplomacy is employed by the US, linking Taiwan arms deliveries, tariffs, and technology controls within a broader bargaining framework to remind Beijing of US leverage across domains.
- The US-Taiwan Reciprocal Trade Agreement further integrated economic commitments with strategic cooperation, reducing tariffs on Taiwanese goods while securing significant purchases from Taipei, strengthening supply chains and defense ties.
Despite initial alarm over Donald Trump's public discussion of Taiwan arms sales with Xi Jinping, US policy toward Taiwan remains consistent, reaffirming commitments under the Taiwan Relations Act and moving forward with existing arms packages. This seemingly ambiguous approach is a deliberate strategy to preserve negotiating space ahead of key summits while leveraging transactional diplomacy across economic and strategic domains.
