The approval by the Biden administration of the first ever US military transfer to Taiwan under a programme typically reserved for sovereign states is a significant diplomatic and strategic development. This decision comes on the heels of 50 years of formal diplomatic relations between the USA and China, high lighting the complexities and sensitivities surrounding the Taiwan issue. Underpinning this development is the Taiwan Relations Act, enacted in 1979, which obliges the USA to supply Taiwan with the necessary weapons for its defence. Historically, these transfers have occurred through trade agreements rather than direct aid, reflecting the delicate balance that America has tried to maintain between its relationship with China and its commitment to supporting Taiwan. Crucially, the USA has been at pains to emphasise that this military aid does not constitute a change in its official policy on Taiwan’s sovereignty. The USA remains committed to its longstanding One China policy, which asserts that it does not formally recognize Taiwan as an independent nation. Instead, the USA views its support for Taiwan as a means to help the island maintain selfdefence capabilities, in line with the Taiwan Relations Act.

The decision to provide military aid under the Foreign Military Financing (FMF) programme to Taiwan is likely to further escalate tensions between the USA and China. Beijing views Taiwan as an integral part of its territory and has consistently opposed any arms sales to the island. This move could strain an already complex bilateral relationship. From a strategic standpoint, the USA aims to maintain stability in the Indo-Pacific region. By supporting Taiwan’s defence capabilities, it can deter potential aggression and contribute to regional security. This aligns with the broader US commitment to ensuring a free and open Indo-Pacific. Taiwan’s growing importance in global supply chains, particularly in semiconductor manufacturing, cannot be overlooked. Taiwan is home to TSMC (Taiwan Semiconductor Manufacturing Company), a major player in semiconductor production. Given the semi conductor’s critical role in various industries, including technology and defence, supporting Taiwan’s security could indirectly safeguard vital supply chains.
While the USA has not explicitly linked its decision to Taiwan’s economic role, trade and economic factors often influence foreign policy decisions.

Taiwan’s position as a significant trading partner, especially in the tech sector, would have played a role in the decision. Ensuring Taiwan’s security could be seen as a way to protect these economic interests. The USA’s decision to provide military aid under FMF to a non-nation state, following a similar instance involving the African Union, reflects the evolving dynamics in international relations. It demonstrates the USA’s willingness to adapt its policies to address contemporary challenges while navigating a delicate balancing act in its relationships with China and Taiwan. This development underscores the complexities and sensitivities surrounding Taiwan, which continues to be a flashpoint in global geopolitics.