Taiwan at the Crossroads: The Trump-Xi Summit and a New Indo-Pacific?

US President Donald Trump is set to visit China from May 13 to 15 for the Trump-Xi Summit, amid recent tensions on tariffs, the US’s sanctions on five Chinese refineries for purchasing Iranian oil and the new Chinese anti-sanctions law asserting that these sanctions “shall not be recognised, enforced or complied with”.

Illustration by The Geostrata

Although President Trump sought to ease these tensions with his new Board of Trade proposal to resolve trade-related issues and pulled back restrictions on the export of semiconductor technology, such as electronic design automation (EDA) software, to China (especially to secure Washington's rare earth supplies), the main focus circles around Taiwan, the island democracy located roughly 180 km off the coast of China.

In a recent phone call with US Secretary of State Marco Rubio, Chinese Foreign Minister Wang Yi warned that the Taiwan issue is "the biggest point of risk" in US-China relations and reiterated that "the Taiwan issue ​concerns China's core interests". In other words, both sides have drawn their red lines clearly before any actual efforts to find common ground.

TAIWAN STRAIT: THE FLASHPOINT OF GREAT POWER RIVALRY

The Taiwan Strait is surrounded by several geopolitical and geoeconomic dynamics. Recently, Tokyo has once again emerged as a critical player in the region under the leadership of Prime Minister Sanae Takaichi, who is known for her hardline stance on China, especially on the Taiwanese question. Months after taking charge, Takaichi's statement in the parliament on Taiwanese sovereignty as a "survival-threatening situation" for Japan, signalling the possibility of military involvement to protect Taiwan, has triggered a major diplomatic, military and economic showdown between the two nations. 

Beijing imposed restrictions on Japanese seafood exports, discouraged Chinese tourism to Japan, and tightened its rare earth exports to Japan. Militarily, Beijing flexed its hard power, partnering with Moscow in its drills near the Japanese coast. All these measures were intended to arm-twist Tokyo in both economic and military terms. This triggered a similar response from Washington and Tokyo, which held counter-military exercises in the region. 

JAPAN'S STRATEGIC SHIFT AND THE REMILITARISATION DEBATE

The regional temperature showed no signs of cooling after the 19-day Balikatan exercises jointly held by the US, Australia, the Philippines and Japan with contingents from France, New Zealand and Canada in April-May 2026. During these exercises, Japan, to strengthen its counterstrike capabilities, fired Type-88 missiles, sinking an old warship in waters between the Philippines and Taiwan, around 75 kilometres offshore in the South China Sea. This marked Japan’s first firing of an offensive missile from foreign soil since 1945, signalling a major and rapidly evolving shift in its military policy.

Recently, Japan also undertook a more assertive posture by relaxing its restrictions on lethal weapons exports, which were in place since 1967, paving the way for sales of Japanese-built fighter jets, guided missiles, destroyers, etc. This move was welcomed by Taiwan and regional allies, including Australia. These policy changes can be traced back to Takaichi’s political mentor and late former Prime Minister Shinzo Abe, who reinterpreted the peace clause of Article 9 in the Japanese constitution, enabling “collective self-defence”, where Japanese forces can fight alongside allies under certain conditions.

The latest move on arms exports further drew Beijing’s ire, which called it "reckless militarisation". Beijing clearly views this from the perspective of its ambitions to invade Taiwan, and the regional policy shifts only add fuel to the fire.

WASHINGTON'S POLICY OF STRATEGIC AMBIGUITY IN TAIWAN

Washington continues to maintain its strategic ambiguity when it comes to Taiwan. While it officially maintains the "one China" policy, in February 2025, the US Department of State updated its Taiwan fact sheet to remove the explicit phrase "we do not support Taiwan independence", focusing instead on opposing unilateral changes to the status quo. The US actively collaborates with Taiwan on technology, the recent one being the US-led Pax Silica initiative, along with significant military support.

In December 2025, the US announced one of the largest defence packages featuring a record $11 billion arms sale, including advanced rocket launchers, self-propelled howitzers, and missiles. In April 2026, the US House Appropriations Committee advanced a 2027 national security spending bill allocating at least $500 million in Foreign Military Financing (FMF) for Taiwan and $200 million in military assistance for the Philippines. 

However, the US is certainly wary of its economic interdependence with China, and any escalation may further deteriorate the supply chain resilience. That's the main reason for the Trump administration's sustained efforts to ease tensions and reduce friction with Beijing. Last year, in his bilateral summit with his Chinese counterpart in Busan, President Trump went a step further, proposing his idea of G-2, a move indicating China as an equally competent global power and displaying Washington's urge to manage this competition in a sustainable manner.

This momentum, however, did not sustain owing to continued economic and geopolitical rivalries in the Indo-Pacific as well as the Western Hemisphere, where China continues to expand its geopolitical footprints, and also recently criticised Washington's maritime and energy blockade of Cuba.

THE INFO-PACIFIC THEATRE: CONVERGENCE OF GEOECONOMIC RISKS, POWER AND COMPETITION

The Indo-Pacific is crucial for several reasons: it accounts for 60 per cent of global GDP, over 50 per cent of global trade and 40 per cent of crude oil passes through the region. It is also home to 60 per cent of the world’s population and hosts strategic sea lanes of communication (SLOCs) and vast reserves of cobalt, copper, nickel, rare earth elements, and other critical minerals. Taiwan is critical for semiconductor supply chains and is popularly known as the semiconductor factory of the world.

All these factors drive the US's policy initiatives in the region, some of which have been dubbed as “anti-China” or “cold war mentality" by Beijing. 

These include regular Freedom of Navigation Operations (FONOPs) by the US and its allies, military pacts like AUKUS, the trilateral security partnership between Australia, the UK and the US, comprehensive security forums like the QUAD, and allied military exercises like the recent Balikatan, RIMPAC, REFORPAC, etc. These actions have been increasingly inviting hostile reactions from China, which often unleashes its wolf warrior diplomacy attacking the West. 

Simultaneously, to overcome supply chain vulnerabilities, Washington is rapidly making moves to build on reliable partnerships, the latest one being the Pax Silica initiative, a counter to the Pax Sinica. The US has created an alternative supply chain by bringing together diverse potentials of a number of countries, like the investment capacities of the UAE, Qatar, technology and innovation from Japan, Taiwan, Israel, South Korea,and talent pool from India, the UK, etc.

On the investment front, Washington is actively discouraging American investments in China. Last year, the National Defense Authorization Act was passed, with some of its provisions meant to restrict investment in sensitive technologies, ban contracts with Chinese biotech firms linked to the military, and accelerate supply chain decoupling. Notably, it also authorises up to $1 billion in security assistance to bolster Taiwan's defence capabilities.

CHINA'S STRATEGIC CALCULUS AND THE TAIWAN REUNIFICATION AGENDA

With the Trump administration moving ahead with its renewed, often unpredictable and unconventional foreign policy approach, Beijing is also carefully calibrating its responses to invade Taiwan. Beijing’s relatively toned-down response to the US decapitating Venezuelan President Maduro, its actions in Cuba and entire Latin America are not surprising, and even the American war in Iran did not trigger a hostile response from Beijing except for diplomatic condemnation.

Beijing’s main agenda behind this observed silence can be understood as its calibrated pursuit of “The Great Rejuvenation of the Chinese Nation”, which also includes acquiring Taiwan, apart from other territories, a significant component of  President Xi’s ultimate agenda of the “China Dream” (Zhōngguó Mèng).

The Chinese leader asserted that reunification with Taiwan is “inevitable” and China may use "all necessary means,” which also includes force. The recent engagement of Cheng Li-wun, chairwoman of Taiwan's opposition Kuomintang (KMT) party, with President Xi in April 2026, marking the first such high-level meeting in a decade, also indicates Beijing’s growing choices for its reunification plans, and this has triggered concerns in Taipei.  

MULTIPOLARITY AS A STRATEGIC IMPERATIVE

Washington’s military is engaged in the Middle East, and the Trump administration is increasingly distancing itself from traditional allies in Europe, thereby gradually confining itself to protect its regional hegemony in the Western Hemisphere from deepening Chinese inroads. This may raise concerns of reduced focus on the Indo-Pacific, which has also been reflected in its latest National Security Strategy. This has further pushed its allies in the region, including Japan, to bolster their indigenous defence capabilities. 

Therefore, President Trump's visit may create hopes for better stability in US-China ties; however, the underlying tensions surrounding Taiwan and China's revisionist agenda will continue to churn the geopolitical atmosphere towards a more polarised world. Therefore, it is essential for the middle powers like India, Japan, Canada and Europe to push forward the principle of a multipolar world, which is a safer option to ensure global peace and stability. As rightly said by the Canadian Prime Minister Mark Carney in his 2026 World Economic Forum speech at Davos, "Middle powers must act together because if we're not at the table, we're on the menu."

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BY HARSHITHA

COVERING MINISTRY OF EXTERNAL AFFAIRS

TEAM GEOSTRATA

info@thegeostrata.com