As Donald Trump prepares to be inaugurated as President of the US on January 20, his controversial campaign statements and post-election remarks have raised alarm among allies in Europe and Asia. Proposals such as imposing higher import tariffs, demanding increased military spending from allies, withdrawing from the World Health Organization (WHO), and even attempting to purchase or annex Greenland have left countries scrambling to assess potential impacts and countermeasures.
In Asia, nations like South Korea and Japan, where US troops are stationed, are bracing for intensified demands under Trump's leadership. Although Taiwan does not host US forces, it must also prepare for shifts in areas such as national defense, trade, technology, and industrial policies.
Japan offers a cautionary example from Trump's first term in 2017 when he demanded a fivefold increase in Tokyo's annual contribution to the costs of US forces stationed in Japan--from JPY200 billion (approx. US$1.27 billion) to JPY1 trillion. The Japanese government resisted, resulting in a stalemate until Joe Biden assumed office and negotiated a modest JPY10 billion increase. With Trump's return, this unresolved issue is likely to resurface.
Should Trump demand a significant increase in military cost-sharing again, it could strain US-Japan relations, potentially pushing Japan to explore deeper cooperation with China or improve ties with Russia. Similar pressures may confront South Korea and Germany, where US forces are also stationed, forcing these nations to reevaluate their strategic positions.
Experts believe Trump's primary geopolitical rival in his second term will be China, whose economic, technological, and military capabilities surpass those of Russia. For Trump to counter China effectively, Asian allies such as Japan, South Korea, Taiwan, and the Philippines are critical. However, if these nations refuse to yield to excessive US demands, they could be driven closer to Beijing, undermining Trump's Indo-Pacific security strategy.
Vietnam, Mexico, and Taiwan, which all benefited from supply chain restructuring during Trump's first term and the US-China trade war, might also face new challenges. While Trump's initial policies slightly reduced China's manufacturing dominance, they failed to boost domestic production in the US, instead benefiting countries like Vietnam, Mexico, and Taiwan.
To strengthen its bargaining position, Japan is proactively rebuilding economic ties with China, and reintroducing agricultural and seafood exports to the Chinese market. Both Japan and South Korea have resumed free trade agreement (FTA) negotiations with China and are engaging in high-level economic dialogues. For South Korea, managing the North Korean threat requires China's influence. These developments suggest that "Trump 2.0" could inadvertently push US allies closer to its strategic rival.
A similar dynamic is unfolding in Europe, where leaders such as German Chancellor Olaf Scholz have expressed strong opposition to Trump's policies.
If Trump's return deepens economic and trade ties between China and key US allies such as Japan and South Korea, Taiwan will face unprecedented challenges. Strategic reliance on Japan in regional conflicts may prove unrealistic. How should Taiwan balance competing pressures from the US and China? What bargaining chips does Taiwan hold in managing its relationship with Washington?
Domestically, Taiwan's ruling party holds a minority in the Legislative Yuan, complicating the implementation of the Executive Yuan's policies. As President Ching-te Lai grapples with navigating relations with both the US and China, the road ahead promises significant challenges for Taiwan's government.