What the U.S. – Taiwan Relationship Tells Us About Global Power Today
Bureau of East Asian and Pacific Affairs
May 28, 2022
A Key Partnership in the Indo-Pacific
Taiwan stands out as both a vibrant democracy and a technological leader in the Indo-Pacific. While the United States does not formally recognize Taiwan diplomatically, the relationship between the two remains strong and dynamic. Shared values, deep economic ties, and strong cultural and social connections have made Taiwan one of America’s most important unofficial partners in the region.
Much of this partnership is facilitated through the American Institute in Taiwan (AIT), a nonprofit organization designated to manage unofficial U.S. – Taiwan relations under the Taiwan Relations Act. Cooperation has grown across critical areas like trade, health, semiconductors, technology, education, and democratic engagement.
A Longstanding and Stable U.S. Policy
U.S. policy toward Taiwan has been remarkably consistent over the decades, regardless of administration. It is rooted in the one - China policy, shaped by the Taiwan Relations Act, three U.S. - China Joint Communiques, and the Six Assurances. While the U.S. does not support Taiwanese independence, it firmly opposes any unilateral moves to change the status quo across the Taiwan Strait and emphasizes that cross-Strait differences must be settled peacefully.
In line with the Taiwan Relations Act, the U.S. continues to provide Taiwan with defensive support to maintain its ability to defend itself. Washington also maintains the capacity to counter any coercive force that would threaten Taiwan’s security, economy, or social fabric.
Foreign Representation: Unofficial, But Essential
Although there's no formal embassy, AIT handles a wide range of consular and citizen services similar to a diplomatic post. It operates under a contract with the U.S. Department of State and receives significant funding for its work. The current director, Sandra Oudkirk, is based in Taipei, while James Moriarty serves as AIT's chairman.
Taiwan, in turn, maintains its presence in the United States through the Taipei Economic and Cultural Representative Office (TECRO) in Washington, DC, along with several branch offices (TECOs) across the country.
Deep and Growing Economic Ties
Taiwan’s economy is among the most advanced in Asia, generating nearly $786 billion in 2021 alone. The economic relationship with the United States has only grown stronger. Joint efforts under AIT and TECRO have led to initiatives like the Economic Prosperity Partnership Dialogue, which focuses on key areas such as health, science, digital development, supply chain security, and investment screening.
Taiwan ranks as the eighth-largest trading partner of the U.S., while the U.S. is Taiwan’s second-largest. In 2019, U.S. exports to Taiwan helped support around 188,000 American jobs. The Trade and Investment Framework Agreement (TIFA) continues to serve as a foundation for bilateral economic dialogue.
Taiwan’s total investment in the U.S. reached nearly $137 billion in 2020, with direct investments concentrated in manufacturing, trade, and finance. These investments support more than 21,000 jobs and over $1.5 billion in American exports.
Science and Technology: A Forward-Thinking Alliance
In 2020, AIT and TECRO signed a formal agreement to strengthen joint research and scientific cooperation. The U.S. and Taiwan now collaborate across a wide spectrum of scientific fields, including nuclear energy, environmental protection, public health, atmospheric research, and cancer studies.
People-to-People Connections That Matter
The bond between the American and Taiwanese people remains strong. By 2019, visits from Taiwan to the U.S. had increased by 70% since Taiwan joined the U.S. Visa Waiver Program in 2012. Taiwan consistently ranks as one of the top sources of international students in the U.S., with over 20,000 students annually seeking higher education before the pandemic.
The U.S. also encourages American students to study in Taiwan, especially those learning Mandarin. The Fulbright Program has enabled over 1,700 people to study and teach in Taiwan and brought more than 1,600 Taiwanese scholars to the U.S. The U.S.-Taiwan Education Initiative, launched in December 2020, aims to expand these educational and cultural opportunities further.
Taiwan on the Global Stage
While Taiwan faces challenges in gaining full membership in many international organizations, the U.S. continues to advocate for its participation where possible. The two work together in several global institutions such as the WTO, APEC, and the Asian Development Bank.
In 2015, AIT and TECRO launched the Global Cooperation and Training Framework (GCTF), a platform that showcases Taiwan’s technical knowledge in areas like public health, energy, women's empowerment, disaster relief, and supply chain management. Japan joined the GCTF in 2019, and Australia followed in 2021 — highlighting Taiwan’s growing recognition and impact on global collaboration.