The EU-Taiwan Tightrope: Balancing PRC Pressure, U.S.-China Rivalry, and Trump’s Unpredictable Foreign Policy

Category: Big Picture Perspectives | Sub-category: Hidden Connections

The European Union and Taiwan are forging an increasingly vital relationship, one that thrives despite the shadow of China’s geopolitical pressure and the ripple effects of U.S.-China competition. As Donald Trump’s second presidency unfolds, his transactional and often unpredictable foreign policy adds another layer of complexity to this delicate dynamic. For the EU, Taiwan is not just a democratic partner but a linchpin in global supply chains, particularly semiconductors. Yet, navigating this relationship requires walking a diplomatic tightrope, balancing economic interests, shared values, and the risks of antagonizing Beijing—all while adapting to Washington’s shifting priorities. This blog post explores the hidden connections shaping EU-Taiwan ties and what they reveal about the broader geopolitical landscape.

The Growing EU-Taiwan Bond: More Than Meets the Eye

At first glance, the EU and Taiwan might seem like unlikely partners. The EU does not formally recognize Taiwan as a sovereign state, adhering to its “One China Policy,” which acknowledges the People’s Republic of China (PRC) as the sole legal government of China. Yet, beneath this diplomatic formality, EU-Taiwan relations have deepened significantly in recent years. Trade and investment have surged, with bilateral trade reaching €73 billion in 2024, driven by Taiwan’s dominance in semiconductor production. Taiwan supplies over 60% of the world’s chips, critical for everything from cars to smartphones, making it an indispensable partner for Europe’s tech-driven economies.

Beyond economics, shared democratic values and concerns about China’s growing assertiveness have drawn the EU closer to Taiwan. The European Parliament has passed resolutions condemning PRC coercion in the Taiwan Strait and calling for stronger ties with Taipei. For instance, in 2024, the EU voiced concerns over China’s blockade-style military drills near Taiwan, emphasizing the need to preserve the status quo. These moves signal a shift: Europe is increasingly prioritizing Taiwan’s security and resilience, moving away from its earlier focus on China as a primary trade partner.

PRC Pressure: The Elephant in the Room

China’s influence looms large over EU-Taiwan relations. Beijing views Taiwan as a breakaway province and has intensified its “gray zone” tactics—short-of-war measures like cyberattacks, economic coercion, and military exercises—to pressure the island. In 2024 alone, Taiwan reported thousands of daily cyberattacks from mainland China, while Chinese coast guard vessels patrolled near Taiwan’s outlying islands like Kinmen and Matsu. These actions aim to erode Taiwan’s resolve and deter international support.

For the EU, engaging with Taiwan risks provoking China, a major trading partner. The EU’s trade with China dwarfs its trade with Taiwan, with China accounting for €400 billion in goods annually. Beijing has not hesitated to punish countries that deepen ties with Taiwan—Lithuania faced trade restrictions in 2021 after allowing a Taiwanese representative office in Vilnius. Yet, Europe’s growing apprehension about China’s long-term ambitions, coupled with supply chain vulnerabilities exposed during the COVID-19 pandemic, has pushed the EU to diversify its partnerships. Taiwan, with its technological prowess and democratic governance, is a natural ally in this shift.

U.S.-China Competition: A Double-Edged Sword

The intensifying rivalry between the United States and China places Taiwan at the heart of global geopolitics, complicating the EU’s balancing act. The U.S. has long been Taiwan’s primary security partner, providing billions in arms sales under the Taiwan Relations Act of 1979. During Trump’s first term, the U.S. approved $18 billion in arms sales to Taiwan, including advanced fighter jets, and passed laws like the Taiwan Travel Act to facilitate high-level visits. These moves strengthened U.S.-Taiwan ties but also heightened tensions with Beijing, which condemned them as violations of the “One China” principle.

For the EU, U.S.-China competition presents both opportunities and challenges. On one hand, aligning with the U.S.—a key security partner through NATO—reinforces shared democratic values and supports Taiwan’s resilience. The EU’s strategic interests in the Indo-Pacific, particularly in securing semiconductor supply chains, align with U.S. efforts to counter China’s technological ambitions. On the other hand, the EU risks being caught in the crossfire of U.S.-China escalation. If tensions over Taiwan escalate, Europe could face economic fallout, including disruptions to trade with China or access to critical technologies.

Trump’s Foreign Policy: A Wild Card

Donald Trump’s return to the White House in 2025 introduces significant uncertainty. His “America First” approach, characterized by transactional diplomacy and a skepticism of multilateral alliances, could reshape U.S.-Taiwan relations—and, by extension, EU-Taiwan dynamics. During his first term, Trump’s policies were broadly supportive of Taiwan, but his rhetoric often suggested a transactional view, accusing Taiwan of “stealing” U.S. semiconductor jobs and demanding higher defense contributions. In 2024, Trump hinted at tariffs of 150–200% on China if it moved against Taiwan, yet he avoided committing to military defense, maintaining the U.S. policy of strategic ambiguity.

Trump’s second term could push Taiwan to increase its defense spending—currently around 2.5% of GDP—to levels closer to his reported demands of 10%. Such pressure could strain Taiwan’s economy and create friction with the EU, which relies on Taiwan’s semiconductor exports. Moreover, Trump’s focus on negotiating economic deals with China raises concerns that Taiwan could be used as a bargaining chip. Some analysts fear Trump might prioritize trade concessions from Beijing over Taiwan’s security, especially given his comments about negotiating directly with China’s Xi Jinping.

For the EU, Trump’s unpredictability complicates strategic planning. His push for tariffs on imported chips, including those from Taiwan, could disrupt Europe’s access to critical technologies, prompting the EU to deepen trade ties with Taiwan or explore alternatives with China. Additionally, Trump’s warming relations with Russia and potential reduction of U.S. support for Ukraine could strain the transatlantic alliance, forcing the EU to adopt a more autonomous stance toward Taiwan to avoid being drawn into a U.S.-China conflict.

Hidden Connections: The Broader Geopolitical Web

The EU-Taiwan relationship is a microcosm of broader geopolitical shifts. First, it reflects the growing importance of technology in global power dynamics. Taiwan’s dominance in semiconductors makes it a critical player in the EU’s quest for “strategic autonomy” in supply chains, reducing dependence on both the U.S. and China. Second, it underscores the tension between economic interests and democratic values. The EU’s cautious support for Taiwan—through trade agreements and parliamentary resolutions—signals a shift toward prioritizing shared ideals over purely economic ties with China.

Third, the EU’s approach to Taiwan reveals the fragility of the transatlantic alliance under Trump. If the U.S. pursues a more isolationist or deal-driven policy, the EU may need to strengthen its own Indo-Pacific strategy, potentially increasing military or economic support for Taiwan. Finally, China’s gray zone tactics highlight the evolving nature of warfare, where cyberattacks, economic coercion, and military posturing blur the line between peace and conflict. The EU’s response to these tactics will shape its credibility as a global actor.

Looking Ahead: A Delicate Dance

As the EU deepens its ties with Taiwan, it must navigate a complex web of pressures: China’s coercion, U.S.-China rivalry, and Trump’s unpredictable policies. Strengthening economic and technological cooperation with Taiwan—perhaps through a bilateral investment agreement—could enhance Europe’s resilience without overtly provoking Beijing. At the same time, the EU must maintain open channels with China to avoid economic retaliation while reinforcing its alignment with the U.S. on shared security goals.

Taiwan, for its part, is not a passive player. Under President Lai Ching-te, Taiwan has bolstered its defense capabilities and sought to diversify its international partnerships, including with the EU. Its 2025 defense budget of $19.74 billion reflects a commitment to self-reliance, though it remains heavily dependent on U.S. support. The EU’s role as a complementary partner—through trade, technology, and diplomatic backing—could prove critical in helping Taiwan withstand PRC pressure.

Conclusion: A High-Stakes Balancing Act

EU-Taiwan relations are a fascinating case study in navigating competing global forces. The EU’s growing engagement with Taiwan reflects a strategic pivot toward securing critical technologies and upholding democratic values, but it comes with risks. China’s coercive tactics, the U.S.-China rivalry, and Trump’s transactional foreign policy create a volatile environment where missteps could have far-reaching consequences. By deepening ties with Taiwan while maintaining diplomatic agility, the EU can play a pivotal role in preserving stability in the Taiwan Strait—and in shaping the future of global geopolitics.

Thought Questions:

1. How can the EU balance its economic reliance on China with its growing strategic partnership with Taiwan?

2. What are the risks of Trump’s transactional approach to Taiwan, and how might it impact the EU’s Indo-Pacific strategy?

3. Could the EU’s push for “strategic autonomy” in technology and security lead to a more independent stance on Taiwan, or will it remain tethered to U.S. policy?