Trump And Taiwan: A Big, Beautiful Relationship Or The Deal Maker’s Ultimate Bargaining Chip?

Tuesday, April 8, 2025 Hoover Institution | Stanford University

The Hoover Project on Taiwan in the Indo-Pacific Region hosted Trump and Taiwan: A Big, Beautiful Relationship or the Deal Maker’s Ultimate Bargaining Chip? on Tuesday, April 8, 2025 from 4:00-5:15 pm PT at Shultz Auditorium, George P. Shultz Building.

We are only in the first quarter of the first year of President Trump’s second term, but we’ve all already experienced a dizzying pace of activity. Whole federal agencies have been shuttered, some longstanding agency core missions have been upended, and we are suddenly in a trade war with unknown consequences. Ukraine has been dumped, then courted again. Canada is threatened with annexation, Greenland with invasion. In the midst of this chaotic approach to governance, the U.S. Indo-Pacific policy is still to be defined. There are some disruptions such as new tariffs (though forecasted long ago), and the suspension of development assistance, but one could also cite policy continuity (e.g. AUKUS and the Quad) and a slew of traditional, conventional practices (e.g. leader visits with joint statements and annual military exercises). Yet absent the release of strategic documents such as a national security strategy, and absent a major address by the President or Cabinet official, the overriding feelings in the region are uncertainty and unease. This very much includes Taiwan. While Taiwan has pro-actively taken steps to earn the “right” kind of attention of the new U.S. Administration such as announcing major investments in the United States and increases to its defense budget, many critical questions remain. Are we on the cusp of a closer, stronger relationship with Taiwan with enduring commitments, or are we building trade space for President Trump’s next big deal with China? Mr. Schriver will explore these important topics based on his three decades of policy work related to Taiwan and the Indo-pacific, as well as his services as a senior official in the first Trump Administration.

Episode Transcript

>> Kharis Templeman (00:07):
Thanks everyone for coming.
It's great to see sucha good turnout today and
to our online audience as well,wherever you may be, welcome.
I am Kharis Templeman.
I'm a research fellow here atthe Hoover Institution and
it's my privilege to managethe project on Taiwan and
the Indo-Pacific regionhere at the Institution.

(00:28):
Today I get to introduce our,I think well known and
renowned speaker Randy Shriver.
He's going to be speaking about Trump andTaiwan.
And the title of his talk isA Big Beautiful Relationship or
the Deal Maker's UltimateBargaining Chip?.

(00:48):
And so we're going to unpack thata little bit today in his remarks and
in our conversation and then we'll open itup to the floor as well after we're done.
After Randy is done speaking.
I did have some introductory remarks here.
Briefly, I first want tomake an announcement.

(01:10):
We're going to have another eventin this room on Taiwan energy and
AI issues that will be this Thursday,3:30 to 5:30.
So this exact same space, you're allinvited to come to that as well.
And I also wanted topreface Randy's talk today

(01:32):
by noting that we are ina pretty a time of great
uncertainty in the US-Taiwan relationship.
We're only a quarter into the first yearof Donald Trump's second term in office,
but we've also experienceda dizzying pace of activity.

(01:52):
We've seen whole federalagencies shuttered,
some long-standing agency coremissions have been upended, and
we are suddenly in a trade war withapparently every other country
in the world with unknownconsequences to be determined.
Ukraine has been dumped andthen courted again.

(02:14):
Canada has been threatenedwith annexation,
Greenland and Panama with invasion.
And in the midst of all thischaotic approach to governance,
the US's Indo-Pacific strategyremains to be defined.
There are some disruptionssuch as the new tariffs and

(02:34):
the suspension of development assistance.
But we can also still see signs ofcontinuity and conventional practices,
including leader visits, joint statements,and annual military exercises.
But until and unless we get the releaseof strategic documents such as a national
security strategy or a major addressby the president or a cabinet official,

(02:57):
the overriding feelings in the region aregoing to continue to be uncertainty and
unease with the direction of the newadministration in the United States.
And that brings us to Taiwan, there is,in my view, no place in the Indo Pacific
with more to gain or to lose inthis administration than Taiwan.
While Taiwan's representatives havetaken proactive steps to earn the right,

(03:20):
right in quotes, kind of attentionof the new administration,
they've announced major investmentsin the United States, and
they've announced increases toTaiwan's defense budget, for instance.
They are still grappling withexistential questions right now.
Those questions include, are the US And
Taiwan on the cusp of forging a closer,stronger relationship with

(03:44):
commitments that will endure wellbeyond this current administration?
That would be the dream scenario forTaiwan.
Or at the other extreme,is the Trump administration's activity in
the region intended to create space forfor a grand bargain with China,
one that might well include US Concessionson Taiwan's fundamental security and

(04:07):
sovereignty concerns?
That is the nightmare scenario for Taiwan.
To help us understand which ofthese scenarios is more likely,
we are fortunate to havewith us today Randy Shriver.
Randy has over three decades ofpolicy work related to Taiwan and
the Indo Pacific,as well as significant experience as

(04:29):
a senior official in the firstTrump administration.
He is currently the chairman of the boardof the Project 2049 Institute and
a partner at Pacific Solutions, LLC.
And in January 2022, he was appointed as acommissioner to the US China Security and
Economic Review Commission.
He also currently servesthe commission as the Vice chairman.

(04:54):
I'm happy to say we can also claim him asa part of the Stanford community because
he serves as a lecturer forStanford's Stanford in Washington program.
He's been doing that foractually a number of years.
I think over 20 at this point.

>> Randy Shriver (05:07):
Yeah, 21.

>> Kharis Templeman (05:09):
21.
And in addition to that work,
he's on the board of advisors tothe Sasakawa Peace Foundation USA and
the board of directors ofthe US-Taiwan Business Council.
With that introduction, I think I'll justturn it over to you, Randy, and kind of
lay out your vision or your view of whereyou think the Trump administration is

(05:33):
headed over the next four years in theIndo Pacific and how it relates to Taiwan.

>> Randy Shriver (05:38):
Great, thank you Kharis.
Really appreciate the invitation andthe hospitality and the wonderful weather.
Not only do I have a role with Stanfordin Washington, but I did a couple years
of allegedly getting a PhD here atStanford, didn't quite work out.
But I can tell you on a day like this,it probably would
have been unlikely you'd find me ina lecture hall such as this right now.

(06:02):
So I appreciate everybody sacrificinga good couple of hours of
this wonderful weather toparticipate in this conversation.
Yes, a big, beautiful relationship orbargaining chip.
Now, to some extent,
many of you will understand the pressuresof when somebody asks you for a title and
a topic and you're still on that day'sinbox so you've got to produce something.

(06:27):
But I think it does reflect reallythe broad spectrum of where things could
land in this relationship,depending on how some key decisions go.
So I will try to give youan assessment of where I think we are,
but I think more importantlythe trajectory and
where things may go throughthe course of this administration.

(06:47):
I think it's first thing you have tosort of put it in context of what
the administration's priorities are andwhat their focus is.
And certainly a lot of thatdominates every news cycle, but
to sort of cut throughsome of that noise and
try to describe what they wouldsay their priorities are.

(07:07):
Clearly they're interested in reformingand reshaping the federal government,
federal bureaucracy.
We've all seen reports of the massivecuts in some of the agencies,
I will say, related to Taiwan and China.
To the extent any agency has articulatedwhat areas might be insulated or
safe, they've always madea point to say work on China.

(07:31):
Competition work in the Indo Pacificwill remain the priority area.
And I've seen that play out to date,that those are people that
have been protected so far,including probationary workers.
I won't mention names.
I don't want to draw attention to anybody,but this is clearly occupying a lot of
the President's attention andthe administration's attention.

(07:54):
And if you live in a one industry town,as I do, it's a pretty heavy feel in.
Washington right now, it's hard togo to a store or your kids school or
a church without running into somebodywho's either lost their job or
is concerned about losing their job.
So it's a pretty heavy feel.
But again, the supposed reforming and
right shaping of the federal government,there is an intention to insulate

(08:18):
the very important work on competitionwith China and the Indo-Pacific.
There's a clear interest in reshapingAmerica's role in the world
when it comes to the global tradingsystem with a stated goal of trying
to contribute to reindustrializationof the United States and

(08:38):
regaining an aspect of oureconomic foundation that has
been greatly diminishedover the last few decades.
And that's primarily found in the tariffpolicies, but other policies as well.
That hits Taiwan directly, of course.
32% tariffs have been announced,

(08:58):
which is some calculation of tariffs andnon-tariff barriers to trade.
A little bit of mystery on howsome of this is calculated, but
that seems to be the numberwe're working with.
Clearly an interest in border security and
work in the Western Hemisphere anda reorientation of the Department of

(09:20):
Defense core missions toinclude border security,
which may not seem directly on pointrelated to the Indo-Pacific and Taiwan.
But that requires resources anddiversion of everything from
training to perhaps the train andequip missions being affected.
So there could be second,third-order knock-on effects.

(09:42):
But there has been this stated impactintention to keep the Indo-Pacific
a priority theater and to keep the Chinachallenge as the pacing challenge.
And I think that's quite important,particularly if it's
implemented faithfully andupheld in the administration.
Now, some of that looks a little differentthan in previous administrations.

(10:04):
It's, I think, the third administrationin a row that has said the Indo-Pacific
is the priority theater.
Sometimes just saying it doesn'talways look like it in actions and
when you have stuff happen in the worldthat requires response and attention.
But I think this administration meansit not only in the sense of this is
really the one challenge that couldpotentially be existential, or

(10:29):
if not existential, extremely impactfulon our way of life and our existence.
But that also means tradeoffs and
reprioritization perhapsaway from other areas.
So when this discussion aboutthe US support for NATO,
this discussion about US support for evenUkraine to be even more on point here,

(10:50):
when particular officials sayin this administration, and
you wanna draw parallels or inferenceswhat that might mean for Taiwan.
I think one has to be a little bit carefulto think that just a decision to maybe
have a diminished role in one theaterwould mean the same for another.
And I do think we need to watch carefullyto see if what they're actually

(11:13):
implementing is a tradeoff in terms ofprioritization and reprioritization or
if it's something moresignificant than that.
So that's certainly a space to watch.
Now, as you said, Taiwan is reallyin a precarious position right now,
not only because of the uncertaintiesof the administration's policies, but
they're experiencing a great deal ofcoercion and pressure from China.

(11:37):
We just came through another setof very provocative exercises.
I think the numbers I sawover 160 aircraft in and
around Taiwan, 40 or so surface vessels,
combination of PLA, Navy,Coast Guard, maritime militia.
So a very high level of activityin this set of exercises,

(11:59):
which I would say is on top of whathas become a new normal in terms of
regular ops tempo ofactivity around Taiwan.
It used to be we would get callsin the middle of the night and
woken up if there was a flight across thecenterline, and what that could mean for
the security environment in the TaiwanStrait and the broader Indo-Pacific.

(12:22):
Now, it's more than a daily occurrence.
There's multiple flightsacross the centerline a day.
So this is part of the new normal,at least since the Nancy Pelosi,
Speaker Pelosi visit of 2022,a very high ops tempo.
But that's not the only meansof pressure and coercion.
China continues to stripdiplomatic allies from Taiwan.

(12:45):
In the last couple of years,we've seen Solomon Islands,
we've seen Nauru switch theirdiplomatic recognition.
There's isolation that continuesin international organizations.
And there's rhetoric that attimes sounds as though it's
being taken to sort of newlevels of acute threat,

(13:06):
when you look at what was just saidabout Lai Ching-te being a parasite and
the, of course, repeated refusalsto announce the use of force.
But really the descriptions, almost thedehumanization of the Taiwanese leaders,
the targeting of Taiwanese officialswho they claim are pro-independence and

(13:29):
subject now to Chinese law, which couldmean arrest, could mean extraordinary
extradition, could mean anything,according to Chinese law.
So high ops tempo, a lot of verystern rhetoric and isolation.
And of course, Taiwan is at the politicallevel not really backing off.

(13:50):
In many ways, Lai Ching-te has stoodup pretty strongly responding and
reacting to the military activity.
But even on the political level,
Lai has talked about measures that Taiwanhas to take in terms of counterespionage,
counter-coercion, counter-Chineseinfluence in Taiwan.
So it is a very sporty situation,let's say, in the Taiwan Strait.

(14:17):
Now, again, trying to understand wherethe Trump administration is now and
going forward in the absence ofthe national security strategy,
national defense strategy, the speeches.
It's a little bit of reverseengineering of what we're seeing, but
I think there's some other things we canpoint to, and I'll just tick off few.
I do think the first term,we need to look at that record and

(14:39):
understand not that the second term2.0 is going to be a carbon copy, but
I think it can inform what ourexpectations are for the second term.
And I think the first term, at the riskof sounding a little self-serving,
was fairly strong in terms of investmentin the US-Taiwan relationship.
Security assistance,
we had more arms sales to Taiwan inthe first term of the Trump administration

(15:02):
than any previous US administrationsince the break of relations in 79.
That includes administrationsthat were two terms.
So more arms sales to Taiwan in fouryears than any previous administration,
including those that were eight years.
Higher level visits.
I personally accompanied Keith Krach whenhe visited Taiwan as Under Secretary of

(15:22):
State for Economic Affairs toattend Lee Teng-hui's Memorial.
That was the highest levelState Department visit we'd had
since the break of relations,in many ways mirrored across the agencies.
We at DOD began to send our DeputyAssistant Secretary of Defense regularly,
which is a practice that has continued.
So high level visits,support in international organizations.

(15:45):
Counter-isolation, measuresnot always successful.
Remember Vice President Pence calledthe president of the Solomon Islands and
said please, please, don't do this,and do as we say, not as we do.
Cuz, of course, we switched ourdiplomatic relationship in 1979, but But
Solomon Islands proceeded with that.
But it did include efforts on the part ofthe administration to counter that and

(16:10):
try to keep Taiwan's diplomatic space.
And in many ways, I would say it wasa strong record of supporting Taiwan.
Not that there weren't perturbations andquestions and
various anxiety is along the way, butI think in total, a fairly good record.
So I think that's numberone thing to look at.

(16:31):
Number two, look at the peoplethat have been appointed.
And I think I haven't checkedthe news today, but as far as I know,
we still have some very,very strong Asia hands and
longtime supporters ofUS Taiwan relations.
People like Alex Wong at the NSC,Ivan Kanapathy at the NSC,
we have Secretary Rubio himself andhis counselor, Mike Needham.

(16:55):
We have National Security Advisor Waltz.
These are all people that I would sayare traditionalists when it comes to
supporting partners and allies andvery strong supporters of Taiwan.
You know, sometimes that canbe undone with a single tweet.
Sometimes that can change in a newscycle when there's personnel changes.
But I think the intentional choicesmade at the front end of this

(17:19):
administration reflect wantingto build a team that's
going to be strong in termsof supporting Taiwan.
I think beyond people, beyond, you know,
what we can glean from the first term,there are some early signs of how
the administration isgoing to orient on Taiwan.
We've seen some early policystatements in the forms of

(17:41):
executive orders,some of which not exactly on point, but
certainly imply important things forTaiwan.
For example, the executiveorder on investment security,
I think was a very importantdocument that talks about not only
strengthening the export controlsin some of the areas that

(18:03):
are well known to people in this room,advanced semiconductors and
related equipment, butalso outbound investment in general and
what entities and what types ofinvestments they're allowed to support.
You know, for many people, it makes nosense that we're going to, through a CFIUS
process, say China cannot invest into aparticular US Entity that's doing research

(18:27):
in a particular area because itmight have military applications.
But we're going to allow U.S. capital toinvest in a Chinese entity that's doing
the exact same research,exact same military applications.
So that eo, among other things,intends to tighten that up.
And I think that has positiveimplications for Taiwan.
You know, there were the wording changeson the State Department website,

(18:50):
which probably nobody would have noticedhad China not complained vociferously.
So the State Department removed the lineon the website saying we do not support
Taiwanese independence, and then there'swhat the President has said himself.
There was quite a bit of reaction toPresident Trump's comments when asked,

(19:10):
you know, would the US Come to Taiwan'sdefense in the event it were attacked?
And I don't remember the exactformulation, but in Trumpian fashion,
he said something to the effect,well, I'll never reveal my hand.
I won't,I will never say the answer to that.
I wouldn't want to forecast that.
And it seemed a departure fromPresident Biden's not once,

(19:32):
not twice, not three times,but four times.
We will defend Taiwan, but
in fact, it's a reversion totraditional strategic ambiguity.
No US President up untilPresident Biden had said,
we will definitely defendTaiwan in all circumstances.
In fact, long standing policyhad been strategic ambiguity.

(19:54):
So, yes, there's Trump characteristicsto it, but I would say
that's a reversion to longstandingpolicy with respect to ambiguity.
I think there's a series of thingsthat show prioritization of the Taiwan
relationship and the Indo Pacific inareas that, that are being cut elsewhere.

(20:16):
So, you know, what are the biggest changesin the Trump administration to the region?
I would say it's cutting of foreignassistance, development assistance, and
the tariffs.
Well, guess who got some exemptionson the foreign assistance?
Taiwan for foreign military financing,Philippines for
foreign military financing andother types of assistance.

(20:37):
Other carved out types ofassistance from USAID.
So I think what's shaping up is an effortto insulate these very important
relationships and this very importantwork on deterring China when it comes
to even the various tools that are goingto inevitably be pulled back and
diminished, like the foreignassistance account.

(21:00):
I would say also thatthe work that's done in and
around Taiwan related to partnerships andalliances, and
you mentioned a couple of thingsin your opening statement.
Pretty strong.
Secretary Rubio on his first day,the 21st of January, what does he do?
He hosts the quad meeting with Australia,Japan and India.

(21:22):
And what do they do at the quad meeting?
Very much with Foreign MinisterJaishankar's approval, they talked about
moving more into security issues andmilitary cooperation in the quad.
I think that's pretty significant.
I think when Prime Minister Sheba visitedWashington, if you read the joint
statement, which maybe people in thisroom would, most people wouldn't.
It's nerdy inside baseball stuff.

(21:43):
But that joint statement, if you hadn't,if I hadn't known better,
I would have thought you had just givenit to the Japanese team and said,
go in the room andwrite your dream joint statement.
And you know we'll see if wecan deliver on part of that.
We delivered on all of it.
The joint statement was a completeendorsement of all the changes to
command and control.

(22:05):
It was a complete endorsement of Japanmoving into the direction of counter
strike and the associated doctrine androles and missions discussion.
It was an endorsement of cooperationin the southwest island chain.
Footstomp that.
Where's the southwest island chain?
It's right next to Taiwan.
Yonaguni is actually closest foreigncountry to Taiwan is not China.

(22:28):
It's actually Japan throughthe southwest island chain in Yonaguni.
So it's a fabulous statement.
Look at the ongoing work with thePhilippines to continue the investment in
the Enhanced Defense Cooperation.
Agreement sites now up to nine sites.
So I would say, yes, there are certainlyquestions about the overall trajectory.

(22:54):
Will this be sustained?
Will this be continued?
I think the early signs are quite positivein terms of work with partners and
allies in the Indo Pacific.
Taiwan, of course, you know,I've traveled there recently.
You were there ten days ago.
The overwhelming sentiment is, I wouldsay, anxiety and probably not helped

(23:15):
by the tariff announcement of 32%,which was subsequent to our visits.
But they are thinking through, you know,how to position themselves to keep
up their end of the bargain of beinga strong partner for the United States,
how they can be a good regional andglobal citizen.
And they're starting toroll out various proposals,

(23:36):
some of which are moreadvanced than others.
You mentioned some of them.
Taiwan has said they will spend up to 3%of GDP on defense, and has added to that,
that that is a floor, not a ceiling,that they intend to go higher.
Now there is the little matter ofthe Legislative Yuan and whether or
not they will go along with that.

(23:57):
And right now they have frozenparts of the defense budget.
And are causing some difficulties.
But there is every intention to pushforward, as I understand it, with
a special budget, special military budget,probably fall time frame, September,
October, to get them up to that 3% level,that's, I would say, pretty significant.

(24:18):
You mentioned the investment, somore investment from TSMC, which is,
by the way, not done withoutpolitical cost and risk in Taiwan.
Lai Ching-te and his team are beingaccused of letting the United States
hollow out Taiwan's key industry, andreally the key, in the minds of many,

(24:39):
their sort of protector of having thisprized role in the global supply chain.
But nonetheless,
they're talking about very significantinvestments in the United States to help
with the goal of bringing more chipmanufacturing back to the United States.
I think that's very significant.
Their role in regional andglobal citizenship.

(25:01):
I mentioned in some instances there may bethings that would get less attention and
be valued highly by this administration.
But worth mentioning,
Taiwan has been a major supporter ofUkrainian refugee assistance in Poland.
That's significant.
But the ongoing work inthe Pacific Islands,
particularly if the United States is goingto cut back on some of our programs,

(25:26):
USAID and the like, you know,out of its diplomatic allies.
Three key partners remainin the Pacific Islands.
Let me see if I can.
Marshall Islands, Palau and Tuvalu->> Kharis Templeman: Yes.
I believe, that should not be discounted.
And certainly that is a contested spacebetween the United States and China, and

(25:48):
Taiwan plays an oversizedrole in those places.
So I think those are certainlythings worth noting.
You know, the lingering question is,you know, is this all sort of,
as you said, building trade space forthe ultimate deal?
And I think the search for

(26:08):
the Big Deal is part ofthis president's character.
And I think it's sort of irresistibleto be on the lookout and
be always sorta searching for that space.
But things are not off to a great startwith China with Xi Jinping, particularly

(26:28):
after the tariffs and the Chineseretaliatory tariffs of supposedly 34%.
But there's no plan to meet.
If you talk to people at senior levels,they're fine to wait until
probably the fall,probably past UN General assembly meeting.
I mean, that could change,
particularly if Xi Jinping waswilling to come to Mar A Lago.

(26:50):
I think that meeting couldhappen a lot sooner.
But I think he's hoping that we'll sendour president to the emperor in Beijing,
which is how they always liketo start the relationship.
But if he doesn't come to Mar-a-Lago,I don't think we'll see, probably,
a summit meeting till after UN GeneralAssembly, so late into the year.
He didn't want the embarrassmentof what we ultimately saw,

(27:18):
a precipitous withdrawalthat involved casualties.
And then there's, you know, there's sortof the two sides of the president, right?
Yes.He's always looking for a deal.
He won't take a bad deal.
Now, caveat.

(27:39):
He's got to recognize it's a bad deal,but, you know, he won't take a bad deal.
And I represented DOD at our North Korea,various North Korean negotiations.
And I was at the summit in Singapore whenwe got a deal some said was not a great
deal, but it was a deal,got two signatures on it.
And then I was in Hanoiwhen he walked away.

(27:59):
And, you know, he walked awaybecause the North Koreans were
unwilling to give him, you know,a sufficiently attractive deal.
I also participated inthe Afghanistan work.
I would say even there, although hisimpulse was to very much get out and
very much put that behind us, you know,he was committed to a conditional

(28:21):
withdrawal and in many instances,really kind of fought, I think,
his own instincts to pull out moreprecipitously for a variety of reasons.
He didn't want to leave equipment behindand all the costs associated with that.
He didn't want the embarrassmentof what we ultimately saw,
a precipitous withdrawalthat involved casualties.

(28:44):
But even there, I think his role inoverseeing the work of Zal Khalilzad and
the team,he wasn't interested in a bad deal.
So, you know, when you look at whathe might contemplate on Taiwan,
number one,Taiwan is not his to give away.
And it's not at all clear if there wasa diminished US Security commitment that

(29:05):
Taiwan capitulates, particularly whereJapan's interests are concerned and
others interests are concerned.
But first andforemost Taiwan's own interest.
And for a lot of people,Taiwan does have value and
means something beyond just chips.

(29:25):
And I don't know that the president fallsinto that category of having affinity for
a fellow democracy, that religiousfreedom, and shares our values and
good global citizenship andregional citizenship.
He cares about geography, andif you care about that first island chain,

(29:45):
Japan, Taiwan, Philippines into Indonesia,Taiwan is in the center of it.
If you care about the second island chain,you certainly want to prevent
a pathway through the first islandchain to the second island chain.
And if you care aboutcompeting with China,
Taiwan really is the front lines of that.
So my own assessment is if Taiwancontinues to do the things it's talking

(30:08):
about doing, which is spending on defense,investing in the United States,
investing in its own resilience.
And by the way, that's another topic.
Now, there's a lot thatcould disrupt that.
That doesn't account for all the moneythey're spending on resilience,
energy resilience, communicationsresilience, civil defenses and
the hardening andthe shelters and all that.

(30:30):
You've probably seen some, probablyobserve some local exercises of people
going to shelters and things like none ofthat money is accounted for in the 3%.
That's different buckets.
So I think if they continue todo what they pledge to do and
are in the process of doing,if other countries in the region continue
to stress the importance of this,you know, in many instances,

(30:54):
what gets to the president throughthe bureaucracy is not always weighted
even as highly as things he mighthear from trusted foreign leaders.
And we know, Prime Minister Ishiba,Taiwan security is Japan's security.
We know that more and more countriescare deeply about the environment
in the Taiwan Strait,not necessarily for affinity for Taiwan,

(31:17):
but because of their prominencein the global supply chain and
the important advantages that Chinawould gain should Taiwan be lost.
So I do think the president hasan appreciation for all these things.
And when advised by the team that he has,I have a level of confidence and optimism
that we're going to remain on a trajectoryof US Taiwan relations growing stronger.

(31:41):
Now, there's a lot thatcould disrupt that.
He's saying he's gonna provide subsidiesto some of the most affected industries.
Well, he's not retaliating per se.
He's saying he's gonna provide subsidiesto some of the most affected industries.
That could Result in a counter actionfrom the Trump administration.

(32:04):
He's also saying he wants to talkabout lowering tariffs and a deal.
That's good.
But I guess what I'm saying isalong the way, you know, these are,
this is a highly transactional president.
These are highly transactionalrelationships for him.
So there will be some, I think,importance to a very steady,

(32:25):
sustained approach from Taipei toensure that that remains the case.
So I don't know if that'sa good enough way to.

>> Kharis Templeman (32:31):
That's a good start.

>> Randy Shriver (32:32):
Set the stage.

>> Kharis Templeman (32:33):
You've really done an excellent job.
So I want to pull on a couple thingsyou laid out in your remarks.
And the first is linkage.
So there's a lot of concernin Taiwan that Trump's
president Trump's approachto a bargain with China is,

(32:53):
as it is in many of hisnegotiating environments,
to link everything together andto try to take items that are typically
negotiated in a much smaller forum andtie them to one another.
And so there's worry in Taiwan thata grand bargain with China would include

(33:13):
things that have nothing to do withChina's own economic interests, but
a lot to do with Taiwan's security.
How do you see that?
And so what is this administration likelyto do if there is a conversation with
China about the friction in the US Chinarelationship and what should they do?

(33:35):
So I'm raising the possibility thatthose could be two different things.

>> Randy Shriver (33:40):
So I expect the Chinese will attempt to bring Taiwan into
virtually any conversation,
particularly if it gets to the pointof what does the big deal look like.
And I say that based on threedecades of almost every discussion
Taiwan has brought in at some point.

(34:03):
So I think if you look atthe things that we're likely to ask
from the Chinese,it's going to be very hard for China.
And the president livedthrough phase one trade deal
which was basically a Chinesepledge to buy a lot more US Stuff.
And it wasn't honored,it wasn't implemented.

(34:25):
The little matter of COVID ofcourse was the major disruptor to
that nonetheless wasn't honored.
And that didn't even get us to a phasetwo trade deal which was going to
be the harder structural reforms,removing a lot of the non tariff
barriers to trade which inChina's instance are everywhere,

(34:47):
regulatory currency manipulation,their own internal investment constraints.
So, you know, I think, although again,the president is susceptible to look for
the big deal, what is going to be askedof China is going to be to be very,
very difficult.
And the things that, you know,

(35:08):
another president might ask for, you know,Biden administration spent a lot of
time asking the Chinese to pull backsupport for Russia in the war in Ukraine.
I doubt that's going to bea prominent feature here.
So I just.
The way I imagine it unfolding,it's going to be difficult for
the Chinese to make credible,meaningful pledges in exchange for

(35:28):
the President to do something on thatdoesn't even answer the question.
What's that?Something, you know, suspending arms sales
or making a more explicitstatement regarding US Support for
Taiwan in the event of a contingency thatwe wouldn't come to Taiwan's defense.
It just seems that falls in thatcategory of a bad deal that I don't

(35:49):
think the President wouldbe inclined to take.

>> Kharis Templeman (35:52):
That's reassuring.
In fact, I'm struck by confidence andoptimism here.
You mentioned that a couple of times.
I'm feeling a little bitbetter about things.

>> Randy Shriver (36:05):
I could give you my other version of speech, which.

>> Kharis Templeman (36:09):
So I wanted to raise another question
about Beijing which is the thirdtriangle of this relation or
third corner of thistriangle relationship.
Beijing's Taiwan strategy, to my mind,
hasn't really changeda whole lot since 2016.
They've incremented up, but
it's been basically the same approachto the Taiwan folks and to the US and

(36:32):
so I wonder if you share that view and ifyou could tell us what you think Beijing
is trying to accomplish withthe heightened activities around Taiwan.

>> Randy Shriver (36:42):
Yeah, I do.
There's a real lack of imagination there.
It's the same toolkit, the same tools thatseem to be applied in greater amounts or
greater weights orwhatever the right term would be.
I do think we've got to be careful ofassessing the success or failure of

(37:03):
Beijing's approach from our perspectiveversus what Beijing might be seeing.
And yes, we have a third DPPadministration in a row.
That's probably not great fromBeijing's perspective, but
from Beijing's perspective also,what do they see?
The LY is thrown basicallyinto chaos because

(37:26):
there's no outright majority party.
There's a loose coalition betweenthe Kuomintang and the TPP.
But the Kuomintang is the mostrepresented party in the ly,
at least for now, until recalls.
But even with recalls, a lot ofthose are KMT dominated districts.

(37:46):
And so, you recall one KMT guy, you'reprobably going to get another KMT person.
So that's, you know,from Beijing's perspective,
that's probably signs that, you know,
all is not lost and hopeless on thedomestic political landscape in Taiwan.
They are seeing increasing isolation.
They're pulled.
They're stripping away thesediplomatic allies of Taiwan.

(38:08):
They are seeing a campaign of coercionthat is advancing with very little
pushback.
So the things that.
That I think we need to reallypay attention to on coercion,
it's not just demonstrations through PLAactivity to show that they're displeased.
We don't like what Lai Ching just said,and

(38:30):
therefore we're going to dosome exercises around Taiwan.
No, they're actually, Admiral Paparo hassaid they're moving from training and
exercising to rehearsal.
So they're actually doingthings in the course of
these exercises that show thatthey're getting better and
they're preparing formore complex military operations.

(38:53):
So, communications between differentplatforms, data links, testing those out,
the kind of combined joint operations thatget into higher levels of complexity,
operations off the eastern side ofTaiwan from a military perspective,
they're doing more complex things.

(39:14):
They're getting better,and very little pushback.
They're also introducing this lawfarepiece, which is really quite interesting.
When there's an argument over who isthe rightful sovereign to respond
to a fisherman in distress on one sideof the Taiwan Strait or the other.
That sounds like legalese and who caresis extraordinarily consequential.

(39:38):
If China has the wherewithal torespond and then make a legal claim
that it's their right to respond toa fisherman in distress on the east
side of the middle line of the TaiwanStrait, that is a huge game changer.
And what you're seeing in this lawfareis these incremental statements.

(40:00):
But also statements backed upby activities and actions.
How far are we away from themsaying we need to inspect
commercial vessels going into Jilong orKaohsiung as the rightful sovereign?
Beijing's ultimate goal, I thinkremains to win without fighting and
ultimately to turn a campaignof pressure and coercion and

(40:23):
isolation into politicalcapitulation in Taiwan.
And I don't think from Zhongnanhai´sperspective they are without hope,
given some of thesethings I just described.

>> Kharis Templeman (40:35):
Okay, so let me elaborate or
ask you to elaborate a littlebit on this lawfare piece.
And in particular actually let me blow itup a little bit and ask about gray zone
activities, what we sometimes callsalami slicing in the region.
There is not a consensus in Washington,as I understand it,

(40:56):
about whether gray zoneactivities are important or not.
Whether the US should actually care aboutthe fact that there may be more flights
across the midline of the straittoday than there were yesterday,
about whether there's changes to websiteslisting Taiwan as part of China and
all, you know, the whole toolkitof things that Beijing can do.

(41:16):
And I've heard people, including peoplewho are likely to have a position in this
administration, argue we shouldn'tpay attention to that at all.
What really matters is whetherBeijing can pull off the high
end invasion scenario andeverything else below that,
as long as they can't physicallyoccupy Taiwan is not worth our time.
What do you think of that argument?

>> Randy Shriver (41:37):
I think it's highly flawed.

>> Kharis Templeman (41:38):
Okay.

>> Randy Shriver (41:39):
I don't put myself in that camp.
And the interesting thing is peoplewho say that if you talk about
Second Thomas Shoall in the Philippines,they have a very different attitude about
gray zone in South China Sea or you talkabout the Senkaku's in the East China Sea,
they have a very different attitude.
So there's this sort of Taiwan exceptionto this crew that thinks the gray zone
doesn't matter there.

(42:00):
I guess in fairness, if you stretchtheir argument out more fully, what they
would say is, and this is the case becauseof very limited resources in Taiwan.
And because they've been investing inthe wrong types of capabilities for so
long, they don't havethe luxury of doing it all.
And so they have to protect themselvesfrom the high end invasion.

(42:22):
But I don't see thesethings as sort of binary.
And I think inattention to the grayzone ironically could make
the high end conflict more likely,not less likely.
I think the Chinese have to see pushback,otherwise they'll just keep going.
And I think at some point a Levelof isolation and desperation would

(42:44):
lead to that more of that sentiment ofwillingness to capitulate politically and
really start to limit our options toyou know what again, Admiral Paparo,
if he were here, and what are the two orthree things that worry you most?
Number one,he would say is lack of strategic warning.

(43:05):
Why is warning decreasing?
Well, it's because the Chineseare operating at such intense levels in
the gray zone that they couldeasily turn that into a kinetic,
more aggressive operation of some kind,
if not a full on invasion in a mannerthat would give us very little warning.
And remember, you know,unlike Japan, Korea, now Australia,

(43:28):
now the Philippines a little bit,we don't have US forces on Taiwan.
So warning for us is everything.
The tyranny of time and distance and
getting forces into place to effectuateour op plan, warning is everything.
So I don't think we sort of havethis luxury of inattention and

(43:48):
pushback, non pushback in the gray zone.
I think forTaiwan there are other implications.
You know,they call it cognitive warfare and
sort of the drain that thathas on the population.
If they don't see theirpolitical leaders pushing back,
they don't see their militaryout there doing things.
There are serious questionsabout sustainability and

(44:09):
the ultimate answer mightactually not be either or.
It might be different,it might be Taiwan investing in a lot
of autonomous unmanned systems andreally sort of optimizing the pushback and
intercept ops plans orconcepts of operation.
So that every Chinese vessel getsa interrogation of some sort, but

(44:35):
it's not always going to be an exquisiteexpensive F16 or frigate from Taiwan.
So some combination of the manned,unmanned, autonomous, that's actually
a fairly affordable type solution whichanswers the resource question and
answers Taiwan's concerns about the grayzone and preserves a lot of space for

(44:56):
counter invasion capabilities.

>> Kharis Templeman (45:00):
From the US perspective,
do we have a role to play in pushing backand what tools are available in the US
diplomatic toolkit to respond punishthe PRC side for these incremental
changes in the status quo and potentiallyto deter down the road changes?

>> Randy Shriver (45:17):
Yeah, I do think we do, sorry.

>> Kharis Templeman (45:19):
Yeah.

>> Randy Shriver (45:20):
I do think we have a role to play and
I think we've not been very activein this information space airspace.
We got confronted in the UN withthe interpretation, you'll tell me.

>> Kharis Templeman (45:32):
The 2758.

>> Randy Shriver (45:33):
We all heard it how many times when the Chinese were manipulating
the interpretation to their advantage.
And so we finally got a statement outthat it was not our understanding of
the interpretation and started to havethat discussion with other countries.
We're not having that discussion onthese various aspects of lawfare in
the Taiwan Strait.

(45:54):
And we have, we have every right.
If you look at the Taiwan Relations act,
it essentially holds in place a lotof the rights and privileges and
recognitions that Taiwan enjoyed asa recognized diplomatic partner in
their new status as, you know,an unrecognized diplomatic partner.

(46:15):
So they have, in our own view,according to our law,
they have the right toexercise as a sovereign.
We don't recognize them diplomatically,but they have certain rights and
privileges to act as a sovereign.
And it shows up very directly in someof our interactions with Taiwan as
a recognized separate customs union andthat's why we have separate tariffs for

(46:39):
Taiwan and so on and so forth.
But we have every right to talk aboutwhether or not Taiwan has the ability to
control what happens around its ports,its various maritime rights.
Our law gives us the firm groundto comment on that, and we're not.
So I think we should be speaking upmore on the lawfare piece, certainly.

(47:03):
I think on the deterrence andthe more sort of hard power piece,
we're doing mostly the right thingson these various posture initiatives.
There is a comedian Will Rogers, even ifyou're going, even if you're on the right
track, you can still get run overif you're not going fast enough.
So we have nine Ektasites in the Philippines,

(47:26):
I think we have one completedBasa Air Force Base.
And the ones that are greatestgeographic proximity to Taiwan,
the ones in Northern Luzon, are very muchworks in progress would be generous.

>> Kharis Templeman (47:41):
Okay, our audience has been very patient,
I want to open it up, I know we'vegot a lot of experts in the room.
If you have a question,I'd invite you to raise your hand, and
we've got a gentleman comingaround with a microphone.
And I would be obligated, I think,to go with Larry Diamond in the front row,
first up.
Up here.

>> Larry Diamond (48:02):
Okay, I'll just speak up.
[COUGH] There's an argument thatthe US should be much, first of all,
that was, in my mind,an absolutely brilliant talk and
also I think a very balanced and fair one.
There's an argument thatsome people are making,
many actually, that the US shouldbe much more active in helping

(48:27):
the US push back against thesegray zone activities ,that we
need ships there in the Taiwan Strait,we need planes there.
We can't come even close to doingit probably half the time, but
one or two times out of 10, thereshould be an American presence there.

(48:49):
And related to that, on the Taiwanside of a much more muscular and
robust pushback against the gray zoneactivities is they're buying more of the,
and you alluded to this, the kindsof weapons that are needed for that.
But isn't the Trump administrationgoing to push them to

(49:12):
keep buying very expensive Americanweapons systems that will be good for
our trade balance, but maybe isn'tthe best use of even 3% of GDP?

>> Randy Shriver (49:26):
So thanks, Larry.
I appreciate it andappreciate the kind words.
So on the first part, I do think the USshould be doing more to push back, but
we have serious capacityconstraints ourselves.
You talk about ships neededin the Indo-Pacific.
Admiral Paparo's got realconstraints on his hands there.

(49:47):
So I think priority mission areas likethe resupply of Second Thomas Shoal
in the Philippines for me is a priority.
I think some pushbackin the Taiwan Strait,
I think some pushback around the Senkakus,not that, the Japanese are actually doing
pretty well in terms of meetingthat head-on platform for platform.
It is stressing them, but

(50:08):
I think occasional jointpatrols from the US would help.
But we've got capacity constraintsthat have to be taken into account.
So I think I would say it a littledifferently on the Trump administration's
approach to security assistance forTaiwan.

(50:29):
So we did go through a prioritizationprocess where we said,
here's the priorities basedon what we think you need and
what's affordable and what's sustainable.
And actually,when the Biden administration came in and
they said these are not only priorities,we're going to be very directive and
we're going to say, you can't buy thesethings, you have to buy these things.

(50:52):
A lot of people blame me cuz I was the onewho signed out the priorities memo and
I said, well, wait a minute,we said those were priorities.
Taiwan still has agency.
They still have a democracy.
It is still their existential threat.
They still get the opportunity to say,we wanna buy certain things, and
we should be somewhat permissive in that.
And that's how we approachedit in the first Trump term.
There are people who I wouldsay would fit very comfortably

(51:15):
in the Biden administration's approach tothe so called asymmetric capabilities.
There's a very senior person in the Trumpadministration who coined the term, if it
flies, it dies in Taiwan and we shouldn'tbe selling these exquisite fighter jets.
So what I think going to see and alreadyseeing as I understand it is more of

(51:35):
a bilateral discussion,not a directive, you can buy this,
you can't buy that, butmore of a bilateral discussion.
It's already underway withrespect to the special budget.
And I believe the US Will be communicatingpriorities and I believe the US Will be
communicating what they thinkis affordable and sustainable.
And I believe they will be leaningin against certain capabilities.

(51:58):
I've heard that from the mostreliable sources, defense industry,
who are seeing difficulties in movingforward with some of their programs.
But at the end of the day,I do think there'll be some deference for
Taiwan if they say, we understandeverything you're saying, but
here's a priority for us in the gray zone.

(52:19):
And we're basically telling them toignore that and we're not stepping in and
providing that capability.
That's a real problem for Taiwan.
So I anticipate there'll be a discussionat least on a couple of key platforms that
might lean in the direction that wouldn'tnecessarily support the asymmetric
counter invasion strategy, butmight be good for gray zone.

(52:40):
We'll see.
There is another irony, though withwhat Taiwan really needs is they need
munitions and they need spares andthey need maintenance and
they need all this asymmetric,attritable, survivable stuff.
And by the way,we want you to spend 3% of GDP, or
if you're Bridge Colby,you wanna spend 10% of GDP on defense.

(53:02):
Well, you're not getting a 3%on munitions and spares, right?
So we do have to have a process that triesto meet these various commitments and
expectations in the most sensible way.
Again, I'll use the overused phraseof Washington, cautiously optimistic.

(53:23):
I think that process is underway.

>> Kharis Templeman (53:25):
Okay, all right, other questions?
Go over here.
Paul Wolfowitz.

>> Paul Wolfowitz (53:39):
I shared Larry's comment that's very reassuring that you're
around.
But I have a questionwhich is too personal,
which is who actually will listen to youin the administration or on the Hill?
But that's not the question.
[LAUGH] I have a different one.

>> Randy Shriver (53:53):
I still take my calls, so.

>> Paul Wolfowitz (53:54):
[LAUGH] Asymmetric warfare business,
I've never quite understoodhow it's supposed to work.
Taiwan is not Ukraine.
It doesn't have a friendly landborder to a friendly country.
Once the PRC troop, PLA guys get on theground in Taiwan, it's guerrilla warfare.
It's all over, I think.
Is there a logic that I'm missing?

(54:16):
Probably.

>> Randy Shriver (54:20):
Thanks, Paul.
It's a great question.
I think the concept of asymmetric warfare
is sound at a very fundamental level.
Taiwan is small, small population,China's big, and so
you have to think in asymmetric ways.
But I think it's really morphed intothings that are not very helpful and

(54:43):
in some ways harmful when,not a partisan statement.
But when the previous administrationtalked about asymmetric weapons and
asymmetric platforms, well, wait a minute.
Weapons aren't asymmetric in andof themselves.
Inherently they're not.
It's how you use them and what's thestrategy and what's the doctrine, right?

(55:03):
And so I think this whole conversationmorphed into a direction of you're
either really smart and agree with usthat Taiwan has to buy these certain
things cuz they're asymmetric,or you're not.
You're wasteful and you wannacontinue doing things the old ways.
And what I think your questionrightfully points out, Paul,
is you have to take Taiwan'sunique circumstances,

(55:26):
including its stature as a small island,small population, its unique geography.
And then figure out a prioritizationof the missions and
the threats and things you want Taiwanto be capable to do on its own.
And Taiwan is not withoutsome advantage here.
80 nautical miles of water, mountainous,inhospitable terrain, unfavorable sea

(55:49):
conditions for most of the year, very fewfavorable ports for embarkation of troops.
So you can build a concept of operationsfor the defense of Taiwan, given Taiwan.
Taiwan's resources that wouldbe very credible, I think.
And it definitely includesthinking about civil defenses and
guerrilla warfare and what happensif the PLA gets a lodgment on Taiwan

(56:12):
somewhere becausethe game's not over there.
I mean, you've been there.
A lot of us have spent time there.
The terrain is pretty difficult foran invading force.
Ian Easton has a new piece out,Naval War College,
that it talks about why the USdecided not to invade Formosa and
basically bypass it before the decisionto drop the nuclear device.

(56:37):
And time and again, when people havelooked at this from a military standpoint,
it's a very difficult target.
So I think the whole conversationabout asymmetric warfare and
Taiwan having an asymmetric strategymorphed in a pretty unhelpful direction.
And I think it needs to be grounded inexactly the kinds of things you're saying.
Taiwan's geography, Taiwan'spopulation size, the threats they face,

(57:00):
and what they could reasonably expect fromoutside support and then go from there.
And I don't care,I can make a weapon symmetric, asymmetric.
I can make it offensive,I can make it defensive.
I mean, it depends on the strategy anddepends on concepts of operation.

>> Kharis Templeman (57:15):
Great.
This gentleman right here in front,bring the mic up to you.

>> Ben Sharma (57:24):
First, thank you for joining us and sharing your point of view.

>> Kharis Templeman (57:27):
Sorry. Could you introduce yourself as well?

>> Ben Sharma (57:29):
Sorry.

>> Kharis Templeman (57:29):
No worries.

>> Ben Sharma (57:30):
I'm Ben Sharma.
I'm an alumni.
And so I wanted to ask you, in thescenario where we were just talking about
the invasion and so it's a hypothetical,assuming it doesn't go well for us and
Taiwan and the defense, and China isable to basically secure the island to

(57:50):
some degree and the guerrilla warfare,all those other things have played out.
And so it's kind of the end game.
Do you think the strategy at that point?
Because we did talk about the chips,it's kind of an elephant in the room.
Would be one where the USwould try to take out
the industrial capacity ofthe chips through sabotage and

(58:15):
also take the intellectualassets out of the country to
basically not let those fallinto the hands of the invaders.
And if you don't feel that this isa plausible kind of scenario in the end
game, it'd be interesting to hear why.
And also, what might beanother alternative to this in

(58:38):
the last play of the game?

>> Randy Shriver (58:42):
So the only place I've heard anybody talk about bombing like
TSMC is in, like,outside of governments and think tanks and
maybe some academic institutions.
And I've never heard that discussioninside government other than a reaction
to hey, did you read this crazy articleabout we're going to bomb tsnc?

(59:06):
It's really, it's never beena consideration as far as I'm aware.
The idea though of human capital,I'll add another,
starving it of the intellectualproperty and the design.
TSMC is a remarkable story, but

(59:29):
it's a place of manufacturing.
It's largely relying on designstill from the United States.
If you look at the whole value chain,it's the Qualcomms and
others that are doing the most advanceddesigns that Taiwan is building.
Presumably you could cut that off andyou start to starve it of at least

(59:51):
the high end designs that they wouldneed to continue to occupy that very
special place of domination ofthe high end, most advanced chipsets.
And I think through that combinationyou'd be able to not kill it, but
it wouldn't sort of be China gettingthe goose that laid the golden egg and
all is well and we all carry on.

(01:00:12):
I don't think that's the scenariothat I would expect.
I think TSMC and some of the othergreat companies in Taiwan would
cease to be what they are todaythrough other means rather than.
Now, we have a lot of other problemsrelated to chip supply chain
beyond just Taiwan and the role thatTSMC plays in the high end chips.

(01:00:37):
We're still reliant at the component andcritical mineral level.
We're still relying on China.
We've got all kinds of problems.
But this is one.
I don't think we're at the point whereanybody that I'm aware of inside
government orindopacom is saying we need to bomb this.
If we get to that worst case scenario.

>> Kharis Templeman (01:00:56):
Okay, let's see.
Let me get somebody at the back.
Let's go.
William.

>> William Yang (01:01:07):
Hi, my name is William Yang.
I'm a senior analyst at InternationalCrisis Group based in Taipei.
My question is regarding.
I think we all can agree thatthere are some very reliable,
familiar people in the White Houseright now that are very,
you know, I think constant,constantly engaging with Taiwan.

(01:01:29):
But the past week we also saw how fragilethose people are right now because
of some of the domestic challenges thatextend from that whole signal debacle.
And the fact that this administrationsomehow is right now being
preoccupied with some other globalchallenges in different parts of

(01:01:51):
the world that the administrationis trying to wrap it up or end but
seems to be very difficultto actually do that.
And attention and intention to try toshift to focus on Indo Pacific seems to
be sort of like blocked by that and Chinaat the same time, from my perspective
in Taipei, looks is really steppingup their efforts to reestablish new

(01:02:15):
normals through these exercises,finding excuses in the Taiwanese
administration's responses that theyview as the pretext that they can use.
How do you look at the reality thatthe Trump administration in the second
term might actually face difficultiesto really assert its agenda on
prioritizing efforts aroundcompetition with China and the.

(01:02:38):
Also support for Taiwan?

>> Randy Shriver (01:02:42):
Yeah, that's the $64,000 question.
As we used to say, if you're of a certainage and you know what that means.

>> Kharis Templeman (01:02:49):
100,000 now, inflation.

>> Randy Shriver (01:02:53):
Tariffs.
200,000.

>> Kharis Templeman (01:02:54):
Yes, right.

>> Randy Shriver (01:02:58):
I would say the signs I'm seeing now suggest that they,
they want to focus on the Indo Pacific andthis challenge and, you know,
distractions and noise and other thingsand stuff happening in the world.
That's part of every administration andthat's life.
I think so far, they're mostly on track.

(01:03:21):
If I were to be more pessimistic andI were to give you the other version of
the speech, I think there's a higher costto pay for cutting back foreign aid and
foreign assistance and these tariffs thanwe're actually factoring in right now.
And, you know,if the contested areas of Asia are some of

(01:03:41):
the countries of Southeast Asia,we are doing ourselves,
I think, great harm cutting off aid andcutting off MCC and
cutting off INL programs in placeslike Indonesia and the Philippines and
Malaysia's not as big, butsome of the Pacific islands, and I think.
There are some that wanna see this as sortof soft power, but hard power's over here.

(01:04:06):
We can do this and not pay a price here.
I think they're very muchconnected in a couple ways.
I think there are new opportunities forChina, you know, not that they're
very good at soft power, but we'veleft a vacuum in some critical places.
Number two, it was done in such a hamfisted way, we didn't even realize in some
instances what some of the second andthird order effects would be.

(01:04:28):
Let me give you a coupleexamples in the Philippines.
So we said, we wanna protectthe military work at ECDA and
I don't know if you're familiar withthese sites in the Philippines.
So Enhanced Defense Cooperation Agreement,nine military bases in the Philippines,
they've given us space to put warehousesand to forward deployed things.

(01:04:51):
Mostly humanitarian supplies atthis point so that we can be good
partners on disaster relief should therebe a natural disaster in the Philippines.
But one can imagine inthe future munitions,
other types of logistics, support, etc.
So okay, we're gonna preserve that,
but we're gonna cut AIDbecause we don't like AID.

(01:05:13):
Nobody bothered to lookinto the fact that the ECDA
sites themselves were beingsupplied by AID trucks.
So stuff showed up in port, there was notrucks to take them to the ECDA sites.
And the Philippines startedcharging us storage,
which if you have spent any timein the federal government and
know how budgeting works,nobody had money for storage.

(01:05:35):
And so we had to basically donatea lot of humanitarian supplies to
the Philippines government.
So that's uh-oh, that's not good.
Turns out the work that we do atthe Philippines Coast Guard was funded not
through FMF, not through defense spending,which we said we're not gonna impact that.

(01:05:56):
Well, that was a state inl internationallaw enforcement program because
Coast Guard is part of law enforcement.
So we suspended all our assistanceto the Philippine Coast Guard,
which is on the absolute front lineswhen it comes to the South China Sea and
the contested areas there.
So I think we're going to have a littletrouble pulling back from this.
And I think there were some own goals thatunfortunately we haven't even stopped,

(01:06:20):
there's probably more coming.
So I think that ham fistedway also contributes to this.
I think the bottom has to settle on this.
And I think we're in a process now withCongress where as they go into 2026,
they better reconcile this stuff.

(01:06:42):
If they don't, it's an admission byCongress themselves that we don't matter,
because one could say 20,25, we're on a cr.
DOGE is new, new administration,confusion, okay?
We authorized things andwe appropriated money for
things that aren't actuallygonna be implemented, okay?
Oops.
You can't do that into a second year.

(01:07:03):
If you're Congress, you can't authorizeand appropriate a second year of things
that aren't going to be implementedwithout saying we don't matter.
We're just gonna be completely ignored.
So they have to reconcilein this coming year.
And I think that helps us sortof find the floor on where
does all the cutting andall that sort of land?

(01:07:25):
And then I think, you know, people canadjust when you've got a new baseline.
And, you know, maybe some peoplewill say the stock market's going
to do that with tariffs,but in the security space,
military space, people can adjustwhen they know the new baselines.
And my hope is that Taiwan,we have preserved the fmf,
we have preserved the training,we have preserved foreign military sales,

(01:07:49):
we have preserved a lot ofthe military education opportunities.
So I think when the dust settles,
Taiwan will continue to enjoy a placeof prominence in our strategy.

>> Kharis Templeman (01:08:02):
Alex, yeah.

>> Alex (01:08:07):
Hi, Randy.
Alex Capri National Universityof Singapore so
TSMC has committed about $165 billion now,right, with the sites in Arizona,
plus, you know, 65,plus another hundred billion.
But Trump is talking about, orhe's calling the CHIPS Act a horrible,
horrible thing, right?
How do you see that playing out, right?

(01:08:28):
I mean, we've got the tariffs now.
Now we've got Trump talking about, I don'tknow what's going to happen, right, with,
with the CHIPS Act.
How do you see that playing out andhow important is it for
CHIPS funding and tax rebates,etc, to stay in place for TSMC?

>> Randy Shriver (01:08:50):
So I could find flaw in the CHIPS Act, right?
Particularly when you measuredagainst what members intended to do.
Remember, it was this big China bill, and
it was going to be all things to helpus compete effectively with China.
And as it funneled down to thingsthat members could agree on,

(01:09:11):
it became basically,how do we incentivize rebirth and
regrowth in this aspectof the CHIPS industry,
the manufacturing aspect of the CHIPSindustry back in the United States?
I think I in no way could speak forPresident Trump, and I don't think
he liked it cuz it didn't happen on hiswatch, it was the last administration.

(01:09:31):
Even though there had been a lot ofcommunication about the legislative
agenda related to competitionwith China wasn't on his watch.
What I think will happen, I think thetariff issue is a little more complicated.

(01:09:52):
It does seem,despite everything that's being said,
it does seem that it's the openingbid in a longer negotiation.
And my guess is that the CHIPS actwill probably be criticized but
continued to be implemented becauseit's very popular in Congress and
it's very popular if it's in your state ordistrict of receiving the funding.

(01:10:15):
It is an enabler for even moreinvestment like the TSMC investment.
So I think it'll continueto be implemented even it's
occasionally criticized.
I think what we, what the biggerunknown is sort of how the tariff thing
settles and how that ultimatelyaffects investment patterns.

(01:10:38):
And, you know, their argumentis it's going to be helpful.
I don't know that that's the case whenyou get into counterterroriffing and
when you get into any nextphase of negotiation.
But I guess I'm interested
in what comes post CHIPS Act also?

(01:11:02):
The work that I do on the US ChinaCommission recommendations to Congress,
the work that the selectcommittee does on China,
the work that's happening inthe Armed Services Committee.
Cuz the NDA's the only bill that passesusually, CHIPS Act notwithstanding.
There's a lot of discussionof what's after CHIPS Act.
Is there CHIPS two, is there?

(01:11:23):
And this would be on Trump's watch.
And this would be, you know,why is DFC protected right now?
Well, Trump administrationhad a lot of input into
Development Finance Corporation.
So I think if there's an effortOn a post chips act of chips 2 or

(01:11:44):
some other 2.0, I think that's wherethe rubber will really hit the road.

>> Kharis Templeman (01:11:51):
Okay, we've got time for maybe one more question.
I'll take this gentleman in front.

>> John Yu (01:12:00):
Good afternoon.
Thanks for coming to talkabout US-Taiwan relationship.
Long time no see you.

>> Randy Shriver (01:12:08):
Good to see you, John.

>> John Yu (01:12:09):
Yes, thank you.
My name is John Yu.
I was born in Taiwan.
Right now we just formed a neworganization called Global Alliance for
Taiwan Technology Diplomacy.
By the way, Karen was invitedas a keynote speaker which was
held on August 11, 2024, last year.

(01:12:30):
I'm glad to see Loren cominghere to talk about this subject.
Before I ask you two simple questions,I'd like to clarify,
which one has more power comparingto the executive order was US law.
We all know US-Taiwan relations act isa law, it's not the executive order.

(01:12:54):
But now I heard Randy said,President Biden also
issued executive order to protect Taiwan.
So by comparison,if one day President Trump order say,
[COUGH], I support Taiwan independency,for instance,

(01:13:14):
which way overridethe US-Taiwan Relations Act or not?
That's my leading question.
Now the real question number one.
I know Randy, you mentioned US doesnot support Taiwan independency.
What does that really meanonly if one day vast majority

(01:13:35):
Taiwanese people which line dyingnow they are pro study codes.
They are not interestedto recur independency,
if one day happen what the US governmentofficially will say go ahead boy,
you do whatever you want or no,you cannot, I don't support you.
So what's the really impact is,political ambiguity or

(01:13:58):
is it really to come downPRCs back to US and South?
That's question number two.
Question number two, number one, sorry.
Question number two, since we allknow TSMC is holding stuck for
Taiwan economic growth,I believe the near future
TSMC has committed toinvesting a lot of money.

(01:14:22):
With that investment to giveUS-Taiwan to improve or
to get even better the nextlevel of US-Taiwan relations.
That's my second question.
Thank you, Randy.

>> Randy Shriver (01:14:38):
Thanks, John.
I think the second question for soI think the original TSMC investment
was negotiated in the firstTrump administration and
it was very much about solidifyingthe relationship our bonds and it wasn't.
It was always understood that the crownjewels, the highest capabilities

(01:14:58):
to produce the highest end exquisitechips would remain in Taiwan.
But that this diversification would behelpful to the US the biggest market for
Taiwan andwould ultimately also contribute to the US
goals of regaininga manufacturing capability and

(01:15:21):
an ecosystem that itselfmight spin into higher
levels of production of advanced chips.
But the deal was very much informed bywanting to strengthen US-Taiwan relations,
not alter them in a way that wouldbe disadvantageous to Taiwan.
And again,the crown jewels remaining in Taipei.

(01:15:42):
So I think further investment isprobably along those same lines.
I think the scale of it is quiteimpressive, and it all comes to fruition,
at's very meaningful.
And the US should beappreciative of Taiwan's
investment at that level andthat magnitude.

(01:16:05):
Your first question aboutwe do not support it.
So the comment I made is we actually tookthat off the State Department website.
So we no longer say we do notsupport Taiwan independence,
but presumably that's still policy.
And out of the things I spend time onwhen I was at the State Department,

(01:16:25):
I feel like I spent like an inordinateamount of time on this, like, explaining.
Because to normal, like air breathers,>> Kharis Templeman: [LAUGH] l
Like to say,
we oppose independence, we do not supportindependence, we don't care about,
it doesn't make a difference,it sounds the same.
And I had a lot of instances whereI'd get called by the media,

(01:16:48):
like did your policy, Colin Powell justsaid we oppose Taiwanese independence.
Is this a change in US policy?
No.
So you really have to besteeped in the nomenclature and
the history and everything.
And if you are, then what it means isit's we take a passive position on it and

(01:17:14):
don't actively oppose it,but nor do we support it.
So to say we oppose Taiwanese independencemeans we're going to proactively do
things to prevent it.
We would speak out against it.
We would say we oppose it.
If Taiwan were to take those steps,
presumably that couldhave some consequences.

(01:17:34):
You know, we might be less inclined tosupport Taiwan in the event of military
action by the PLA if it's in reactionto a declaration of independence.
So to say you oppose independencehas all kinds of implications.
To say we do not support is saying,you know,
we're basically taking a passive view.
We're not going to proactively supportit and say, that's great, go do it, nor

(01:17:55):
are we going to actively oppose it.
So in that, if you have thatunderstanding, if Taiwan were to,
through whatever democratic process,make a declaration of independence,
if you were to be consistent,you would then say,
that was the choice of the people ofTaiwan and we move on and we move forward.

(01:18:18):
I'm not saying that would be the case, butthat would be the consistent position.
If you pulled that thread farenough in that direction.
Well, they're probably constitutionalscholars and people who know this more.

(01:18:41):
So there, there are some areaswhere the president has a lot of
latitude to issue executive orders under.
Under law.
So.
And what the president tends to do withthis flurry of executive orders is,
he would likely invoke something likeIEPA, which is emergency, something.

(01:19:04):
He declared national emergencies,
which gives him extraordinarypowers under the law.
And so you have a category of executiveorders which he says is being done in
furtherance of the law,in his purview with the law.
And then you have executive orders whichmay be completely outside the law,

(01:19:24):
but he might challenge andsay I have the right or
the ability to do thisbecause I'm president.
And and in that case, you know,
it sort of stands unless challenged.
Right.
And then you have what President Bidendid, which was not an executive order,
was declaratory policy.
And saying of course we'llcome to Taiwan's defense.

(01:19:46):
And declaratory policy is neither,it's not grounded in law or
formal executive action,but it's pretty powerful.
When the president, there's not the onlyperson who matters, but he's the one
person that matters most when he saysthis is our policy, it's pretty powerful.
So,>> Kharis Templeman: All right,

(01:20:08):
well on that note, we are at time.
I want to thank you all foryour patience and for your attention.
I also just want to plugagain our event on Thursday.
Can Taiwan secure the energy supplies itneeds to meet its high tech aspirations?
We'll do that in this room 3:30 to 5:30.
I also wanna thank our great events teamfor supporting this event, Amy Alonso,

(01:20:31):
Michelle Arojo, and Hilary Weissman,and the rest of the Hoover events team.
And also our partner,the Taipei Economic and
Cultural Office in San Francisco fortheir continued support.
And finally forthe students in the room especially,
there is free food in the back.
We invite you to take advantage,linger and

(01:20:51):
have informal conversations thisspace as long as you'd like.
So thanks again for coming.