Ryan Hass On Taiwan: Taiwan’s Inside-Out Paradox

Taiwan’s domestic political situation is following recognizable political rhythms, while the international environment surrounding Taiwan is undergoing a major transformation.

Within Taiwan, there are ongoing battles between the legislative and executive branches over the budget, and between cities and the central government over resources. Tensions between political parties dominate headlines and consume much of the attention of party leaders. Jockeying is underway for local elections this November and national elections in 2028. And the longstanding philosophical debate inside Taiwan over how best to protect Taiwan and promote the good life remains unresolved.

Amidst all of this, Taiwan continues to function well. It is one of the world’s strongest-performing advanced economies and occupies a central position in critical technology supply chains. In fact, Taiwan’s economic performance is so strong that the government is planning to return some of the wealth to its people. This is a powerful contrast with virtually every other major economy in the world today, all of which face fiscal constraints.

There are, of course, continuing challenges inside Taiwan. The benefits of the AI boom are not being felt evenly across society, particularly among small and medium-sized enterprises and the employees who power them. Partisan gridlock continues to constrain progress in strengthening Taiwan’s self-defense. And prices are rising faster than wages for many people, causing frustration and pessimism about the future.

At the same time, Taiwan’s civil society remains vibrant, its independent media serves as a check on government, and public opinion remains solidly in favor of preserving the cross-Strait status quo. In other words, Taiwan’s political system is engaged in familiar debates. The world around Taiwan is not.

The scale and speed of change in the international system today are probably greater than during any period since the immediate aftermath of World War II. During that moment, the United States organized international efforts to establish the United Nations, rebuild Europe and Japan, and forge a trade order that began in the free half of the world and later spread to cover the globe.

Now, many global trendlines are moving in the opposite direction.

The United Nations is losing relevance, America’s global alliance network is losing cohesion, and America itself is acting more like a 19th-century imperialist than a 20th-century leader of the free world. The United States retains extraordinary power — militarily, technologically, financially — but it is losing followership on the world stage.

Now that the American people have elected President Donald Trump twice, countries around the world are increasingly concluding that Trump is not a strange passing phenomenon in America, but rather a part of America’s political establishment. In other words, some version of America First will likely guide American foreign policy periodically for the foreseeable future, as power shifts back and forth between Democratic and Republican administrations. Even among Democrats, former President Joe Biden likely was the last of his kind. Future American leaders will not win elections by vowing to restore America to its former role in a world that no longer exists.

It now is broadly accepted that the post-World War II era of American global dominance, Pax Americana, is over. A debate is underway about what type of international order will come next. American foreign policy expert Hal Brands has presented three potential scenarios. The first is a revival of Cold War-style blocs, anchored by the United States and its partners on one side and China and its partners on the other. A second scenario is the emergence of spheres of influence, in which major powers dominate their respective neighborhoods and global rules give way to bargaining between great powers. A third scenario would be a more fragmented and fluid multipolar order, whereby middle powers exercise greater flexibility to build issue-based coalitions to address specific challenges, as opposed to fixed blocs.

Each of these futures would present Taiwan with different diplomatic, economic, and security challenges. Bloc competition would push Taiwan toward aligning with democratic partners and likely would shrink policy space for new approaches to cross-Strait relations. Spheres of influence would raise the risk of great power bargaining over Taiwan without Taiwan’s involvement. Multipolarity could create more opportunities for Taiwan to participate in different issue-based coalitions, but it also could lead to greater fragmentation and disorder.

Of these scenarios, spheres of influence hold the greatest risk for Taiwan. I view this as the least likely scenario, at least in Asia. China faces the least hospitable geography of any major power to assert dominance over its periphery. ASEAN exists to prevent such an outcome in Southeast Asia. In Northeast Asia, Japan, South Korea, and Taiwan all have formidable capacity and will to protect their ability to pursue their respective interests.

Moreover, the world is on the cusp of being transformed by the AI revolution. As the world’s leading producer of advanced semiconductors, Taiwan will not simply be affected by the AI revolution; it will be shaping it. As AI diffuses and gains adoption around the world, it will transform how power is conceptualized and exercised. AI will not be confined by national boundaries. Embodied AI and related technologies will lower the cost of military technologies and make them more accessible to a wider array of actors. Already in Ukraine and Iran, significantly overmatched militaries are using AI-enabled drones and other technologies to hold off larger militaries. As AI-enabled weapons systems become more affordable and accessible, it could become costlier and riskier for countries to seek to militarily conquer others.

My point is not to suggest that I have a special window into the future. Nobody does. Rather, it is to observe that the world is undergoing a profound transformation before our eyes. This transformation will likely not play much of a role in the 9-in-1 elections this November, which understandably and appropriately will be centered around local issues. But it should spur a serious debate going forward. A central question for Taiwan’s leaders in 2028 and beyond is not merely how to win partisan battles or manage cross-Strait relations. It is how to make Taiwan more secure and prosperous in a transforming world.

Ryan Hass is a senior fellow, the Chen-Fu and Cecilia Yen Koo Chair in Taiwan Studies, and director of the China Center at the Brookings Institution.