This article was originally published by Global Taiwan Institute in its weekly newsletter, The Global Taiwan Brief, Vol. 5, Issue 1. Used with permission. To get the Global Taiwan Brief in your inbox every week, subscribe at globaltaiwan.org/subscribe.

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By Ambassador Stephen M. Young (ret.), who served as a US diplomat for over 33 years, with assignments in Washington, Taipei, Moscow, Beijing, Kyrgyzstan, and Hong Kong. He is a member of GTI’s Advisory Board.

Happy New Year to all my friends in Taiwan and the United States! The editor has given me the challenging task of offering an outlook in this coming year for US-Taiwan relations. I am to include commentary on Taiwan domestically as well as assessing current cross-Strait ties. No easy task. I was trained as an historian, then I worked for over three decades as an American diplomat. As a historian, we are cautioned to look only at the past, for the future is unknowable. In fact, good history is supposed to allow a reasonable period of time to settle before one can accurately assess what has happened. But as a diplomat, we were tasked with making projections to assess future events and their implications for American interests. I will do my best.

As I write this, we have just witnessed another landmark in Taiwan’s democratic development, as the voters have chosen a new legislature and president. President Tsai Ing-wen’s decisive reelection—and her party’s retention of its Legislative Yuan majority—may distress the People’s Republic of China (PRC) and some pan-blue elements, but provides a measure of continuity and stability in that young democracy as it encounters a range of challenges, new and old. Meanwhile, the American electoral process is gearing up, with congressional and presidential elections scheduled for this November. Much is unclear at this point, including President Trump’s prospects and the question of the next Congress’ composition.

So let’s start with Taiwan. While Beijing is not pleased to see President Tsai granted four more years, it has no one but itself to blame for the current state of cross-Strait relations. Neither appreciating nor understanding democratic processes, the authoritarian state there was hoping it would see Tsai’s defeat and a return to KMT rule that might reinvigorate trends toward “reunification” of the two sides of the Strait. That is precisely what drove many voters in Taiwan to give the DPP and its standard-bearer another term. China has focused more on threats and bullying than positive incentives, and the people of Taiwan have rejected that alternative.

Tsai has many challenges now. She must strive to bring people together again after a fractious electoral campaign. After celebrating with her supporters, she would be wise to reach out to those who did not vote for her and offer them a coherent strategy for managing Taiwan’s economy, in the face of continued hostility from its huge neighbor. At the same time, Tsai needs to reinforce relations with Washington, while preparing for the uncertainty of our fall elections. She is fully capable of these tasks.

President Tsai’s conciliatory remarks after her electoral win were wisely aimed both at her opponents in Taiwan and the leaders of the PRC. Yet there will be skeptics on both sides, particularly in Beijing, where Xi Jinping placed his wager on a different outcome.

Pan-blue opponents of Tsai must now reckon with four more years of her rule, along with a minority position in the Legislative Yuan. They would do well to look for new leadership within the party, favoring those with a steadfast commitment to the island’s de facto independence and a focus on realistic economic strategies that do not overly rely on cross-Strait amity and flourishing trade with the PRC. The KMT—if it is to survive as the second leading party on the island—needs to bring in new blood. It should also look to its friends in the United States for support. Given the generally skeptical attitude toward Xi’s China in America today, that strategy would argue against continued Pollyannish reliance on the good will of communist China, and its authoritarian leader for life. Otherwise, I suspect the KMT will fracture and could be headed toward long-term decline.

Of course, we can continue to hope for positive change in the PRC, unlikely as that currently appears to be. Hong Kong offers a number of clues to this. The ongoing resistance of the broad masses of people there to encroaching pressure by Beijing is encouraging, even as it courts possible crackdown by both the authorities within the former colony, and more ominously, from the PRC itself. Xi has shown absolutely no flexibility thus far, and as a result he has lost the battle for the hearts and minds of the people of Hong Kong. He also has to concern himself with the impact of events there on his own oppressed people.

I am sure many people in China are following events in Hong Kong closely. They see a “Han Chinese” population that is rising up in protest against attempts to constrain its freedoms, so solemnly promised in the process of Hong Kong’s turnover 23 years ago. Perhaps some of them may be reflecting on their own constrained freedoms, and are taking hope in Hong Kong’s rejection of a similar fate. Others—no doubt influenced by the bombardment of communist propaganda—might simply view Hong Kong as a rebellious and ungrateful city that needs to be disciplined.

Meanwhile, the United States approaches its own democratic process, which this fall will elect a new Congress and President. It is likely that the legislative branch will remain divided, with a Republican Senate balanced off by a Democratic House. The critical question is who will win the presidency. If Mr. Trump is reelected, a generally pro-Beijing policy is most likely, though mixed with ongoing trade tensions.

Trump has shown little interest in pushing for change in Chinese domestic politics. A President from the Democratic Party would likely adopt a sharper tone toward Xi’s autocratic policies. But in the end, accommodation of our huge economic and trade ties with China will constrain whoever wins the American election to continue trying to work out our differences amicably, whenever possible.

Another huge variable is the state of the economy, in the US, in China, and in Taiwan. Many close observers predict a slowing down of the American economy, which would have ripple effects around the world. We have been on a positive growth trend now for some time, so a correction would make sense. But something more serious, like a recession, would both damage Mr. Trump’s reelection hopes and probably also trigger a global slowdown. Trump’s massive deficits point toward this outcome, and he is unlikely to change that trend as he seeks reelection.

President Tsai has sought to reduce Taiwan’s dependence on cross-Strait trade, a wise policy given these variables. But the fact is that China’s economic reach makes it the most significant player in most of Asia. So her “go south” strategy cannot be totally separated from the China factor. That said, there is much she can do to reduce Taiwan’s direct dependence on cross-Strait relations. Focus on US trade relations is vital to any such strategy.

A first step would be to end the short-sided and longstanding impasse over Ractopamine, the additive to pork products in the US market that has proven a sticking point in US-Taiwan trade since I was director of AIT a decade ago. To be blunt, this is merely a poorly disguised protectionist strategy on Taipei’s part. It has stymied progress on a Free Trade Agreement (FTA) between our two economies, and serves no practical purpose at a time when Taiwan needs closer ties with Washington for both economic and political purposes.

Newly reelected, President Tsai—an experienced economist and trade specialist—should move quickly to end this impasse and move forward on more productive trade relations with Washington. She will find a willing partner in Washington. Congress is ready to move on. So is the Trump administration. If Trump does not win reelection, Madame Tsai should be prepared to work with the next administration on this question, drawing on her huge reservoir of support on Capitol Hill.

Next, our two countries should look to Taiwan’s realistic defense needs and shore up the island nation’s ability to resist threats of PRC aggression. That would include both additional arms sales and enhanced military-to-military contacts. We face a common threat in China’s ongoing attempt to bully its neighbors and gain power projection beyond the first island chain. Japan is another key player here. Taipei’s historically strong relations with Tokyo can be energized to offset Chinese bullying.

There are other potential partners to the south, all of whom face a growing threat from Xi Jinping’s assertive economic and military policies. Taipei’s relations with Vietnam are good, and can be further strengthened, both economically and politically. The Philippines has historically been a friendly neighbor. ASEAN can be another strong economic partner. Taiwan should utilize its membership in APEC and other regional organizations to pursue closer ties with all who are willing. South Asia should not be neglected. India recognizes the danger to its interests in an aggressive China, and there are many other factors that argue for closer ties with Taiwan.

While it should not be a formal policy of the United States, we can also continue to hope for positive change in China. Our trade policy is one tool toward that end. Getting Beijing to abide by accepted international practices and standards is important. Our continued ability to project military power into the region—as well as our network of alliances—are both vital to this effort. Although constructing an anti-China bloc is a hoary relic of the Cold War, solid economic and security relations with our friends throughout Asia will remain an important strategy going forward. We should continue calling out the authoritarian regime in Beijing on such issues as its belligerent behavior toward Taiwan, its abuse of human rights at home, and its aggressive foreign policy toward its neighbors.

Finally, America must continue to stand as a symbol of democratic governance to a region that has struggled with this concept. As the old slogan goes, “democracy is the worst political system there is, except for all the alternatives.” China’s brutal authoritarianism has found few takers around the world, while America has been a beacon of hope throughout its longstanding adherence to democratic practices. Taiwan’s remarkable democratic transformation brings our two people that much closer together.

We must resolve to continue sharing these ideals with our friends around the world, and particularly in East Asia. Hopefully, some day, China too will open up its political system and join the modern world in that respect. Until then, America’s longstanding and firm commitment to the prosperity and security of our friends in Taiwan will be their best hope for a safe and secure future!

The main point: President Tsai Ing-wen’s decisive re-election may distress the PRC and KMT opposition, but provides a measure of continuity and stability in Taiwan as it encounters a range of challenges, new and old. These challenges include reuniting Taiwan people after a fractious electoral campaign, offering a coherent strategy for managing Taiwan’s economy in the face of continued hostility from the PRC; and reinforcing relations with Washington, ahead of US presidential elections.