Washington knows how to do one thing well: pick a fight.
Potential sales of F-16 fighter jets and M-1 Abrams tanks to Taiwan is a sure fire way to tick off Xi Jinping, the Chinese president with whom Donald Trump is trying to sign a “great trade deal” as early as this month. Following another Steve Mnuchin/Robert Lighthizer lackluster showing in Beijing last week, all bets are off that China and the U.S. sign anything should the two presidents meet later this month as discussed. Taiwan is a new sticking point.
The U.S. hasn’t sold fighter jets to Taiwan since 1992 in an effort to appease China, which sees Taiwan as a breakaway province designed to sow political discord between Beijing and the West. Last week, the Trump administration responded to the Taiwanese president’s request for some of the biggest weapons made in the U.S., saying he was fine with the order.
The formal request still needs congressional approval. Beijing will lobby hard against it before Trump and Xi meet. No meeting date has been set.
Taiwan’s request is an unwelcome risk for ongoing U.S. China talks, says Chris Rogers, a senior analyst for Panjiva, the trade research division of S&P Global Market Intelligence. Taiwan’s president Tsai Ing-wen seems willing to ruffle feathers and challenge Trump, asking for the F-16 and the M-1 tank in order to “show the world the U.S. is committed to Taiwan’s defense,” Reuters reports.
“Should the U.S. approve the orders it would … jeopardize relations between the U.S. and China just as trade talks are due to reach a conclusion,” Rogers says.
Lockheed Martin builds the F-16V model that the Taiwan Air Force is after. The M-1 Abrams tank is built by General Dynamics Land Systems and is used in Iraq and Afghanistan.
Panjiva analysis of official figures shows that order approvals fell 16.6% year over year in 2018 to $48.1 billion. That was the worst year for heavy defense equipment—namely aircraft—since at least 2015 and was 23.6% below the final year of the Obama administration.
The new year has also opened slowly with just $9.2 billion of orders in the first three months of the year from $14.5 billion at the same time in 2018. Given President Trump’s prior focus on promoting the defense industry, there may be pressure to approve the orders and send them to Congress.
Worth noting, Taiwan was the third-largest buyer of U.S. military systems, including vehicles and weapons, in 2018 and the ninth-largest buyer of aerospace equipment including jets and helicopters, according to Panjiva.
Combined exports reached $436 million in 2018, up 18.5% year over year with aerospace accounted for 82.9%. For context, the tank order, which was first tried by Taiwan back in July 2018, would be worth $990 million, according to Jane’s Defense.
Even though China has seen U.S. weapons imported into Taiwan before, this size of the order and its timing could be a huge deal breaker for Trump.
China was ranked as the biggest security threat to the U.S. based on January’s World Threat Assessment published by the U.S. intelligence agencies. Trade wars are just part of the escalating crisis between the two sides, with the South China Sea being the newest military flashpoint. Taiwan was always a sleeping giant threatening to rattle China-U.S. relations, but sales of F-16s put an unwelcome spotlight on Taiwan.
Last Thursday, China’s defense ministry spokesperson Wu Qian said China “resolutely opposes” any weaponry sales to Taiwan, adding that any words or actions that undermine the one-China policy are “extremely dangerous,” Quartz magazine reported.
Foreign ministry spokesperson Geng Shuang also reiterated Beijing’s insistence on peaceful ties between Taiwan, the U.S. and China. “We urge the U.S. to fully realize the high degree of sensitivity and severe impact of this issue, honor its commitment to the one-China principle, and … stop arms sales to Taiwan.”
China’s Air Forced buzzed Taiwan on Sunday by allegedly flying across a no-fly zone for Beijing military in the Taiwan Strait. Taiwan scrambled fighter planes on Sunday morning to chase away two Chinese made J-11 Flanker B+ fighter jets.
Tsai and Xi are not on speaking terms. She has refused to accept China’s goal to eventually absorb Taiwan, and the latest call for U.S. war planes now puts Trump in the middle.
Any sale before a trade deal would be a huge stumbling block for Xi within the Communist Party back home, and any sale to Taiwan after a trade deal would be seen as a breach of trust by Xi. If Washington is looking for “enforceable” trade action, they are unlikely to get it if Beijing doesn’t get an enforceable agreement on Taiwan.