Wooed by Donald Trump, Taiwan Trembles

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By

Andrew Browne

Updated Dec. 6, 2016 4:23 a.m. ET

TAIPEIâ€"As soon as President Tsai Ing-wen won election this year, the long lines of mainland Chinese visitors waiting for pineapple cakes outside the Chia Te bakery began to shrink.

China switched off its tourist flows as economic punishment against a candidate with many pro-indepedence supporters. It was an instant blow to the owner of Taipei’s famous bakery, Chen Tang-peng, whose semisweet pastries delight Chinese palates.

Now, says the celebrated chef, Beijing has the island “by the throat.”

This vindictiveness is why many in Taiwan aren’t celebrating Ms. Tsai’s telephone call with Donald Trump, the first time a Taiwan leader has spoken with a U.S. President-elect since at least 1979, when Washington broke off formal ties and recognized Beijing.

And although the photograph of the historic moment shows Ms. Tsai wearing a satisfied smile as she hunches over a speaker phone, there’s been no public jubilation. People are bracing for Chinese retaliation, fearing Taiwan, not the U.S., will bear the brunt of Beijing’s ire.

Some on the island think Ms. Tsai may have been conned, and that Mr. Trump, ever the businessman, was merely playing the “Taiwan card” to put pressure on Beijing over the issue it regards as more important than all otherâ€"Taiwan’s status as part of “one-China.” China-bashing was a central part of his campaign and makes him look tough at home. Perhaps he believes it could have payoffs in negotiations with Beijing in other areas: the South China Sea, trade, North Korea’s nuclear program.

Taiwan should be wary of Mr. Trump’s outreach, says Lin Chong-pin, a former deputy defense minister. “When he turns, carrots can immediately become sticks. That’s his style.”

Ms. Tsai is well aware of the risks. The day after the call, the presidential office was urgently denying what it called “wild speculation” that Ms. Tsai would meet Mr. Trump face-to-face next month on her way to Central America.

The official line, repeated over and over, is that Taipei seeks balanced relations between Beijing and Washington.

Ever since the Chinese Kuomintang government retreated to Taiwan in 1949, the island has been a pawn in great power rivalry. Had it not been for the 1950-53 Korean War, when Chinese troops backed the North’s invasion of the South and confronted U.S. armies, Washington might have abandoned it altogether. Instead, it became a Cold War bastion to contain Communism.

As president-elect, Ronald Reagan talked about restoring diplomatic relations with Taiwan. Bill Clinton was well-disposed toward a place he’d visited as Arkansas governor. Early in his presidency, George W. Bush went out on a limb to declare that America would do “whatever it takes” to defend the island. Eventually, they all caved to Chinese pressure, prioritizing ties with Beijing.

Will Mr. Trump eventually fall into line behind Beijing’s cherished “one China” policy?

In fact, Taiwan’s most immediate danger is not that Mr. Trump will have a change of political heart but launch a trade war with China. Exports account for about 70% of Taiwan’s GDP, and 40% go across the Taiwan Strait, including high-value electronic components. Taiwan supplies sensors and chips for Apple’s iPhone, which are assembled in China by the Taiwanese company Foxconn Technology Group.

A 45% tariff on all Chinese exports, as Mr. Trump has threatened, would damage this trade and throw the island into recession.

The economy, once an “Asian Tiger,” has been struggling for decades. Ms. Tsai’s predecessor, Ma Ying-jeou, sought relief through even deeper economic integration with China, though that only enriched large corporations at the expense of ordinary workers. Wages are stagnant, while property prices are soaring. More than ever, Taiwan’s fate is in China’s hands.

Mr. Chen, the pastry chef, wraps his fingers around his neck to make the point. Tourist arrivals from mainland China plunged more than 40% in October from a year earlier. The cheaper hotels popular with Chinese tour groups are half empty; bus fleets are idle.

China is holding out for Ms. Tsai to acknowledge the “one-China” principle. She won’t, and so the strangulation gets tighter. China has choked off tourists to those counties controlled by Ms. Tsai’s Democratic Progressive Party.

Bonnie Glaser, an Asia expert at the Center for Strategic and International Studies, argues that if Mr. Trump really wants to show concern for Taiwan he could offer a free-trade agreement. That would be “a huge political boost,” she says.

Although Taiwan has free-trade arrangements with Singapore and New Zealand, China is standing in the way of future deals, and even blocks Taipei’s participation in international organizations like the U.N. air-safety body, the International Civil Aviation Organization.

Meanwhile, Ms. Tsai’s approval ratings are falling. The call with Trump gave her a morale boost, but it only deepens Mr. Chen’s predicament. Chinese tourists used to account for 30% of his salesâ€"sometimes a single customer would sweep every pineapple, cranberry and mung-bean cake off the shelvesâ€"but now that’s down to 10% and falling.

“It’s very serious,” he says. “In the end, of course, we just hope for peace.”

Write to Andrew Browne at andrew.browne@wsj.com

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