Beijing pressures Taiwan’s remaining diplomatic partners. Here's what the US should do in response

China Politics & Diplomacy Taiwan

Report December 15, 2025 • 2:30 pm ET

Beijing pressures Taiwan’s remaining diplomatic partners. Here’s what the US should do in response

By Kitsch Liao, Nik Foster, and Santiago Villa

Bottom lines up front

Taiwan’s official diplomatic partners play an important role in the island’s ability to directly engage the global community. Beijing is seeking to isolate Taiwan by peeling those partners away.
Countering Beijing’s isolation campaign could bolster deterrence by forcing China to question how big of an international outcry it could face if it violates Taiwan’s security.
This will require the United States to think seriously about the benefits it offers these partners and how it can team up with Taiwan to maintain the status quo.

Introduction

Taiwan occupies a fraught diplomatic position. Beijing claims sovereignty over the island, maintains a threatening presence around it, and seeks to push Taipei out of diplomatic circles to support its claims that only Beijing—and not the government in Taipei—can effectively represent the island. Taiwan, in contrast, seeks to maintain space for its democratically elected government to speak on its own citizens’ behalf and advocate for their interests in the international arena. From a deterrence perspective, the more Taiwan can advocate for its own interests with global stakeholders, the higher the international cost Beijing would pay for taking the island by force and, thus, the stronger the deterrence against doing so. Based on China’s own war plans,¹ Beijing’s first step in a coercive move against Taiwan would be to establish global information control: cutting Taipei off from the global community and claiming that Beijing speaks for the island. Beijing is laying that groundwork now, working across multiple fronts to isolate Taiwan and create maneuvering room for coercion. Chinese diplomats are pushing Taiwan out of United Nations (UN) bodies, keeping it from joining multilateral meetings, and bullying Taiwan’s smaller partners to push them to distance themselves from the government in Taipei. Taiwan’s diplomatic partners are a particularly important battleground. At present, Taiwan only has twelve official diplomatic partners that maintain a formal diplomatic relationship with Taipei. Those relationships—and Taiwan’s other partnerships—play a critical role in maintaining deterrence.

Washington’s role in Taiwan’s diplomatic positioning is unique and complicated. The United States aims to thread a delicate needle: acknowledging that there is “one China” and the Chinese Communist Party (CCP) is the government in charge while also deterring any attempts to take the island by force, which includes assistance to bolster Taiwan’s self-defense capabilities. The United States has always sought to tread lightly on the issue of Taiwan’s diplomatic partners. Washington “flipped” its own formal diplomatic recognition from Taipei to Beijing in 1979. Encouraging other nations to do what Washington did not—maintain a formal diplomatic relationship with Taipei—is diplomatically awkward. But changing times might call for new approaches. Most of Taiwan’s remaining diplomatic partners lie in the Western Hemisphere and the Indo-Pacific, two priority regions for deterring Chinese initiatives that directly threaten US security interests. This is especially true for the Western Hemisphere, which is a top priority for Donald Trump’s second administration. In both regions, there are nations that play an outsized role in Taiwan’s global diplomatic presence and allied efforts to deter Chinese coercion toward the island. The United States should consider developing a more targeted strategy for supporting these nations and the role they play in cross-strait stability.

This report will assess how Taiwan’s diplomatic partners contribute to peace and stability in and around the island, and what the United States and its allies can do to maintain, and potentially even bolster, this critical aspect of deterrence. It draws on extensive case studies from the Pacific Islands and Latin America and the Caribbean, obtained through in-depth interviews with representatives from Taiwan and its partners in those regions.

Taiwan’s democratic awakening and its diplomatic space

Taiwan’s complicated diplomatic status is rooted in its history. In 1945, the Republic of China (ROC), which had served as the ruling government on the Chinese mainland since the end of the Qing Dynasty in 1911 and fought on the allied side in World War II, accepted Japan’s surrender in Taiwan and took over the island’s administration pursuant to Allied General Order No. 1. In 1949, the CCP defeated the ROC in mainland China and the ROC fled to Taiwan, but the civil war continued. At that time, most nations still maintained formal diplomatic relationships with the ROC, which occupied the “China” seat at the United Nations (claiming to represent all of China at the time, including Taiwan and Mongolia) from its island perch.

In the 1970s, as the CCP’s power grew, many countries began to support its claim as the sole legitimate government of China, shifting their diplomatic recognition from Taipei to Beijing.² In 1971, recognizing that the ROC no longer enjoyed majority UN support to occupy the “China” seat, the ROC government in Taiwan preemptively left the United Nations as a formal nation-state member. In 1979, the United States switched its own diplomatic recognition from the ROC in Taipei to the People’s Republic of China (PRC) in Beijing. Since then, Washington has maintained an official diplomatic relationship with Beijing and an “unofficial” relationship with Taipei. However, this is based on an assumption that Beijing will not seek to take Taiwan by force. The 1979 Taiwan Relations Act (TRA) states that the US “decision to establish diplomatic relations with the People’s Republic of China rests upon the expectation that the future of Taiwan will be determined by peaceful means.”³ The United States also pledged in the TRA to “provide Taiwan with arms of a defensive character” and “maintain the capacity of the United States to resist any resort to force or other forms of coercion that would jeopardize the security, or the social or economic system, of the people on Taiwan.”⁴

In 1996, Taiwan held its first direct presidential election, marking the island’s official transition to democracy. Throughout the 1980s and 1990s, Taiwan’s growing democratization brought identity issues to the fore. Those who came to Taiwan in 1949⁵ with the Kuomintang (KMT) brought ties from the mainland and largely supported the idea of a Chinese nation including both the mainland and Taiwan. By the 2000s, the KMT had begun to prioritize a close and peaceful relationship with Beijing. In contrast, Hoklo Taiwanese who immigrated to the island prior to 1949 were generally more suspicious of Beijing. They tended to support an independent Taiwan—separate from mainland China—and to identify with the Democratic Progressive Party (DPP).

As the island developed its own identity at home, Beijing steadily pushed Taiwan out of international spaces abroad. In 1969, Taiwan had seventy official diplomatic partners. By 1996, that number was down to thirty. Taiwan lost its membership in international organizations such as the World Bank and the International Monetary Fund. Successive democratically elected leaders in Taipei tried to find ways to thread a tricky diplomatic needle: maintaining Taiwan’s international presence without claiming to also represent mainland China or directly refute Beijing’s claim to represent the island, either of which would trigger conflict with the CCP.⁶ From 1988 to 2000, then President Lee Tung-Hui (a KMT politician) positioned the island as the “Republic of China on Taiwan” in a bid to carve out space for Taiwan at the United Nations, separate from Beijing’s China but without declaring independence from Beijing. This became a compromise term within Taiwan, one that Taiwan’s pro-independence crowd and those who still believed in a single China under the ROC (including both the island and the mainland) could both accept politically. All of Taiwan’s presidential administrations (including the present one) have maintained this official position.⁷

From 2000 to 2008, then President Chen Shui-Bian’s DPP administration tried to use Taiwan’s then superior economic resources to cultivate new diplomatic partners. That effort was largely unsuccessful. From 2008 to 2016, under then President Ma Ying-Jeou’s KMT administration, Beijing agreed to a “diplomatic truce” in which it would not seek to poach Taiwan’s diplomatic partners and the Ma administration would refrain from asserting Taiwan’s sovereignty on the international stage. Beijing was willing to offer this olive branch because it correctly viewed the KMT as more accommodationist toward Beijing than the DPP. This approach preserved Taiwan’s partners but confused them regarding Taiwan’s status vis-à-vis Beijing.

Everything changed in 2016. The people of Taiwan elected DPP candidate Tsai Ing-Wen as president (2016–2024). Beijing despised Tsai because her electoral success represented a step back in China’s ambitions to “reunify” the island with the mainland and bring it under CCP control. The Chinese government responded with a scorched-earth approach that ratcheted up the pressure on Taiwan across all domains. Militarily, Beijing increased its military exercises around Taiwan and incursions into Taiwan’s air defense identification zone (ADIZ). On the diplomatic front, Beijing stepped up the old “three none policy,” which aims to leave none of Taiwan’s diplomatic partners standing, none of Taiwan’s international space intact, and Taiwan with none of the bargaining chips it needs to negotiate on equal grounds.⁸ In the multilateral space, Beijing began driving Taiwan out of arenas such as the World Health Organization that do not require nation-state status and that Taiwan had participated in up to 2016. The Chinese government also ramped up its campaign to pressure Taiwan’s remaining diplomatic partners to flip their recognition from Taipei to Beijing. From 2016 to 2023, the island’s diplomatic partners decreased from thirty to twelve. Even those nations that had already recognized Beijing as their official diplomatic partner (while maintaining unofficial relationships with Taiwan) faced intense Chinese government pressure to reduce or curtail their engagements with Taiwan.

Today, ten of Taiwan’s twelve remaining official diplomatic partners are located in two regions: the Pacific Islands and Latin America and the Caribbean.

Beijing is waging a campaign in these regions to further isolate Taiwan. In order to counter this campaign, it is critical to first understand how it has unfolded thus far. The campaign includes a mix of carrots and sticks. On the inducement side, China seeks to entice countries to switch their allegiance by offering an array of economic benefits: access to China’s market, infrastructure investments, loans, and more.⁹ China is very public about its inducements but tends to wield the sticks behind closed doors. This report draws on interviews with government officials and journalists from Taiwan and six of Taiwan’s remaining diplomatic partners, as well as two of its former diplomatic partners, to map the range of tools Beijing deploys in its campaign to isolate Taiwan.

The following sections utilize four case studies—Palau, St. Lucia, the Dominican Republic, and Honduras—to illuminate Beijing’s tactics.

Palau: Coercion and promises

Palau is one of Taiwan’s most important partners in the South Pacific, maintaining reciprocal embassies and direct engagement with Taipei. Taiwan has provided technical assistance to Palau since 1984, including agricultural and engineering assistance. Starting in 2017 (after the people of Taiwan elected a DPP presidential administration), the Chinese government launched a coercive campaign to push Palau to derecognize Taiwan. This has particular significance for the United States because Palau is a Compact of Free Association (COFA) member, granting basing access to the US military in exchange for US assistance. China’s success in flipping Palau would thus rob Taiwan of a diplomatic partner and also potentially undermine the US military’s ability to operate in the Indo-Pacific.

Prior to COVID-19, tourism contributed more than 40 percent of Palau’s gross domestic product (GDP), with 60 percent of tourists coming from the PRC.¹⁰ Beijing leveraged these ties for economic coercion against Palau. In November 2017, Beijing banned Chinese tour group travel to Palau as part of a broader coercion campaign against multiple Taiwan partner nations.¹¹ To restrict tourism from all nations, Chinese-owned and operated hotels on Palau blocked bookings for months at a time, keeping rooms empty to prevent tourists from visiting the island and hiking up prices for airlines seeking accommodation for overbooked passengers. In 2024, the Chinese government declared Palau unsafe to travel.¹² Beijing also banned Palau’s presence at the Pacific Asia Travel Association in Macau, despite Palau being a member.¹³

Palau—along with other Pacific Island countries—also faces Chinese government bullying in regional settings such the Pacific Islands Forum (PIF). In 2022, despite being barred from attendance, China attempted to attend the PIF Summit for the Suva Agreement, an agreement on how future PIF leadership will be elected and rotated between all members. The representative was removed but later demanded bilateral meetings with individual members and lobbied for China’s own draft version of the agreement on how to determine future PIF leadership. The attempt failed but a source in Palau was alarmed and saw Beijing’s attempted interference as an example of how Beijing could target Palau and other regional Taiwan partners on Taiwan-related issues during multilateral meetings.¹⁴

China has also increased maritime harassment near Palau’s territorial waters and submarine cables, with Chinese research vessels entering Palau’s exclusive economic zone (EEZ) without notification and getting within range of sensitive facilities on the island.¹⁵ Beijing times these incursions to coincide with storms, when the waves are too high for Palauan patrol boats to intercept them.

Due to these ongoing activities, there is substantial anti-China sentiment in Palau. Yet Beijing promises benefits if Palau switches recognition, including promises to “flood Palau with visitors” and satisfy “whatever Palau needs.”¹⁶

Thus far, local support remains lukewarm, driven by an inability to articulate the benefits of siding with China and the exact vision of such a future, as well as concerns around regional experiences such as China’s takeover of Sri Lanka’s Hambantota Port and the way unsustainable Chinese lending contributed to Tonga’s astronomical debt.¹⁷ There are also regional examples that do not instill confidence, including an instance in which Chinese firms bought a lease for land development in Palau but never followed through, China’s unfulfilled promise to Kiribati for an airstrip, and the opacity of Kiribati’s dealing with Beijing.¹⁸ One source indicated that, while loan-based projects offered by Taiwan have negotiated fixed interest rates, China tends to manipulate interest rates and is reluctant to provide grants, share expertise, or address local concerns.¹⁹ In addition, China tends to extend the grace period of repayment without extending the maturity, resulting in a spike in repayment amounts for the last few years and placing enormous pressure on island governments.²⁰

A diplomat from one of Palau’s Pacific neighbors also complained that while they regularly tried to talk to China about their own development needs, Beijing rarely listened. Instead, China came back with its own economic development concepts, designs, engineers, and contractors, and was not open to consultation.

While local experts estimate that about one-third of Palauans might consider switching recognition to China in the future, Palau President Surangel Whipps, Jr., is strongly anti-China, declaring “Palau is already at war with China.” This moment, in which China has adopted a “biding its time” approach to neutralizing Palau, presents a good opportunity to reassess Taiwan and the United States’ strategy for empowering Palau and blocking further PRC encroachment into the Pacific.

St. Lucia: Coercion and unfulfilled promises

The island nation of St. Lucia is a unique case in that it initially flipped diplomatic recognition from Taipei to Beijing in 1997 but flipped back to Taipei in 2007. Those flips followed electoral shifts: the St. Lucia Labor Party (SLP) came to power in 1997 (triggering the first flip) and the United Workers’ Party (UWP) in 2007 (triggering the second). Along the way, China’s unfulfilled economic promises grew stale. When the SLP regained power in 2011, coinciding with China and Taiwan’s diplomatic truce under Ma and the KMT, the SLP decided that sticking with Taiwan was in St. Lucia’s best interest.

St. Lucia’s initial switch to Beijing was partially motivated by then Foreign Minister George Odlum’s desire to jumpstart major infrastructure projects. Beijing promised St. Lucia a fifteen-thousand-seat football stadium and a national mental health hospital. However, Beijing lost interest in these projects after it achieved St. Lucia’s diplomatic switch. Both projects became emblematic of unmet promises. After signing a memorandum of understanding (MoU) to develop the stadium, China determined—without consulting St. Lucia—that the island did not require such a large stadium. Beijing unilaterally downgraded the plan to a smaller, 7,000–8000-seat stadium. Sources interviewed for this report expressed great displeasure with the downgrade and the fact that St. Lucia was not consulted. The electronic scoreboard for the smaller stadium stopped working a week after installation and the steel railing around the audience seating area began to crumble from rust soon after. The St. Lucian government considered demolishing the stadium, but ultimately decided to turn its clubhouse into an outpatient area for a local hospital. Chinese contractors never finished the national mental hospital; the project dragged on in a ten-year design and construction process.

By 2007, St. Lucia decided it had made a mistake in switching to Beijing and that Taiwan’s previous assistance was more valuable than Beijing’s unfulfilled promises. Once the UWP regained power, the pro-Taiwan John Compton cabinet orchestrated a switch back to recognizing Taiwan. Beijing responded by dismantling the partially constructed national mental hospital. Chinese firms took everything that was remotely useful from the site—including parts from unfinished elevators, cables, and other materiel—for transport back to China. They then salted the earth around the hospital so nothing could grow there. The hospital, however, was later completed with Taiwan’s assistance after the 2007 switch.

The 2008–2016 diplomatic truce between China and Taiwan (during the time when Taiwan elected KMT presidential administrations and Beijing sought better relations with the island) limited China’s overt retaliatory actions against St. Lucia. However, covert efforts continue. Of particular concern, Beijing appears to be leveraging regional settings such as Caribbean Community (CARICOM) meetings to pressure its own partners in the Caribbean to induce or coerce Taiwan’s regional partners to switch recognition.²¹ These forums are intended to focus on economic issues, but the nations that recognize Beijing periodically bring up Taiwan’s recognition in ministerial meetings. When pressed, representatives from those nations have admitted that they are doing so due to Chinese pressure.

From St. Lucia’s perspective, Taiwan has proven to be a steady partner. Following its disastrous infrastructure deals with the PRC, St. Lucia pivoted to focus on developing existing agricultural industries such as bananas and watermelons, two products that Taiwan’s agricultural experts have a strong technical background in. As a small island developing country, St. Lucia prioritizes education and healthcare, and Taiwan’s more flexible and responsive aid and scholarship programs were well received by the local population. Taiwan’s International Cooperation and Development Fund (ICDF) and its Ministry of Foreign Affairs join forces to offer roughly forty scholarships exclusively for St. Lucian students to study in Taiwan every year, predominantly for undergraduate degrees. Taiwan’s first post-2007 ambassador also pioneered and paid for local irrigation cannels that subcontract local labor for construction. While relations between St. Lucia and Taiwan remain strong, this moment calls for Taiwan and the United States to organize a “best fit” plan to integrate St. Lucia into the United States’ and Taiwan’s industrial and agricultural supply chains.

The Dominican Republic: Flip leads to frustration

The Dominican Republic established diplomatic relations with the PRC in 2018 and cut relations with Taiwan. The sources consulted for this case study—who include high-ranking public officials, former cabinet members, and industry association leaders—said hopes were high about the advantages of strengthening relations with China. They also agreed that these hopes have not been realized, and that the Dominican Republic is generally frustrated with the results.

China began engaging the Dominican Republic (DR) in the 1990s, when the latter was still a Taiwan diplomatic partner, signing an economic and diplomatic cooperation agreement with Santo Domingo in 1993 and opening commercial offices in the Dominican Republic. Diplomatic collaboration between Santo Domingo and Beijing widened in the 2000s, including mutual support when either nation applied for seats in UN offices and councils.

In 2005, Beijing decided to launch a pressure campaign to push the Dominican Republic to flip its official diplomatic partnership from Taipei to Beijing. Then Foreign Minister Carlos Morales Troncoso met then PRC Vice President Zeng Qinghong to discuss plans for President Leonel Fernández’s to visit China. At that meeting, Zeng claimed that the Dominican Republic had committed to establishing diplomatic relations with the PRC when signing the 1993 economic agreement, and that the PRC was increasingly upset that the commitment hadn’t been honored. Zeng also said that a friend of Taiwan was an enemy of China. He reminded the foreign minister that, without formal diplomatic relations between the PRC and the Dominican Republic, the PRC could not receive the DR president as a head of state and thus the president’s planned visit to China could not proceed as planned.

Taiwan tried to keep the Dominican Republic onside with new investments and commitments. In 2018, then President Danilo Medina announced the Dominican Republic would cut relations with Taiwan and pivot to the PRC. Administration officials publicly denied it would take place until they suddenly announced it. The private sector generally welcomed the change. A national business association publicly praised it, noting that major Dominican importers of machinery and other goods had created sustained pressure for flipping to China. Meanwhile, the PRC helped the Dominican Republic’s effort to attain a UN Security Council nonpermanent seat. This was something the Dominican Republic failed to secure several times between October 2001 and 2018 but—only thirty-eight days after switching diplomatic recognition—it succeeded, backed by Beijing’s lobbying, winning the General Assembly vote with 184 out of 190 ballots.

However, expectations soon soured. Business leaders have been especially disappointed with the PRC’s commercial penetration via stores that sell all kinds of cheap goods—sometimes in direct competition with Dominican products—and use Chinese clerks and Haitian laborers instead of employing Dominican nationals. This dislocated Dominican commercial institutions and disrupted all levels of commerce. Chinese companies also evade local regulatory guidelines. When tax and customs authorities attempt to audit PRC businesses for tax evasion, these businesses have been known to evade enforcement by relocating or opening another operation with a different name and commercial registration.

There are also concerns about illegal mining. PRC mining companies have exported bauxite at suspiciously high volumes and prices because their exports actually contain higher-value titanium dioxide and rare earths. PRC companies have acquired copper mine rights from the Dominican Mining Corporation (CORMIDOM) and there are rumors of Chinese operations in the Falcondo ferronickel project. At present, DR officials do not seem to be seriously considering flipping back to Taiwan as St. Lucia did. However, there is growing DR interest in welcoming Taiwan to establish a commercial representative office in the Dominican Republic, which would be consistent with how most nations balance official relations with China and unofficial relations with Taiwan. Dominican officials state that, when the Medina government negotiated the pivot, it did not accept Beijing’s demands for an exclusivity clause preventing relations with Taiwan. They point out that all of China’s BRICS (Brazil, Russia, India, China, and South Africa) partners—as well as Japan, South Korea, and the United States—maintain unofficial relations with Taiwan.

Case study: Honduras

Honduras established diplomatic relations with what was then the government of China in 1941, when the ROC government still resided on the mainland. Tegucigalpa continued diplomatic relations with Taiwan until March 2023, when the new government under Xiomara Castro severed ties, established formal relations with the PRC, and announced that Honduras recognized “only one China in the World” with Beijing its sole and legitimate government.²² Castro made switching diplomatic relations part of her campaign for office, in contrast with her predecessor Juan Orlando Hernández (2014–2022). The shift reflected growing economic pressure, including Honduras’s high external debt, Taiwan’s refusal to forgive a $2.45-billion loan, and enticements such as the lure of a free trade agreement with China and promised Chinese investment in a hydroelectric dam that Taiwan was unable to match.²³ Conversations with a Honduran journalist confirmed this account: the Honduran government issued “a kind of diplomatic ultimatum to Taiwan” to renegotiate Honduras’s debt with Taiwan and support public infrastructure construction.²⁴

While Honduras tried to negotiate better concessions from Taiwan, China’s tactics included a combination of threats and enticements that influenced the Honduran government’s decision.²⁵ Two years after the switch, a closer look at the actual fallout illuminates some of the short- to medium-term impacts.

In July 2023, following the flip, China and Honduras began negotiating a free trade agreement (FTA) that promised to reduce or eliminate tariffs and improve access to the Chinese market for Honduran exports. Early negotiations also laid out a framework around “comprehensive and in-depth” consultations on trade in services as well as investment protections and rules.²⁶ While still ongoing, the FTA negotiations reached an “early harvest” agreement that both countries signed in early 2024.²⁷ Honduras hasn’t joined the Belt and Road Initiative (BRI) but signed two MoUs—one in June 2023 and a second in December 2024—as part of the process to join.

To many Hondurans in the business sector, the results of the FTA have been meager so far and private-sector sources interviewed for this report have complained about not being sufficiently represented in the FTA negotiation committee.²⁸ Shrimp producers and exporters were the main losers from the diplomatic pivot. Cutting ties with Taiwan—the industry’s principal buyer—devastated the sector, and exports fell by 67 percent after Honduras switched recognition and Taiwan terminated the Honduras-Taiwan FTA.²⁹ Interviewed sources framed this loss within a broader concern about replacing a trade partner with which Honduras maintained a positive balance (Taiwan) with one with which it holds a large deficit (the PRC).

Since the pivot to the PRC, local businesses in Honduras’s main cities have grown increasingly uneasy about the growing number of Chinese-owned establishments competing with them. One source cited rising Sinophobia among local shop owners as a concern. Labor law compliance has also drawn attention, and recent reporting revealed that Chinese construction companies employ a higher percentage of Chinese workers than Honduran regulations allow.³⁰

While the Castro government will leave office at the end of January 2026, and both candidates vying for the presidency vowed to reengage Taiwan, the way the Castro government engaged with China is illustrative for other countries in the region. Both local sources cited above warned that information about negotiations between the Castro government and the PRC is worryingly opaque. There is little public knowledge about the content of the ongoing FTA talks, and business leaders report feeling inadequately represented.³¹ They also noted that only one of the seventeen diplomatic agreements signed between the PRC and Honduras in 2023 has been even partially implemented. One local journalist interviewed for this report said analysts have cautioned that China is a demanding creditor—unlike development partners that offer flexible debt renegotiation—and warned that access to public resources and strategic infrastructure could be jeopardized if Honduras misses payments. He added that the lack of transparency and anti-corruption oversight in Chinese credit lines is also troubling.

Another local journalist observed that while PRC-funded projects to improve education and build agricultural schools have progressed, they remain incomplete. Meanwhile, Taiwan’s scholarship program has been suspended. Honduran students still studying in Taiwan receive inadequate support, and the PRC has yet to meaningfully replace this program as promised.

Finally, local journalists expressed concern about Chinese censorship and surveillance. The Chinese embassy issued a press release condemning critical coverage of the shrimp export collapse by Honduran outlet El Heraldo. The embassy demanded that the newspaper refrain from referring to Taiwan as separate from mainland China, claiming such phrasing violated the “one China” policy. Although the press release was later removed from the embassy website following public backlash, local journalists interpreted it as an attempt at censorship. These concerns compound existing fears about surveillance, especially after the national telecommunications company signed an agreement with Huawei to provide police monitoring technology and security camera systems—an arrangement that could enable Chinese government espionage and raises national security concerns.

Lessons and recommendations for Taiwan, its partners, and the United States

A closer look at China’s engagement with Taiwan’s current and former partners reveals a concerning pattern. China consistently targets Taiwan’s partners with diplomatic and economic pressure urging them to switch their official recognition to Beijing. Once that happens, China’s interest in and support for the target nation appears to diminish, as reflected by the lack of follow-through on promises made to countries in the years following a switch. As a result, these countries face economic loss on two fronts. They forgo the benefits they previously gained working with Taiwan, and the engagement with Beijing either fails to meet their expectations or, as in the Dominican Republic’s (and potentially Honduras’s) experience, brings new models of commerce that undercut local production and the local tax base. As a journalist in one of these countries put it, there was “no golden pot at the end of the rainbow.”³²

This pattern presents an opportunity for Taiwan to proactively engage its remaining diplomatic partners to prevent economic and diplomatic disengagement. It also serves as a warning to countries considering switching recognition. Lastly, given that most of Taiwan’s partners are in Latin America and the Caribbean and the Indo-Pacific—two regions of utmost strategic importance to the United States—these case studies also present opportunities for the US to reengage with Taiwan on jointly maintaining those partnerships.

Taiwan

The interviews and case studies conducted for this report suggest five key recommendations for Taiwan.

Clarify exactly what Taipei gains from diplomatic partnerships. If certain relationships are a high priority, invest to maintain them.

Taiwan lacks a clear strategy for leveraging diplomatic partners as deterrence against China. It needs one. If certain nations are critical for Taiwan’s international presence and voice, Taipei should prioritize and invest in them. Many diplomatic partners expressed confusion over Taiwan’s stance on sovereignty and cross-strait issues. More communication is needed if these partners are to support Taiwan’s diplomatic standing. Alternatively, if commercial engagement suffices for deterrence and diplomatic recognition is less important, Taiwan should shift its resources accordingly and focus on those nations that are a priority for other reasons, regardless of their diplomatic stance.

Highlight China’s broken promises.

Based on the case studies above, when China uses inducements to bring about a flip in recognition, these promises often fall short. Taiwan should share these examples widely with current partners.

Offer what Taiwan can, and coordinate with the United States and likeminded countries.

Countries’ needs differ depending on their unique circumstances and levels of development. Aid should match Taiwan’s strategic goals of preserving diplomatic space and imposing costs on China, and should include some of Taiwan’s competitive advantages—bespoke aid and technological assistance that addresses specific needs of small island countries. Taiwan should also leverage US and allied efforts to counter Chinese influence, collaborating on solutions such as integrating Taiwan’s current and prospective diplomatic partners into trusted supply chains where doing so makes economic sense for all parties.

In the case of St. Lucia, while a US-Taiwan joint assistance effort has been discussed since 2018, little concrete cooperation has materialized. Taking inspiration from Taiwan’s recent efforts to integrate Guatemala into the US-Taiwan semiconductor supply chain, and from the second Trump administration’s focus on the Western Hemisphere, the United States and Taiwan should leverage their respective technical expertise and available resources to elevate St. Lucia’s economic position by integrating it into global supply chains or channeling transnational tourism such as cruise ships to St. Lucia, among other strategic partners in the region.

The Dominican Republic needs support with both agriculture and housing, two areas where targeted assistance from Taiwan would be very welcome. Taiwan could contribute significantly through academic and scientific collaboration and commercial partnerships around advanced mechanization, modernization, and automation of the Dominican Republic’s agriculture sector. With regard to housing, Taiwan could bring its expertise in construction of large housing complexes to the Dominican Republic. With a historical housing deficit exceeding 1 million units, the Dominican Republic desperately needs capabilities to assist in this area (and Beijing is not delivering on this front, creating an opportunity to build other partnerships).

Increase capacity building and law-enforcement cooperation.

In Palau, the Global Cooperation Training Framework (GCTF) interventions have received high praise for their contribution to capacity building in cybersecurity and investigating artificial intelligence (AI)-related criminal activities. However, additional efforts in training and equipment are needed to ensure the Palau government has what it needs to ensure transparency and independence from Chinese maritime coercion.

Similarly, in the Caribbean, St. Lucia relies heavily on foreign assistance for both its current stability and future development. Capacity building programs such as those provided by the GCTF received universal praise from sources interviewed for this report. These workshops covered topics from empowering local women to start businesses to maritime disaster prevention to counter-narcotics. Drug trafficking through the region, specifically the gun violence associated with narcotic activities, poses a significant threat to St. Lucia’s major industry of tourism. Additional joint efforts by the United States and Taiwan in this area should prove beneficial to trilateral interests. The United States is St. Lucia’s main source of tourism, so these efforts would also directly benefit the United States by keeping Americans safe and reducing trafficking into the United States.

Maintain a principled approach to diplomatic outreach.

While the PRC pressures its regional partners to exclude Taiwan and counter US influence, the United States and Taiwan should leverage regional settings to highlight their principled approach. Two cases highlight these contrasting approaches. In 2017, Hurricane Maria devastated the Commonwealth of Dominica. Dominica requested aid from Taiwan through the Organization of Eastern Caribbean States (OECS) and Taipei agreed, even though Taiwan does not have an official diplomatic relationship with Dominica. In contrast, when Taiwan’s diplomatic partner St. Vincent and the Grenadines experienced a volcano eruption in 2019 and requested assistance from China through the OECS, Beijing refused to provide aid on account of the country’s diplomatic ties with Taiwan. Beijing’s actions affirmed its political priorities over humanitarian ones and provided an opportunity for the United States and Taiwan to demonstrate their more principled stance.

For Taiwan’s partners

Lessons from countries that switched to China include the following:

View China’s promises with caution.

Honduras swapped a positive trade balance with Taiwan for a trade deficit with China, while Chinese-owned establishments undercut local Honduran businesses. Similar patterns emerged in the Dominican Republic, where Chinese stores sell cheap consumer products that compete with domestic production rather than transform the Dominican productive structure or integrate PRC firms into export-oriented or domestic manufacturing.

Honduran shrimp farmers suffered greatly, with exports declining by 67 percent after Honduras switched its recognition to China and Taiwan terminated its FTA. St. Lucia saw China fail to address World Trade Organization (WTO)-related losses stemming from the “banana wars,” a long-running trade dispute (1993–2009) between the European Union (EU), the United States, US-based banana companies (e.g., Chiquita, Dole), Latin American banana-producing countries (Ecuador, Guatemala, Honduras), and Caribbean small-island exporters, including St. Lucia.

Two years after the switch, China had only implemented one of the seventeen agreements it signed with Honduras. In the Dominican Republic, the expected and hoped for influx of Chinese investment and construction never materialized. Instead of producing aluminum at a plant in the Dominican Republic, Chinese investors imported aluminum from China and labeled it as locally made. In St. Lucia, construction of the national mental health hospital dragged on for ten years and was finished only after Taiwan stepped in.

For the United States

Partner with Taiwan to support local needs including disaster relief.

The United States should consider helping to sustain Taiwan’s official diplomatic relations as a means to uphold the international status quo and deterrence. To that end, it could deepen cooperation between the US Development Finance Corporation (DFC) and Taiwan’s International Cooperation and Development Fund (ICDF), providing infrastructure and economic growth programming to Taiwan’s partners. Expanding the MoU between the American Institute in Taiwan (AIT), the Taipei Economic and Cultural Representative Office in the United States (TECRO), and the DFC would leverage the DFC’s financial tools and the ICDF’s trusted presence.³³ Additionally, the increased US military presence and base access in the Western Hemisphere can also provide, in conjunction with Taiwan’s ICDF and NGOs such as Tzu Chi, increased capacity for disaster relief for Taiwan’s diplomatic partners in the region.

Moreover, future friendshoring and nearshoring efforts targeting Taiwan’s partners should ideally be done in coordination with the United States and its allies. Current joint US and Taiwanese efforts to include Guatemala in the semiconductor supply chain could be a template for these future endeavors.³⁴ Future joint initiatives could focus on resilient infrastructure, renewable energy, and digital transformation—areas in which both Washington and Taipei seek to counterbalance Beijing’s state-led investments under the BRI.

Increase technical support and leadership for strategic local communities.

Technical support and aid from the United States and Taiwan are both visible and popular in Palau but are seen as underwhelming. The US military recognizes Palau’s strategic significance for future conflicts with China and conducts air defense exercises there, firing PATRIOT missiles from Palau into the surrounding ocean. Local residents know a single training round costs around $1.5 million. They see a disparity between what the United States spends firing missiles from the island versus its meager investments in the infrastructure assistance Palau urgently needs. Working with local communities to identify and fill targeted local infrastructure needs would go a long way toward winning local hearts and minds.

Similarly, a coalition of Pacific countries that includes the United States could help to counter China’s playbook in the Pacific. China often bullies individual smaller countries in bilateral meetings on issues concerning the United States and Taiwan, while playing them against their neighbors. And with enough countries in its pocket, China can then manufacture regional consensus in regional multilaterals against US and Taiwanese interests. To that end, the United States and Taiwan should leverage the close-knit nature of Pacific communities, counter China’s attempts to monopolize regional meetings, and strengthen US-Pacific ties through subnational diplomacy (such as close ties between American Samoa, Guam, Hawaii, and Pacific countries). Holding future regional forums on US territories that discuss regional affairs and collaboration would counter China’s influence playbook by leveraging the US presence and stake in the Pacific, something China sorely lacks.

Conclusion

Maintaining Taiwan’s diplomatic relationships is not a sentimental task; it is a matter of strategic deterrence for both Taipei and Washington. Beijing does not execute a global diplomatic campaign without a purpose. It is systematically targeting Taiwan’s partners in a bid to isolate the island and provide more maneuvering room for potential future Chinese coercion against Taiwan. Slowing that progression could provide a countervailing force, causing China to question how big of an international outcry it could face if it violates Taiwan’s security. And there are weaknesses at the center of Beijing’s approach. From Honduras and St. Lucia to the Dominican Republic and Palau, these case studies reveal a consistent pattern: China couples high-visibility promises with diplomatic and economic coercion but often underdelivers once it achieves its goal of flipping recognition. Moreover, countries often find themselves more economically vulnerable and more exposed to opaque governance and policies after the switch, since China rarely discloses financial details of its loan or investment, nor does it require their partner countries to do so for their populace. By contrast, Taiwan’s engagement—while often under-resourced and strategically under-articulated—tends to be steadier, better at addressing actual needs, more reliable, and better aligned with partner countries’ long-term development goals.

For Taipei, there is an urgent need to clarify Taiwan’s diplomatic and strategic objectives with partner countries. If there are material benefits to having more diplomatic partners or keeping certain nations onside, then Taiwan should invest in these nations accordingly, share “buyer beware” lessons learned from recent switchers, and coordinate with the United States and likeminded partners and democracies to address the needs that Taiwan cannot meet alone.

For Taipei’s partners, the pattern of China’s behavior suggests the need to carefully weigh Beijing’s short-term inducements (and any political wins they might produce for local officials) against long-term structural economic imbalances and overreliance on the PRC, as well as recognizing the strategic value of ties with Taiwan, especially vis-á-vis the United States.

For Washington, there is an urgent need to make its own assessments about exactly what Taiwan’s diplomatic partners mean for the island’s peace and stability. If these relationships bolster deterrence, then the United States has an interest in maintaining the status quo. Given China’s campaign to further undermine it, that requires countering China’s actions to peel Taiwan’s partners away one by one. That will require the United States to think seriously about the benefits it offers these partners and how it can team up with Taiwan to offer a stronger economic deal. The United States already has a joint partnership agreement with Taiwan on development activities in third-party countries, via the DFC-ICDF Memorandum of Understanding on Advancing Private Sector Investment Opportunities signed in 2024. The State Department should consider putting current Taiwan diplomatic partners on the list for targeted projects next year, when the United States and Taiwan will likely convene their next Economic Prosperity Partnership Dialogue.

For decades, the United States has coasted on the issue of Taiwan’s formal diplomatic partners, standing back and watching China execute flips, but largely staying on the sidelines due to discomfort around the fact that the United States itself flipped recognition in 1979. Washington must recognize that coasting will result in the number of Taiwan’s official partners diminishing further. If Washington and Taipei decide that is not a concern, then coasting can continue. If, however, both sides agree this is a key element in deterrence, then both sides will need a much more targeted diplomatic approach. China stopped coasting in 2016 and hasn’t slowed down since.

About the authors

Staff

Kitsch Liao

Associate Director

Global China Hub

China Security & Defense

Fellow

Nik Foster

Nonresident Fellow

Global China Hub

China Energy & Environment

Fellow

Santiago Villa

Nonresident Fellow

Global China Hub

Africa China

Acknowledgements

This report is the culmination of a year-long research project made possible through the generous support of the Taipei Economic and Cultural Representative Office in the United States (TECRO).

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Image: Taiwan President Lai Ching-te welcomes Tuvalu Prime Minister Feleti Teo, in front of the presidential office in Taipei, Taiwan November 18, 2025. REUTERS/Ann Wang

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