Beijing’s path to peaceful unification with Taiwan, long premised on dialogue with parties on the island, has reached a dead end. The Democratic Progressive Party openly seeks independence; the Kuomintang, despite its nominal opposition to that goal, defends a status quo that amounts to much the same thing. If unification without war remains possible, it now depends on a single external condition: that Washington, judging its own core interests, declines to obstruct it — or that its silence amounts to tacit consent.
That might be the true bargain behind Wang Yi’s April 30 call with Marco Rubio, in which the Chinese foreign minister told the US secretary of state that Taiwan represents the “greatest risk” in the bilateral relationship. Donald Trump’s reported visit to Beijing on May 14-15 will test whether a deal is on the table. He could propose that Beijing underwrites dollar settlement in oil and trade — including for Iranian and Venezuelan crude — and preserves the existing TSMC supply chain, in exchange for Washington winding down arms sales to Taipei and standing aside to allow a Beijing to begin a process of reunification.
The KMT will not deliver this. Cheng Li-wen’s tactical opposition to a NT$1tn budget cannot disguise the fact that Taiwan is now an item on a table set in Washington and Beijing, not a player at it. Had Ma Ying-jeou genuinely wanted reunification during his presidency, the opportunity was his. The party’s centre of gravity prefers a managed status quo — independence by another name. Cheng’s mainland visit reads less as an overture than as reconnaissance: gauging Beijing’s appetite for a short, sharp military option while collecting trade concessions on the return leg. The earlier mainland bet — that economic integration would generate shared identity — has plainly failed. Voters chose the DPP instead, and the share of Taiwanese who identify as Chinese has collapsed.
History is instructive here. Peaceful liberation in 1949 became possible only once the PLA stood at the gates of Beiping. The equivalent today would be the US Seventh Fleet — and, increasingly, the legal and financial architecture Washington is constructing in its place. The “Taiwan Protection Act,” reportedly passed by the House on February 9, 2026 by 395 votes to 2, is the clearest expression of that shift.
The very existence of the Act is an admission that Taiwan is no longer defensible by conventional means. US assessments of a strait conflict point to substantial losses and an uncertain outcome, with a non-trivial path to nuclear escalation. Washington has therefore moved from decisive battle to deterrence, substituting economic instruments for military ones — a substitution that itself signals diminished confidence in the Pentagon’s hand.
The bill, introduced by Republican Frank Lucas, would authorise the president to push for China’s exclusion from the G20, the Bank for International Settlements, the Financial Stability Board, the Basel Committee, the IAIS and IOSCO upon notifying Congress that PRC actions threaten Taiwan and US interests. The most consequential element is the BIS provision. The BIS — the “central bank of central banks” — is the closest financial analogue to the UN Security Council, and unlike at the UN, US influence within it is sufficient to make expulsion a credible threat. Removal from the BIS would make exclusion from SWIFT a short step rather than an independent battle. The bill includes a presidential waiver clause for cases where US national interests dictate restraint.
The puzzle is the Senate’s silence. Having unanimously passed the Taiwan Assurance Act on November 18, 2025, the upper chamber has so far declined to take up the Lucas bill. If it did, and Trump signed, Washington would on paper have built an economic deterrent of equivalent scale to a military one. In practice, both sides would be locked into a stand-off in the strait whose consequences would dwarf the current disruption around the Strait of Hormuz.
The reason is structural. China is the largest trading partner of more than 140 countries and the world’s leading industrial power. A G20 without it is a G20 in name only; global supply chains would seize, and US inflation would spike. The dollar’s status as a global currency rests on the willingness of others to hold and use it, and a shock of that magnitude would accelerate its retreat into a purely domestic instrument. Trump understands this. The bill is more useful as a card held than a card played — a pattern visible in his handling of Russia sanctions legislation, which has stalled in the Senate precisely because passage would foreclose negotiation. A nuclear-grade financial weapon loses its leverage the moment it is fired, and would damage its user as severely as its target.
From Beijing’s vantage point, US strategic anxiety reflects a thinning hand. Two carrier strike groups once settled questions in the strait; the First Island Chain no longer contains China in the way it once did. Hence the porcupine strategy — arming Taiwan to raise the cost of invasion — alongside legal and economic pressure delivered through Congress. Taiwan’s politicians read this clearly. Cheng Li-wen and Lai Ching-te both understand that the cross-strait military balance is no longer competitive, and that Taiwan’s position rests entirely on US geopolitical calculation. The island can watch the negotiation but not sit at the table.
For a transactional president, and for the Wall Street interests betting that artificial intelligence will reshape both the Chinese and global economies, the rational move is to negotiate a Taiwan settlement before Beijing reaches for the military option. Doing so preserves both dollar primacy and the US semiconductor position. A sober reading of the regional military balance suggests that even with Japanese support, the US could not prevent unification in waters close to the Chinese coast. Allowing the issue to drift risks an outcome in which, well before 2030, the question is settled by Beijing without Washington having meaningfully participated in the decision.
Washington’s best move now is to extract Taiwan’s residual value while it still can. If Beijing begins intercepting and confiscating arms shipments and Washington declines to respond militarily, the credibility of US primacy collapses overnight. Trump’s Beijing visit will determine whether a deal is reachable. If the talks are serious, the issue need not drag on. His bottom line is almost certainly US dollar dominance.