Having spent the better part of a decade in Mainland China first as the head of a top U.S. management consulting firm, and then leading a Western company, I made regular trips to Taipei in the early 2000s. I had a front-row seat to the political economies on both sides of the strait. What I observed then feels newly relevant as Kuomintang chair Cheng Li-wen makes her first mainland visit in a decade — a trip analysts describe as freighted with political signalling ahead of an expected Trump visit to Beijing.
Taipei’s political economy, as I encountered it, was one in which entrenched elite networks shaped business access in ways that would be familiar to anyone who has operated in captured markets. The island was prosperous and democratic, but its governance had a transactional quality that extended well beyond the ballot box. Washington’s strategic umbrella over Taiwan has never been purely altruistic. It has served American interests — commercial, military, and geopolitical — and the island’s elites have long understood that the price of protection is a degree of deference.
That dynamic is not unique to Taiwan. The major Western European powers find themselves in a structurally similar position. Their security has been underwritten by the United States for decades, and the cost of that arrangement is now being renegotiated loudly and publicly by a Washington that no longer sees strategic patronage as its default posture. Trump’s transactional approach to alliances — whether directed at Gulf monarchies, NATO partners, or Asian allies — is less a rupture than an unusually candid articulation of terms that were always implicit.
What has changed is the candour with which those terms are now stated. The current administration has moved from implicit leverage to explicit invoicing. Reports emerged in late March that the White House had floated the idea of billing Gulf Arab states directly for the costs of American military operations against Iran — figures in the trillions, depending on whether the goal was to prolong or conclude the conflict. Whether or not those specific numbers are accurate, the underlying logic is no longer deniable: American security guarantees are being reframed as a commercial service, with the bill presented accordingly. This is not an aberration of the alliance system. It is, arguably, its logical endpoint.
The rhetoric from Washington has grown to match. Trump’s public comments about Saudi Crown Prince Mohammed bin Salman — boasting that the Crown Prince, who has committed over a trillion dollars in investment pledges and hosts American forces on Saudi soil, was now obliged to court his favour — would have been remarkable from any other head of state. From the leader of the country that has underwritten the post-war international order, they represent a significant shift in register. Allies across Asia and Europe are drawing their own conclusions. Japan dispatched a special envoy to Washington almost immediately after the tariff announcements; others are recalibrating more quietly. The message received in capitals from Seoul to Warsaw is that the American umbrella remains available — but it now comes with a visible price tag, negotiated publicly and revised without notice.
The more underappreciated dynamic, however, concerns Beijing’s incentives. China’s leadership has watched the past several years of cross-strait turbulence — the legal difficulties of Taiwan People’s Party leader Ko Wen-je, the political pressures on opposition figures, the steady outflow of military procurement commitments to Washington — with something closer to patience than alarm. The mainland’s economic gravitational pull on Taiwan grows quietly and continuously. Time, demography, and economic integration are doing work that no military operation could accomplish more cleanly or at lower cost.
This is why the Kuomintang visit to Beijing matters. It signals that some in Taiwan’s political class are calculating that engagement with the mainland is not merely ideologically preferable but practically necessary — particularly as Washington’s reliability as a guarantor becomes an open question. The trip is a hedge, just like these of Canada’s Carney, the UK’s Starmer, Germany’s Merz, and Spain’s Sánchez, not a surrender.
The broader picture that emerges — across Taipei, Berlin, and Riyadh — is of American strategic dominance entering a period of explicit repricing. Allies are being asked to pay more directly for arrangements they once received at a discount. Some will comply. Others will quietly diversify their options. Beijing, for its part, has little incentive to force a crisis when the existing trajectory is moving in its direction.
The most consequential question is not whether Taiwan will eventually move closer to the mainland. It is how long the current arrangement can hold, and what it will cost all parties in the meantime. On present evidence, Beijing sees no reason to hurry the answer.