President Trump’s visit to Beijing to meet with President Xi Jinping and the implications therein with regards to Taiwan

Welcome back to TAXING TARIFFS! In this post we’ll get a quick update on the military conflicts in the Middle East before focusing on President Trump’s visit to Beijing to meet with President Xi Jinping and the implications therein with regards to Taiwan.

Much of the world is focused on the Strait of Hormuz, as is appropriate, and yet a wider conflict has shaped up around that region. According to the Wall Street Journal, more than 2,800 drone and missile attacks have been launched by Iran at the United Arab Emirates (U.A.E.) since the beginning of hostilities: more than Iran has launched against Israel. In April the U.A.E. responded by attacking Iran’s Lavan Island which is one of four major terminals for their export of crude oil. This casts that Gulf monarchy as an active combatant in the war between Iran and the United States. In addition, French Mirage fighters and Chinese Wing Long drones have been tracked in public photos over Iran. Both of those are used by the United Arab Emirates. According to U.S. Air Force Lt. Gen. Dave Deptula U.A.E. possess unusually sophisticated air power capabilities for the region. They have a fleet of advanced F-16 jet fighters and precision strike, air defense, airborne surveillance, refueling, and logistics. Bottom line, Arab monarchies are scrambling to establish new relationships and arrangements.

On Wednesday May 13th, President and Commander in Chief Donald J. Trump and his government delegation along with several significant business leaders arrived in Beijing for negotiations with President and Chairman of the Central Military Commission Xi Jinping and his entourage. Most talks will likely have taken place on Thursday, the only full day of meetings and events. Geopolitical chess at its best taking place in real time right in front of us, though with a thick red curtain pulled across it. There are many issues that will be broached if not discussed encompassing trade items and controls, industrial and agricultural policies, drugs, and war. To be more particular, soybeans, Boeing airplanes, rare earths, fentanyl, export controls, and Iran.

This Blog has spoken much about trade by defining, describing, and detailing tariffs. Yet there are other trade controls that are available to individual countries like the U.S. and China. Since late 2025, China has halted all U.S. soybean purchases. I suppose one might call that an infinite tariff. In April of 2025, in retaliation for U.S. tariffs imposed earlier that same month, the Chinese government told the country’s domestic airlines to stop accepting deliveries of Boeing jets as a trade war between the world’s two largest economies escalated. And the list of trade items being restricted goes on.

Perhaps the most prominent and significant of the issues arising in the relationship between China and the U.S. is the status of Taiwan. Historical sources suggest Taiwan first came under the control of a Chinese empire in the 17th Century. It became a Japanese colony in 1895, after the Qing empire lost the first Sino-Japanese war. After Japan lost WWII, China took the island again with a nationalist government led by General Chiang Kai-shek holding power.

This lush island has had many names and occupiers. It was Shan Hai Jing (“Classic of Mountains and Seas”) around the 3rd century BCE. It was often called Dunghai (“Eastern Sea”) or Yueh emphasizing its southern location relative to China. In the 1590s, Portuguese explorer Fernão Mendes Pinto documented the island as Ilha Formosa (“Beautiful Island”); Formosa stuck as an international name. The Dutch called it Tayouan (from the indigenous Tainan area). The Spanish briefly occupied the northern coast and named it San Salvador. After defeating the Dutch and Spanish, the Qing Dynasty formally adopted Taiwan (臺灣) as the administrative name. Then at the end of WWII and in the aftermath of the Chinese Civil War, the ROC government under Chiang retreated to Taiwan in 1949. It took control and retained Taiwan as the official name. To this day what we call “Taiwan” is officially known as the Republic of China.

Why is Taiwan important? It is a microcosm of technological excellence that collectively holds a linchpin position in the world supply chain of the most advanced semiconductor chips. It is indispensable for the advancement of AI and irreplaceable to electronics manufacturers around the globe. Taiwan Semiconductor Manufacturing Co. (TSMC) tops the list of firms of importance within Taiwan. They fabricate 90+% of the world’s most advanced chips. That’s just the tip of the iceberg. Taiwan has foundries, packaging houses, substrate suppliers, material firms, equipment engineers, testing specialists, design-service providers and other process expertise. Taiwan is the Crown Jewels of electronics manufacturing and both China and the U.S. know it.

What do you think about other Gulf States engaging Iran? Do you have a sense of the importance of the negotiations that are taking place between the U.S. and China? Perhaps most importantly do you fully appreciate the importance of Taiwan? Let us know at taxingtariffs@microncorp.com and then we’ll see you next time on TAXING TARIFFS.