The Stakes: Three Parties in a Delicate Balance
The year 2026 will be pivotal for Taiwan. With new leaders elected in Washington and Taipei in 2024, prospects for peace in the Taiwan Strait will likely hinge on the ever-changing political considerations of how to maintain the precarious “status quo” between China, Taiwan, and the United States. In 2026, U.S. President Donald Trump and Taiwanese President Lai Ching-te will each have to confront the challenge of maintaining the peace while balancing domestic considerations that may distract from this central goal. Meanwhile, as China’s President Xi Jinping continues to pursue “peaceful reunification” between mainland China and Taiwan, there are indications that China’s population may be losing patience with nonmilitary approaches to achieving Xi’s goal.
In short, all three parties are locked in a delicate balance of deterrence, dissuasion, and inducements to achieve peace across the Strait — factors that may increase or decrease the likelihood of armed conflict depending on how they evolve in the year ahead.
Core Dilemma: What Are the Implications of a Shifting Status Quo?
In 2025, key differences remained in understandings of the notion that there is only “one China” and what it means to maintain the “status quo” across the Taiwan Strait. Acute U.S.-China competition, Taiwan’s democratization and thirst for greater autonomy, and a stronger, more assertive China are laying bare the delicate balance that has existed since 1979. In particular, all three sides appear to view their respective commitments to refrain from crossing the other’s “red line” as weakening.
In other words, the status quo, and how to define it, has changed. The expanding military exercises of the People’s Liberation Army (PLA) around Taiwan since August 2022 have been shifting toward more coercive and multidomain operations to assert peacetime control over Taiwan. These systematic and incremental military and civilian-military measures provide China with the tools it needs to change the very nature of the status quo across the Strait. The line between peacetime military coercion and a forceful reunification with Taiwan is increasingly becoming blurred.
Thus, a strategic tension remains: how China can achieve its stated goal of “peaceful reunification” without resorting to force, despite trends in Taiwan that are increasingly pointing toward a separate, independent state, undermining Xi’s narrative that Taiwan will “inevitably reunify” with mainland China. This question is the starting point for assessing what to expect in 2026 given current trends.
Plausible Pathways
There are four plausible scenarios for how cross-Strait relations could unfold in 2026 that merit attention.
Status quo, with caveats. Scenario 1 sees the current state of relations remaining stable, with several important caveats. In this scenario, Taiwan retains its quasi-independent status and marginal participation in international organizations but does not undertake any major policy shifts toward formal independence; Beijing maintains its current approach to “peaceful reunification” and refrains from any forceful military measures to annex Taiwan; and Washington maintains its “One China” policy of unofficial relations with Taiwan, with continued visits by scholars, businesspeople, and members of the U.S. Congress, and continued support for Taiwan’s defense needs with U.S. arms sales.
However, two caveats to the definition of the status quo are necessary: First, Beijing continues its peacetime military exercises and gray-zone activities near Taiwan, which both Washington and Taipei view as incrementally eroding the tenuous balance of peace; and second, Lai Ching-te continues his increasingly overt public rhetoric on Taiwan’s independent sovereign status, which Beijing views as provocative and challenging China’s narrative of the “inevitability” of Taiwan’s return to mainland China.
Forceful unification. Scenario 2 sees Beijing take the risky and provocative move of attempting to invade Taiwan militarily and “reunify” Taiwan with mainland China. This would likely be precipitated by either an external stimulus forcing Xi to launch an invasion, such as a formal declaration of independence by Taiwan, or an assessment by Xi that all possibilities of “peaceful reunification” have been exhausted completely.
Formal declaration of Taiwanese independence. Scenario 3 sees Taiwan formally declare independence, through either a referendum vote or a public statement from President Lai. This would entail Lai taking the extraordinarily risky gamble of legally enshrining Taiwan as a independent sovereign state in the international community. Lai would only undertake such a move if he believed doing so would serve Taiwan’s interests, or if he felt compelled to do so for domestic political reasons.
Fundamental change in Taiwan policy from Washington. Scenario 4 sees Washington change its One China policy to include formally recognizing Taiwan as an independent state and undertaking official exchanges with Taiwan. While formal diplomatic recognition by Washington would be an extreme scenario, there are other, less extreme measures that President Trump could take that would still signify a major change to U.S. policy that would be considered destabilizing from Beijing’s perspective. This could include an official visit by Trump to Taiwan or by Lai to the United States, for example, or something more tactical, such as the formal deployment of U.S. troops in Taiwan or new security guarantees for Taiwan in the event of an invasion by China.
Outlook for 2026
Based on the current state of affairs, the four scenarios, and the possible early indicators of change outlined here, the following predictions can be made for 2026.
Most Likely Scenario: Continuation of Status Quo, with Caveats
The most likely scenario in 2026 sees all three sides continue their current policies on maintaining the status quo across the Taiwan Strait. “Maintenance” here is defined as not undertaking any fundamental policy change, including the People’s Republic of China (PRC) not launching a military campaign to invade Taiwan, Lai not formally declaring independence, and Trump not changing course on the One China policy. The logic underlying this prediction is that any change in the status quo would have significant implications for regional stability, inviting potentially catastrophic risks to leaders in all three countries. Xi understands that a military campaign by China to “reunify” Taiwan would completely change the geostrategic landscape in East Asia and beyond. If unsuccessful, it would have profound negative consequences for the region, U.S.-China relations, and Xi’s own survival as leader of the Chinese Communist Party (CCP). Similarly, Lai and Trump likely understand that any fundamental change to the status quo might imperil their own reputations and domestic political standings, especially if such change led to a military conflict.
Extreme Scenarios That Are Unlikely but Cannot Be Ruled Out
The other three scenarios — forceful unification by Beijing, formal declaration of independence by Taiwan, or a fundamental change in U.S. policy toward Taiwan — are all deemed unlikely in 2026 because of the significant risks associated with each scenario. Whether Xi has become “impatient” with Taiwan does not change the fundamental cost-benefit calculus that he and China face. It would be a major political gamble for Xi to launch an invasion, because of the chance that the United States, and possibly other regional actors like Japan or Australia, would intervene. Similarly, Lai likely sees little benefit or necessity in formally declaring independence, simply because Taiwan knows that such a move would almost certainly result in the PRC initiating military action against Taiwan. Finally, Trump is unlikely to see strategic benefit in formally recognizing Taiwan as a sovereign state or using Taiwan as a bargaining chip in negotiations with China, because of the destabilizing effects it would have on U.S.-China relations.
What to Watch
There are several watchpoints or early indicators we might observe in 2026 that would suggest change is on the horizon, or that might compel Beijing to take destabilizing actions across the Taiwan Strait.
Xi signals impatience with Taiwan. We may see signals in 2026 that would indicate Xi’s growing frustration or impatience with Lai. This would include rhetorical shifts in public speeches by Xi or senior CCP officials, such as the removal of the term “peaceful” from China’s “peaceful reunification” formula for Taiwan; a new white paper or policy document that emphasizes a closing window for peaceful resolution of the Taiwan question; or more pronounced destabilizing military exercises or maneuvers near Taiwan that would push Taiwan or the United States to respond. These factors will take on added significance as Xi approaches the 21st National Congress in 2027, a symbolic date corresponding with the 100th anniversary of the founding of the PLA. Chinese scholars are already debating whether Lai has crossed Beijing’s red line, such as by passing certain thresholds of China’s Anti-Secession Law.
Trump’s Taiwan wildcard. A second early warning is the possibility that Trump will change U.S. policy on Taiwan, shifting Xi’s calculus of the risks and rewards of taking military action against Taiwan. Trump’s mercurial negotiating style and apparent fondness for authoritarian leaders has led to speculation that he may treat Taiwan as a bargaining chip on the international stage. In particular, observers worry about Trump using Taiwan as a political pawn in ongoing U.S.-China trade negotiations, possibly even “giving away” Taiwan in order to strike some sort of grand bargain with Xi.
While there is little concrete evidence to suggest that Trump is poised to fundamentally change U.S. policy on Taiwan, the following developments would indicate a possible shift on the horizon in 2026:
Continued cancellation of high-level visits by Taiwanese leaders.
Decrease or cancellation of U.S. arms sales to Taiwan.
A rhetorical opening to Xi from Trump. For example, were Trump to publicly signal that Taiwan was a potential bargaining chip during high-level meetings with Xi, this could open the door for Xi to surmise that Trump would not come to Taiwan’s aid were China to invade Taipei. This scenario sees Trump alluding to Taiwan as “being a part of China’s territory,” or comparing Xi’s designs over Taiwan to Russian President Vladimir Putin’s designs over Ukraine.
Strategic Implications
Several strategic implications flow from the forecast of a continuing status quo, with caveats. First, under Xi’s leadership, the PLA can execute a range of missions against Taiwan, including a full air and naval blockade, with increasing confidence of success. Thus, even if our central prediction holds — no change to the current, ever-evolving status quo — China is now capable of exerting PRC control and influence over Taiwan without “firing a shot” through political subversion, threats of a military “ultimatum,” or an economic blockade of Taiwan short of military invasion. As the means of PRC political manipulation of Taiwanese domestic politics continue to grow, along with the instruments of military power to impose an economic blockade, Washington and Taipei will have to contend with these new peacetime coercive tools.
Additionally, Trump’s second term in office has injected a new variable into the equation of cross-Strait peace. His propensity for transactional, personality-driven approaches to foreign policy introduces a degree of unpredictability into U.S. relations with Taiwan. While most observers believe he will maintain continuity in the United States’ One China policy over Taiwan, others have raised doubts about his willingness to come to the aid of Taiwan in the event of an armed conflict initiated by Beijing in the Taiwan Strait. Although it is unlikely that Trump will fundamentally change U.S. policy on Taiwan, Xi will be watching closely for signs that the American president is willing to sacrifice Taiwan in the service of broader U.S.-China stabilization.
Policy Shaping and Conclusion
2026 will be a pivotal year in determining whether deterrence holds across the Taiwan Strait. The primary actors with the power to influence the trajectory of peace and stability in the Strait reside in the governments of all three capitals, but there are several actions that governments, institutions, and companies can take to positively reinforce the current status quo. First, governments on all three sides can signal the importance of maintaining the status quo, including highlighting the acute risks for regional peace and stability that would come with upsetting it. Second, institutions and think tanks can pursue people-to-people exchanges between the three countries to support bonds among the populations and societies, and they can highlight academic and public-policy research on the history of cross-Strait relations and the benefit of maintaining the present trajectory of the status quo. Finally, private businesses can promote the benefits of trade and investment among the three sides and highlight the business and supply-chain risks of conflict across the Strait.