As the dust begins to settle after the reelection of Donald Trump as U.S. president, questions remain about the implications of his second term for global climate action. While the outlook for U.S. climate policy seems bleak, the climate crisis is too urgent to let the inaction of one country slow global progress. The people of Taiwan know this only too well in the wake of typhoon Kong-rey, the largest storm to hit the island in decades.
Ahead of Trump’s inauguration in January 2025, it is pragmatic to assess what challenges – and opportunities – a new U.S. administration will bring for climate governance, the energy transition, and energy geopolitics.
Regional Cooperation Can Fill the Climate Leadership Gap
If Trump treads the same “America First” path as his first term, we can expect the United States to withdraw from international climate accords such as the Paris Agreement. Trump could even withdraw the U.S. from the United Nations Framework Convention on Climate Change (UNFCCC) itself. Such a development could weaken the credibility of U.N. climate institutions – already under scrutiny after an “underwhelming” COP29, which failed to produce the finance desperately needed by developing countries. The possibility of U.S. withdrawal from global climate politics offers a chance to reflect on the coming era of climate governance – and how to ensure it becomes more effective and inclusive.
Strengthened regional cooperation could fill the gap, but to be effective, collaboration must be built on shared principles of inclusion, democracy, and justice.
Taiwan, as only the third country in Asia to codify its net-zero targets into law and with ample experience in disaster resilience and rapid renewable energy development, already plays an important role in helping partners across Asia respond to climate change. For example, Taiwan has worked with the Philippines to advance weather monitoring technology. As countries across South and Southeast Asia further industrialize and emissions subsequently increase, industrialized economies like Taiwan will be important sources of mitigation and adaptation knowledge, technology, and finance. By deepening cooperation, Asian democracies can prevent China from becoming the sole climate leader in the region.
Taiwan, and the wider Asian region, could also benefit from deepening decarbonization collaboration with European countries, who are already signaling their climate leadership ambition in the wake of Trump’s election. The EU has already established cooperation initiatives with Asian partners who have high climate ambitions. For instance, the EU-Japan Green Alliance partnership aims to accelerate both parties’ transition to climate neutrality.
Transcending National Level Climate Politics
Beyond traditional national-level climate politics, the Trump 2.0 era will amplify the trend toward polycentric climate governance. Even if the U.S. federal government withdraws from the Paris Agreement, some U.S. states and cities will remain committed to climate action and “alternative energies,” as was the case during Trump’s first term. This offers an extensive opportunity to deepen the existing collaboration between Taiwan and U.S. states.
Taiwan is already working with several U.S. states on climate-related issues, including signing an economic and energy resilience cooperation agreement with Oklahoma and a memorandum of understanding (MOU) with South Carolina on machinery and renewable energy exchanges. Currently, 24 U.S. states maintain representative offices in Taiwan, 14 of which were established between 2022 and 2024. The increasing number of state offices signifies closer ties with Taiwan, and climate change will likely remain a key area of collaboration.
It is worth considering, however, that some states may prioritize climate collaboration with China. California, a state with strong climate credentials, has signed climate MOUs with China, and the California-China Climate Institute has been established to promote bilateral climate collaboration. While subnational climate action and cross-border cooperation will be vital under the Trump administration, such collaborations with China need deeper scrutiny to ensure potential risks are adequately understood. This is especially important given China’s propensity to weaponize climate collaboration, as seen when China canceled a climate change working group with the United States after then-House Speaker Nancy Pelosi’s visit to Taiwan.
Subnational cooperation also offers Taiwan an alternative means of participation in climate action, as city-to-city diplomacy allows foreign officials to engage with Taiwan without explicitly addressing its international status. Taiwanese cities have already joined several international initiatives, including the U.K.-led Powering Past Coal Alliance.
The emerging paradigm of polycentric climate governance will see companies, NGOs, and other non-state actors play an increasingly important role in shaping global climate norms and standards. Such shared understandings will be vital to developing robust environmental regulations for emerging industries such as AI, which holds both promise and potential risks for combating climate change. Taiwan’s high-tech sector could demonstrate leadership in these sectors, through participation in industry-led initiatives like RE100.
Climate commitments made by major semiconductor manufacturers have already increased Taiwan’s visibility on the international stage. Notably, Taiwan Semiconductor Manufacturing Company (TSMC) has committed to 100 percent renewable energy by 2040 while setting targets to reduce scope 1 and 3 emissions across the value chain, along with other leading electronic companies.
The Clean Tech Opportunity
Compared to Trump’s first election in 2016, the energy transition is now well underway, with renewable energy now cheaper than fossil fuels in many cases. Renewable energy’s cost competitiveness means the United States’ clean-energy boom will continue, although progress may slow in the short term if Trump interrupts the implementation of the Inflation Reduction Act (IRA). However, as most IRA funding for clean energy is flowing to red states, Republican senators are expressing their support for some elements of the clean energy bill. As such, a total rollback is unlikely, but subsidies and tax credits could still be slashed to pay for tax cuts.
With the U.S. poised to reduce funding for clean energy manufacturing, China could extend its dominance in solar panels and electric vehicles in the field of next-gen clean technologies – such as third-generation solar cells and electrolyzers for hydrogen – without challenge.
However, Chinese technology imports are unlikely to receive a warm welcome under Trump. The nomination of several Cabinet members hawkish on China has deepened expectations that the Trump administration will significantly increase restrictions on Chinese imports, with economists suggesting tariffs could reach 40 percent by early 2025. Tariffs on Chinese solar wafers and polysilicon are already set to increase to 50 percent on January 1, a parting shot from President Joe Biden in an attempt to protect the U.S. solar industry.
While some Chinese solar manufacturers have managed to side-step tariffs by shifting production to Southeast Asian countries, the Trump administration intends to examine countries with substantial trade surpluses with the U.S. to identify potential mislabeling of Chinese products’ country of origin. Existing tariffs on solar panels from Southeast Asia may increase as a result.
The convergence of an accelerating energy transition, increased U.S. hawkishness toward China, and rising global concerns about overreliance on China for critical transition technologies present Taiwan with a strategic opportunity to leverage its advanced manufacturing capabilities to establish alternative clean tech supply chains. Given Trump’s focus on reshoring industry, Taiwanese clean tech manufacturers may need to follow TSMC’s lead by investing in U.S.-based manufacturing facilities.
“Drill, Baby, Drill.”
Trump’s pick for energy secretary is fracking magnate Chris Wright, whom the National Resources Defense Council describes as “a champion of dirty fossil fuels.” If his selection is approved by Congress, Wright, alongside the head of the new National Energy Council, Doug Burgum, could take steps to significantly expand U.S. fossil fuel production. Trump has pledged his support for fossil fuels and aims to achieve U.S. “energy dominance” through opening up new areas of public land for oil and gas extraction. Critics also anticipate his administration could restart natural gas export approvals.
While the potential of increased U.S. production of fossil fuels has caused significant concern among climate experts, increased natural gas imports from the United States could benefit Taiwan in the short term. The U.S. currently accounts for around 10 percent of Taiwan’s liquefied natural gas (LNG) imports, and Taiwan’s energy transition strategy positions natural gas as a key bridging fuel away from coal, with a target for LNG to reach 50 percent of the energy mix by 2025. Increasing imports of U.S. LNG would have positive implications for Taiwan’s national security, deepening the strategic relationship between Taiwan and the U.S. and potentially deterring a Chinese energy blockade, as suggested by Alaskan Senator Dan Sullivan.
Trump’s plan to “drill, baby, drill” could have wider-ranging consequences for Taiwan’s climate policy. If the United States puts a renewed focus on fossil fuel development, this will lead to a significant amount of stranded assets. As such, carbon capture and storage (CCS) and blue hydrogen, technologies that work with LNG, will likely play an even greater role in future U.S. decarbonization efforts. Taiwan could act now to pre-empt this trend and establish itself as a player in these emerging supply chains through regional hydrogen development initiatives with key players such as Australia and Japan.
Alongside LNG, Wright supports nuclear and geothermal energy. While nuclear energy remains controversial in Taiwan, drilling began at Taiwan’s first deep geothermal well in October. With the Lai administration positioning geothermal energy as a key pillar in Taiwan’s “second energy transition,” there could be significant synergies with future U.S. energy interests.
Energy Security Spending Should Be Considered Part of the Defense Budget
Trump and his aides have emphasized the need for Taiwan to pay for its own protection, including the suggestion that 5 percent or even 10 percent of its GDP should be spent on defense – up from around 2.5 percent at present. The Taiwanese government is already demonstrating its determination to invest in defense by ramping up its requests for major arms deals from the United States and committing to continuing to increase its defense budget.
Settling on a feasible approach to increase Taiwan’s defense budget will be a challenging focal point for both Taiwan and the Trump administration in the coming years. A defense budget set at 5 percent of GDP would account for nearly half of Taiwan’s annual budget, potentially crippling the country’s other societal functions.
The Trump administration and the Taiwanese government must recognize that energy security should be integrated into overall defense planning, and energy security expenditures should therefore count toward this target. Delaying Taiwan’s energy transition would hinder efforts to reduce reliance on imported energy, making Taiwan even more vulnerable in the event of a Chinese blockade or invasion.
In efforts to integrate energy resilience into defense preparations, the Lai administration established the Whole-of-Society Defense Resilience Committee this year, which includes “energy and critical infrastructure operations and maintenance” as a key mission. The United States’ de facto ambassador, American Institute in Taiwan (AIT) Director Raymond Greene, also expressed support for this approach, emphasizing that the AIT is focused on strengthening Taiwan’s energy resilience.
As the Trump administration enters office, further negotiations on the defense budget between the U.S. and Taiwanese governments should continue along current lines, with the guiding principle that Taiwan’s defense spending encompasses not only arms sales but also energy security. By working together to accelerate the energy transition, Taiwan and the U.S. can show the global community that decarbonization is not only beneficial for climate goals, but can also bolster national security.