The Penghu Islands sit at the strategic epicenter of the Taiwan Strait, serving as the unsinkable aircraft carrier that anchors the defense of Taiwan proper. 

While the physical presence of US military personnel on these islands, also known as the Pescadores, is sensitive, it is underpinned by a sophisticated legal architecture. This framework allows the US to project power and provide vital advisory support without the need for Taiwan’s formal diplomatic recognition. 

While the concept of a formal ceding of Penghu’s bases to the US could introduce the appearance of insurmountable legal hurdles, it could nevertheless occur given the right circumstances and preparation.

The primary international legal basis for US involvement in Penghu is the 1951 San Francisco Peace Treaty. Under Article 2, Japan formally renounced all claims to "Formosa and the Pescadores." 

Crucially, the treaty did not name a recipient state. This created the undetermined status of Formosa and Penghu in international law. Since sovereignty was never formally transferred to China, legal scholars argue the US, as the principal occupying power of Japan and its territories (including the Ryukyu and Daito Islands that includes Okinawa and the Senkaku Islands until 1971), maintains a residual legal interest in "Formosa and the Pescadores.”

Under Article II of the US constitution, the president holds broad authority to deploy forces to protect “vital national interests.” If the president determines that a presence in Penghu is essential to US national security — such as protecting global semiconductor supply chains or ensuring freedom of navigation — the president could order a deployment citing executive prerogative.

Sudden shifts

While this authority is typically used for temporary or rotational deployments to avoid the congressional funding triggers required for permanent bases, it provides a rapid legal mechanism for escalating US presence in response to a sudden shift in the regional threat environment, such as recent events in Venezuela and Iran.

While the US does not recognize Taiwan's de jure (legal) sovereignty, it recognizes its de facto (actual) authority over the territory. This distinction allows the US to enter into a memorandum of understanding, or an executive agreement with the Taiwan authorities.

These instruments bypass the need for a formal Status of Forces Agreement, which would imply sovereign recognition. Precedent for this already exists through unofficial security arrangements, via the National Defense Authorization Act, that allow US military members from all services and technical advisors to operate throughout Taiwan for training and maintenance without formal diplomatic ties.

Under Section 3(c) of the Taiwan Relations Act, the president and Congress are mandated to determine appropriate action in response to any threat to Taiwan's security or its social and economic systems. This provides a legal basis for an emergency presence.

If the US determines that a permanent or rotational deployment to Penghu is the only viable way to “maintain the capacity of the United States to resist any resort to force,” troops could be deployed under this specific mandate.

This concept is further supported by the Taiwan Relations Act requirement for the US to maintain the capacity of the US to resist coercion against Taiwan. Advocates of a deeper security partnership suggest that this capacity justifies the strategic pre-positioning of equipment or the establishment of rotational training centers on outlying islands like Penghu. 

Penghu the gatekeeper

Such a logistical interpretation ensures that the US can react instantaneously to a blockade or invasion, fulfilling its statutory obligations through forward-deployed readiness.

Furthermore, the Taiwan Relations Act’s requirement to provide defense articles and defense services can be broadly interpreted to include the establishment of training centers or logistics hubs. By framing the US presence as a “service” rather than a “base,” the US achieves the strategic benefits of persistent presence and interoperability while avoiding the potentially provocative legal label of a permanent foreign military installation.

For military planners, Penghu is the gatekeeper of Taiwan proper. Its loss would provide an adversary with a forward staging ground for full-spectrum assaults, effectively collapsing the defensive depth of the strait.

In October, Defense Minister Wellington Koo (顧立雄) confirmed the permanent relocation of the 101st Battalion's main headquarters from Kinmen to Penghu to meet combat needs. Under the authority of recent National Defense Authorization Acts, US military personnel are assisting the 101st Amphibious Reconnaissance Battalion.

If Taiwan were to move beyond unofficial cooperation and formally cede its military bases in Penghu to the US, the legal architecture could be more challenging but not impossible.

A formal ceding would dissolve the policy of strategic ambiguity. Accepting a transfer of land would require the US to recognize Taiwan as a sovereign state capable of transferring title, an act that would fundamentally break the “one China” policy. 

‘Existing natural boundaries’

Some would argue that under international law, such a move would be challenged. If Taiwan is held in trust by the Taiwan authorities under the San Francisco Treaty, a trustee cannot legally transfer title to a third party without a final political settlement. 

However, others argue that since the US entrusted Taiwan to the Republic of China (Taiwan), it would not be far-fetched for the US to rescind the trusteeship of the Penghu islands. Another way would be through the country’s Constitution, which defines its territory as “existing national boundaries." Ceding bases would likely require a constitutional amendment.

This is a high-threshold process involving a three-fourths majority in the Legislative Yuan and a national referendum. However, given a clear threat from the CCP, the Legislative Yuan might be more eager to pass such a law.

From Beijing’s perspective, Taiwan’s cession of territory to a foreign power would be interpreted as an act of secession, legally triggering China’s Anti-Secession Law, which mandates non-peaceful means to protect sovereignty. However, since Taiwan is already ruled by “successionists” according to the CCP, the status does not change — the CCP cannot lose control of something it does not have.

Accepting a permanent base through cession would exceed Article II authority for rotational deployments, requiring explicit Congressional authorization and funding. Given a Congressional pro-Taiwan stance, Congress could determine that US national security is more important than following the “one China” policy.

Montevideo Convention

Ceding territory to another country for a military base is the lawful act of any state, such as Cyprus ceding two sovereign bases (Akrotiri and Dhekelia) to the UK. Although Taiwan is not a member of the UN, it is still a state based on the Montevideo Convention.

This defines statehood by a permanent population, a defined territory, a government, and the capacity to enter into relations with other states — all of which Taiwan possesses. Under this legal theory, Taiwan has the sovereign prerogative to enter into treaties or land transfers, much like any other recognized power.

The US presence in Penghu is optimized through a web of domestic laws and international treaty ambiguities that allow for deep cooperation without formal cession. Through the combination of Article II authority, de facto agreements, and the expansive interpretation of Taiwan Relations Act defense services, the US has secured a resilient legal path to protect the most critical terrain in the First Island Chain, Taiwan and Penghu. 

Furthermore, the US has the legal flexibility to enhance its military presence based on the San Francisco Treaty, the US constitution, the Taiwan Relations Act, and the UN Charter. Taiwan ceding territory to the US for its national survival might not be a bridge too far either.