Rising tensions in the Indo-Pacific have driven some of Australia’s allies, such as Japan and the Philippines, to start recalibrating their stance concerning Taiwan, leading to stronger ties.
While the relationship between Canberra and Taipei remains constant, notably thanks to strong economic bonds, Australia’s policy toward Taiwan has not adapted to this new and volatile strategic environment.
This is particularly striking as Australia has not hesitated to push back against China in other domains, despite Beijing being its first trading partner. Through the protection of critical minerals, freedom of navigation operations, and the ban of Huawei from Australia’s 5G network in 2018, Canberra has shown willingness to counter China’s influence.
However, when dealing with the Taiwan issue, caution has been the guiding principle.
While the Beijing-Canberra relationship has grown in the past months, Australia deeply values maintaining the status quo in the Taiwan Strait for its own security. Yet, this depends on ensuring that the power balance does not continue to lean against Taiwan. In such context, Canberra has a role to play, but this requires reevaluating its own Taiwan’ strategy.
Australia adheres to the One-China policy, but does not recognize Taiwan as part of the PRC. Drawing from this structure, Australia should pursue a more assertive Taiwan policy to better serve its national and regional interests.
Growth without strategy
Australia’s approach regarding Taiwan has been to cultivate the economic angle –– without entering into agreements that could hurt its ties with China –– while limiting political engagement.
In 2025, total trade between Taiwan and Australia reached NT$542.96 billion (US$17.3 billion). Australia ranked as Taiwan’s 13th largest trading partner, while Taiwan was Australia’s seventh largest trading partner.
Both economies are complementary: Australia possesses vast amounts of critical minerals, whereas Taiwan thrives in the semiconductor sector which is highly reliant on the former.
The New Southbound Policy is a vector of this strong economic relationship. Through economic cooperation, as well as academic and institutional exchange, the initiative supports Taiwan’s broader engagement in the Indo-Pacific, and has offered new channels through which to engage with Australia. The NSP notably supports people-to-people ties, with 11,486 Taiwanese studying in Australia in 2024.
Yet, despite strong economic bonds, Australia’s policy toward Taiwan remains limited in other areas, constrained by China’s successful pressure.
Diplomatic engagement remains scarce: no Australian ministers have visited Taiwan since Trade Minister Craig Emerson in September 2012. While political engagement has continued with Australian lawmakers, with a recent visit in late April to deepen bilateral ties, Australia has constantly tried to avoid getting politically engaged with Taiwan.
Even economically, discussions for a Free Trade Agreement between Taiwan and Australia were abandoned following Chinese pressures, while support for Taiwan's entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership was discarded by Prime Minister Albanese based on the fact that the CPTPP “was only for recognized states.”
The current level of political engagement between Taipei and Canberra goes against the stated goal to maintain the status quo in the Taiwan Strait that Prime Minister Anthony Albanese indicated in 2022 and reaffirmed in 2025.
Contributing to isolating Taiwan undermines such an objective. The current geopolitical environment requires Australia to stop treating Taiwan purely as a variable of its China relationship and to assess the bilateral relationship on its importance to Australia's interests.
Triggering Beijing
Canberra is in an uncomfortable position, divided between the need to protect its relationship with its largest trading partner and the pressure to align with its allies on regional security.
Yet, supporting Taiwan does not need to be tied to opposing China. Several steps are available within Australia's existing “one-China” policy framework.
A new Taiwan policy should therefore account for this strategic environment while allowing Canberra to be more realistic regarding Taipei and its added value for Australia.
Economically, while the bilateral relationship is already substantial, there is room to strengthen it further. Australia should support Taiwan's entry into the CPTPP, as this would contribute to Australia’s economic interests by increasing market access and reducing trade barriers, and solidify Taiwan’s regional inclusion, ultimately supporting the status quo in the Strait.
Reopening discussions around a bilateral FTA would similarly serve Australian interests, helping diversify its export markets and reinforcing its competitiveness in some sectors, such as agriculture, compared to other countries that have signed an FTA with Taiwan such as New Zealand.
Australia is also one of Taiwan’s largest energy suppliers, which creates incentives for energy security cooperation, potentially through green energy.
Such measures could reassure Taiwanese companies and investors regarding Canberra’s commitment to enhancing its ties with Taipei, and pave the way to enlarge the bilateral relationship beyond traditional sectors.
Symbolic engagement
Diplomatically, resuming regular ministerial visits would be the most visible signal of recalibration, but would face strong resistance from China. In the short term, publicizing political meetings and promoting symbolic engagement would already carry a strong message and help break Taiwan's isolation.
Moreover, trilateral engagement between Japan, Australia, and Taiwan could be an avenue to foster Canberra-Taipei ties while reducing the effectiveness of China’s repercussions. This would also support preserving the status quo and the regional power balance by building a bloc of like-minded countries.
Finally, Canberra should continuously restate its “one-China” policy publicly to avoid the false narrative that it is equivalent to Beijing's position.
These measures would align Canberra's approach with that of its regional partners and would fit within its existing policy architecture. They will draw pushback from Beijing, but this should not deter Australia from pursuing its own interests. Canberra has already faced Chinese pressure before, most notably when it joined AUKUS.
While China's considerations continue to take precedence over deeper engagement with Taiwan, a conflict in the strait would profoundly shake Australia's sea lines of communication, its semiconductor supply chains, and the broader power balance in the Indo-Pacific. Taiwan is not a peripheral issue for Australia.
A policy that reflects that reality, while continuing to reassure Beijing that Canberra adheres to its “one-China” policy and does not support Taiwanese independence, is both achievable and overdue.
