Why Trump Blocked Taiwan Leader’s America Stopover — And What It Means For US–China Trade Talks

Taiwanese President Lai Ching-te has canceled a planned overseas trip after the Trump administration declined to approve stopovers in New York and Dallas, amid concerns it could derail trade negotiations with China and plans for a potential Trump–Xi summit.

Lai was set to visit Paraguay, Guatemala, and Belize in early August, with transit stops in New York on Aug. 4 and Dallas ten days later, Bloomberg reported.

The trip was quietly shelved after U.S. officials withheld approval, following objections from Beijing. Taiwan’s Presidential Office cited typhoon recovery efforts and ongoing tariff talks with the U.S. as additional reasons for the cancellation.

The move has sparked backlash in Taipei and Washington. Former House Speaker Nancy Pelosi called it “a victory for Xi” and warned it sends a signal that the U.S. can be “bullied by Beijing into silence” on Taiwan. 

The State Department said such transits remain consistent with long-standing U.S. policy, but no new plans were announced.

Lai’s trip would have marked his first stop in continental U.S. cities since taking office. A previous transit through Hawaii and Guam last December triggered China’s largest naval deployment near Taiwan in years. 

China, which has called Lai a “separatist,” has responded to past U.S. transits by Taiwanese leaders with military exercises near the island.

The timing is diplomatically sensitive. U.S. Treasury Secretary Scott Bessent met Chinese Vice Premier He Lifeng in Stockholm on Monday, with both sides working to extend a tariff truce that could pave the way for a Trump–Xi meeting. 

Trump’s team has also reportedly begun outreach to U.S. CEOs about a potential trip to Beijing.

Lai, who won the presidency with the lowest margin since 2000, faces rising pressure at home after a failed effort to unseat lawmakers. Meanwhile, Taiwanese officials are in Washington seeking to avoid a threatened 32% tariff. While Lai’s visit was never formally announced, officials in Paraguay and Guatemala had been preparing for his arrival.

The Trump administration’s decision mirrors past cases where U.S. leaders blocked Taiwan transits to avoid provoking Beijing. 

Linking Taiwan to trade with China sends “a dangerous message to Beijing,” said Laura Rosenberger, former U.S. diplomat and American Institute in Taiwan chair.

On Stocktwits, retail sentiment was ‘bullish’ for the SPDR S&P 500 ETF Trust (SPY) and ‘extremely bullish’ for the Invesco QQQ Trust (QQQ), both amid ‘normal’ message volume, while sentiment for the iShares MSCI Taiwan ETF (EWT) was ‘neutral’ despite ‘high’ message activity.

So far in 2025, EWT is up 15%, outperforming both SPY, which has gained 9%, and QQQ, up 11.4% year-to-date.

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