First Time In History: The USA Is Sending Money To A Country It Does Not Recognize

• Financial

The recent allocation of an $80 million grant from the United States to Taiwan for the acquisition of American military equipment marks a significant departure from historical norms. This financial support, unlike previous arrangements, is not a loan but a direct grant, signifying a pivotal shift in the bilateral relationship.

Notably, this is the first instance in over four decades that the United States has used taxpayer funds to supply weapons to a region it does not formally acknowledge as a sovereign state. President Joseph Biden's approval of the $80 million grant elicited a response from China, expressing its "regret and opposition" to the move, despite the relatively modest sum insufficient for procuring modern fighter planes, according to reports by the BBC.

Taiwan had already placed orders for US military equipment valued at more than $14 billion, raising questions about the significance of this additional $80 million infusion. This funding for Taiwan falls under the purview of a US program known as Foreign Military Financing (FMF).

Historically, the FMF has been employed to allocate substantial aid to countries like Afghanistan, Iraq, Israel, Egypt, and others. However, it is crucial to note that this aid has primarily been directed towards nations or entities officially recognized by the United Nations.

Taiwan, in contrast, lacks such recognition.

The USA is the main sponsor of Taiwan's military, which is strongly opposed by China

The United States transferred diplomatic recognition from Taiwan to China in 1979 but continued to supply arms to the island nation under the guidelines of the Taiwan Relations Act.

The primary objective was to equip Taiwan adequately for self-defense without overly straining relations between Washington and Beijing—a policy often referred to as "strategic ambiguity." In recent years, China has significantly bolstered its military capabilities, rendering the old strategic formula less effective.

The US State Department swiftly clarified that providing assistance to Taipei through the FMF did not imply recognition of Taiwan as an independent state. In a notable development, Taiwanese ruling party lawmaker Wang Tingju highlighted that the $80 million could be the tip of the iceberg.

President Biden had previously exercised discretionary powers to approve a $500 million sale of military equipment and services to Taiwan in July. Moreover, Taiwan is gearing up to dispatch two battalions of ground troops to the US for training, marking the first instance since the 1970s.

Wang emphasized that the key issue at stake is the potential for Taiwan to receive up to $10 billion in military aid from the US over the next five years, marking a substantial commitment to the island's defense.