Why Do Political Adversaries Continue Trade?
Kocher, Brooke
Kocher, Brooke
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2025-05-19
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Abstract
This study examines the persistence of trade between political adversaries, focusing on the case of Taiwan and China. Despite ongoing political tensions and competing sovereignty claims, Taiwan and China have maintained substantial trade relations, particularly in the semiconductor sector. The research explores the key factors that sustain this trade, including cultural connection, geographic proximity, power imbalance, and third-party state influence, with a focus on the role of Taiwan's economic dependence on China and the influence of the United States. The study proposes a new theoretical framework integrating these four variables, examining their interactions and their impact on trade continuity. Utilizing a comparative case study approach, the thesis analyzes Taiwan-China relations alongside other examples of trade persistence between adversarial states. The findings reveal that while cultural ties and geographic proximity facilitate trade, political considerations and external influences, particularly the U.S. role in Taiwan's security, play a critical role in shaping trade decisions. This research contributes to the understanding of how economic interdependence can endure despite political and military conflict, offering insights into global supply chains and international relations.