Xi Jinping’s rise to power has heralded a new foreign policy that is more assertive and uncompromising toward China’s neighbors, the United States, and the rest of the world. This change presents challenges for the United States and Taiwan in particular which must be addressed with a sense of urgency due to Xi Jinping’s ambitious objectives and his firm grip on the levers of power which increase the likelihood that the Communist Party and government of China will seek to achieve them without delay. This paper reviews changes to Chinese foreign policy in the Xi Jinping era and argues how the modernization of the People’s Liberation Army (PLA) over time has increased the threat to Taiwan, with concurrent risks for the United States. Taiwan and the US can address the challenge presented by China by strengthening their relationship to adapt to the new era under Xi Jinping’s leadership. According to CIA (2018), China’s economy now stands at approximately US$12 trillion, second only to the United States (CIA [2018]. World fact book). Unlike in 1978, China’s economy today is dependent on access to globally sourced raw materials, and access to overseas consumer markets for its industrial and consumer goods. This dependency on overseas markets has increased China’s global presence and interests, driving the need to protect them. The Chinese Government’s now ample resources have been allocated to both hard and soft power means toward this purpose. The PLA has greatly benefitted from economic development and the expansion of the Chinese economy, transforming from a backward institution focused on private-sector moneymaking into the sharpest tool of China’s power and influence. Since Xi Jinping came to power in 2012, China’s foreign policy and strategy have undergone a dramatic shift away from Deng Xiaoping’s focus on increasing domestic productivity and avoiding potentially costly overseas entanglements. The confluence of accumulated national wealth, diplomatic, economic, and military power, and the will to use those levers of power, has dramatic implications for the United States and China’s neighbors. A more assertive China, confident in its wealth, power, and international status, is increasingly unafraid of overt competition with its neighbors and the United States, unwilling to back down or compromise in the face of disputes. This dynamic has resulted in a new paradigm in the Indo-Pacific region that is unlike previous challenges of the past 40 years. The shift in China’s foreign policy and the PLA’s modernization threaten to challenge the credibility of US security assurances and alliances in the region, making the cultivation and strengthening of the US–Taiwan relationship, and the network of US bilateral alliances in the region an urgent imperative.