The Mouse that Roared

This analysis seeks to contribute to the growing literature on the subject of “the weak in the world of the strong.” It examines Taiwan's attempts to cope with U.S. commerical pressure in view of its mounting bilateral trade surplus in the recent years ($10.6 billion in 1985, and $6.2 billion in the first half of 1986). Taiwan's past ability to achieve relatively favorable outcomes in its commerical dealings with the United States is explained at two levels. At the more micro level of bargaining tactics used by the weak in managing the strong, attention is directed to Taiwan's resort to: (1) problem redefinition, (2) damage limitation, (3) exploring loopholes, (4) linkage politics, and (5) transnational coalitions. These measures are complemented by more long-term and basic economic adaptation termed positive adjustment. At the more macro level, two prerequisites suggested by Yoffie (1983) for successful adaptation in a protectionist and competitive economic environment are discussed: (1) Taiwan's policy capacity, and (2) U.S. accommodative behavior. Taiwan's institutional capabilities (especially in terms of the autonomy and strength of the state), and its historical niche in U.S. domestic politics and Washington's Cold War containment policy are examined. The discussion argues that Taiwan's coping behavior in the trade area must be understood in the broader context of a metagame that seeks to preserve vital political and security contributions from the United States as well.