The Taiwan Relations Act (TRA) was enacted by the United States Congress in 1979 to govern unofficial but substantial relations between the U.S. and Taiwan, following the U.S.'s formal recognition of the People's Republic of China (PRC). The act came in the wake of the dissolution of the Sino-American Mutual Defense Treaty with the Republic of China (ROC), Taiwan's governing authority. Passed by both houses and signed by President Jimmy Carter, the TRA established the American Institute in Taiwan (AIT) as a nonprofit corporation to handle commercial, cultural, and other interactions without official diplomatic representation. The act retroactively took effect on January 1, 1979, and maintains that pre-1979 international agreements between the U.S. and ROC are still valid unless explicitly terminated.

The TRA provides a framework for military and defense-related cooperation. It doesn't guarantee U.S. military intervention if Taiwan is attacked by the PRC but mandates that the U.S. make available to Taiwan defense articles and services "in such quantity as may be necessary to enable Taiwan to maintain a sufficient self-defense capability." The Act emphasizes that any non-peaceful efforts to decide Taiwan's future would be of "grave concern" to the U.S., and requires the U.S. to have the capacity to resist any force jeopardizing Taiwan’s security, social, or economic system. 

Over the years, despite the demands from the PRC and the U.S.'s One-China policy, successive U.S. administrations have continued arms sales to Taiwan under the provisions of the TRA. The act serves as a foundational document outlining U.S. policy towards Taiwan, incorporating a stance of "strategic ambiguity" aimed at dissuading both Taiwan from declaring independence and the PRC from forcibly unifying Taiwan with mainland China.