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March 6, 2026

Risk Decision Making and Intertemporal Choice: Lessons from the Taiwan Strait

Rachel Downing
©2026 Rachel Downing

ABSTRACT: This article argues that domestic and political factors may incentivize US presidents to use risky military options to resolve crises quickly, though high costs or threats to long-term vital interests can overcome leaders’ natural tendencies to focus on the present. Recently declassified documents from President Dwight D. Eisenhower’s administration allow a detailed examination of how US leaders balanced risks over time during the First and Second Taiwan Strait Crises. The findings inform policy recommendations to enhance military planning and enable military advisers to communicate long-term risks more effectively to political leaders.

Keywords: presidential decision making, risk analysis, China, Taiwan, crisis

 

During the Cold War, Taiwan emerged as a bulwark against communism, leading to multiple US military responses to crises in the Taiwan Strait, even as the United States prioritized its long-term strategic rivalry with the Soviet Union. Today, US leaders face similar challenges balancing the near-term risks of conflict expanding in Europe and the Middle East with its long-term priority of defending against China. Despite consensus amongst US leaders on China’s status as America’s long-term priority, a propensity exists to employ military forces in response to lower-priority regional crises, even when they are needed to address strategic goals regarding China. This article draws on the concept of intertemporal risk balancing from behavioral economics to help understand which individual, political, and institutional factors contribute to presidential risk preferences and time horizons when making decisions during crises. Given the urgent nature of national security decision making in crisis situations, presidents may be risk acceptant due to politically driven, short time horizons, while military advisers may be more risk averse because they understand the long-term risks of military intervention.

As a global power, the United States must continue to manage risks from near-term global crises that could affect its long-term priorities in the era of great-power competition.1 This article uses recently declassified archival material from National Security Council (NSC) policy debates surrounding the 1955 and 1958 Taiwan crises to examine the individual, political, and institutional factors that impacted the risk preferences and time horizons of President Dwight D. Eisenhower. The case studies have implications for current joint planning and risk assessment methods and could improve military advisers’ abilities to communicate risks over time to inform presidential decision making during crises.

Risk Preferences and Intertemporal Choices in Decision Making

Behavioral economics, psychology, and political science research explain how individuals manage the intertemporal dimensions of risk-based decision making. Risk acceptance describes the willingness of leaders to tolerate risks resulting from their decisions and is a highly personal decision based on the specific situation. Similarly, the concept of time horizons varies by individual based on how much one values future outcomes and is willing to sacrifice in the near term to achieve future gains. Intertemporal choices, therefore, involve trade-offs between costs and benefits at different points in time, adding complexities to the risk calculus. This section explores how cognitive bias and heuristics impact decision making and perceptions of costs and benefits over time and considers how external structural factors, such as political cycles and organizational processes, shape individual decision making. 2

The strategic guidance to accept near-term risk and reduce future risk given in the 2022 National Military Strategy runs contrary to research on individual biases in behavioral economics. Prospect theory suggests that people assess options compared to a reference point, typically the status quo, and assign risk levels based on whether choices are seen as gains or losses. The concept of loss aversion indicates that potential losses impact decisions more than potential gains, and people tend to take more risks when confronting potential losses. Furthermore, research on intertemporal choice shows that individuals discount future rewards more than expected costs, though these rates vary based on different psychological factors. For example, a higher value gain or loss in the future will have greater weight on near-term decision making and could overcome the tendency toward present bias. Overall, these cognitive biases distort risk-based decisions, causing people to overemphasize costs and undervalue benefits, especially for future projections. 3

In addition to common biases previously discussed, leaders rely on personal experience and heuristics during crisis situations when evaluating risks with limited information. Research shows older leaders tend to be more risk acceptant because they have less time to secure their legacy and have more experience, which increases their confidence in estimates about potential outcomes. Nonetheless, certain experiences can moderate risky behavior. For example, leaders with prior military experiences in combat tend to be more risk averse due to their direct experiences with wartime costs (such as casualties, death, and destruction) and their understandings of military capabilities, which improves their abilities to evaluate potential outcomes. 4

Another powerful heuristic that shapes leaders’ risk calculations is threat perception, which drives leaders to align their foreign policies and budget allocations to preferred intervention strategies. Internally focused leaders believe the internal economic, social, and political structures of states (such as a communist society compared to a democratic republic) threaten national security, which makes these types of leaders more likely to pursue transformative strategies to change domestic institutions of adversary states. Alternatively, externally focused leaders believe threats emerge from states’ policies or external actions, so these types of leaders may pursue more limited, non-transformative strategies, or limited interventions, which do not aim to change states’ forms of governance. American presidents set foreign policy agendas early in their tenures and align military resources toward preferred intervention strategies. Thus, when a crisis emerges, presidents’ threat perceptions shape their assessments of the potential benefits and costs of various interventions based on US preparedness for that specific type of intervention. 5

Beyond decisionmakers’ personal experiences and heuristics, advisers’ experiences are key factors in which approaches to take. Foreign policy advisers provide information, conduct problem framing, and develop policy recommendations. Advisers, therefore, play significant roles in leaders’ decision making. Research shows that advisers can influence leaders’ decisions even when their dispositions differ, and hawkish adviser groups are more likely to lead states to engage in conflicts. Leaders are also more likely to intervene when they have support from their military advisers, but when military advisers are divided, they have less influence on presidential decision making. This tendency could be because the American public values military experience more than other foreign policy credentials, so US political leaders may use military support to gain public support for foreign military interventions.6

In addition to experience, political factors also contribute to risk propensities as leaders balance threats to national interests against the impacts on national and personal reputations. Domestic audiences may view how leaders handle crises as tests of skills and competence. For international audiences, leaders’ responses are tests of national resolve. Research shows that US presidents are more likely to prioritize international crises in NSC meetings when their domestic approval ratings are low. This finding is consistent with diversionary war theory, which argues leaders use military intervention to distract from domestic issues. Moreover, US presidents are more likely to attend to crises when they have unified governments, which mitigates congressional limitations on presidential decision making through the War Powers Resolution. 7

Political factors also create different incentive structures for elected officials compared to military leaders, which can drive differences in how they evaluate risk or view time. Election cycles drive presidential decision making, creating incentives to achieve results quickly to shape midterm elections and win a second term. Further, presidents have a limited time to achieve policy goals and secure their legacies, given US term limits and institutional resistance to change. Alternatively, the Joint Chiefs of Staff ( JCS) must consider current and future operational requirements as part of their responsibilities. Thus, US presidents may be more likely to take risks and focus on near-term goals than their nonelected military advisers. 8

The time horizons can also impact how leaders evaluate courses of action. Time horizons may become screening mechanisms for viable options, and leaders with short time horizons may constrain options to those that will achieve near-term results. This screening method may be especially likely during crises, high-stakes situations that drive a sense of urgency. Risk acceptant decisionmakers tend to be more comfortable with uncertainty and willing to consider more diverse sets of options before deciding, whereas individuals with short time horizons may only consider future options when facing high near-term costs. 9

In addition to individual and political factors, governmental politics and organizational processes play important roles during problem framing, which shapes leaders’ reference points and risk propensities for specific situations. National security decision making results from political bargaining and organizational processes, such as the NSC policy development or Department of War planning processes, which help leaders frame problems and can introduce biases when organizations define risks or present options. For example, dilution bias occurs from synthesizing risk assessments across multiple echelons, which can obscure dissenting opinions and filter information about specific risk drivers. On the other hand, highly detailed military planning can lead to exaggerated estimates of consequences and probability compared to less detailed options, skewing cost-benefit analyses during risk assessments. 10

The existing literature provides several key ideas about how leaders make decisions under conditions of uncertainty. First, leaders are likely to have strong incentives to focus on short-term risks at the expense of achieving long-term goals. Second, leaders may only consider options with tangible near-term results. Third, there are likely differences between how civilian policymakers and military advisers conceptualize risks because of different incentives over time. The most prevalent factors that may cause leaders to deviate from these natural tendencies include leaders’ experiences, adviser group dynamics, domestic political considerations, the prospects of high costs, and the importance of interests at stake.

Case Studies

The next section examines behavioral economics and political science theories through two case studies to test how crisis conditions affected a president’s risk tolerance in decision making. These cases, which are now fully explorable with declassified materials, involve Taiwan during the Cold War under the Eisenhower administration, which controls for common regional and geostrategic conditions. The analysis explores the individual, political, and institutional factors discussed above. It examines the urgency of each crisis, whether the president considered long-term options, and whether he considered the risk to long-term strategic priorities. Finally, comparison of the two case studies shows how different contexts can lead to variations in risk tolerance.

First Taiwan Strait Crisis: August 1954 to May 1955

In 1954, during Eisenhower’s first term and early in the Cold War, the United States faced a tense standoff with the People’s Republic of China (PRC) over control of the offshore islands in the Taiwan Strait. When Chiang Kai-shek and his Nationalist forces retreated to Taiwan in 1949, they kept troops on the small offshore islands only a few miles from mainland China, from which they harassed the PRC and threatened to launch an invasion. When Eisenhower took office, he removed the 7th Fleet’s order to prevent Nationalist attacks against the mainland to gain leverage during the Korean War armistice negotiations. This action spurred the PRC to announce its intent to invade Taiwan, and in August 1954, it began shelling the offshore islands. While the JCS argued for defending the islands, Eisenhower wanted to avoid escalating the crisis to war, so he used diplomatic measures and back-channel negotiations to gain PRC agreement to stop shelling the islands in exchange for Chiang’s agreement to remove forces from the furthest Tachen (Dachen) islands. 11

The First Taiwan Strait Crisis took place nearly two years into Eisenhower’s first presidential term, immediately before the midterm elections in which his Republican party lost control of both houses of Congress. It also came on the heels of the controversial Army-McCarthy Hearings, which drove Eisenhower to invoke executive privilege to deny Senator Joseph McCarthy’s ability to further subpoena administration officials. Additionally, Eisenhower’s public approval ratings dropped to the lowest point of his first term right after the crisis began. Therefore, he was sensitive to public opinion and no longer had reliable congressional support, so domestic considerations weighed on his foreign-policy decisions.12

Eisenhower’s New Look policy during the Cold War emphasized a strong domestic economy and relied on nuclear weapons, covert action, and strong international relationships to deter the Soviet Union. He feared large conventional forces would bankrupt the United States, so he focused on nuclear deterrence through massive retaliation, which caused divisions among the JCS, who publicly criticized Eisenhower’s defense budget. In response, Eisenhower replaced the entire JCS and appointed Admiral Arthur W. Radford, who supported the New Look policy and atomic weapons use, as chairman. Radford became close with then–Secretary of State John Foster Dulles, who was known for hawkish views and nuclear brinkmanship. 13

While Eisenhower focused on building US economic and military strength to prosecute the long-term Cold War against the Soviets, Asia emerged as a battleground between communism and the free world as spheres of influence solidified during the post-colonial period following World War II. By fall 1954, the United States had accepted a stalemate in Korea and could not build a coalition to support the French in Vietnam, which led to the French defeat at Dien Bien Phu and the division of Vietnam into North and South governments. After these perceived losses to communist advances in the Far East, Washington viewed Taiwan as an important bulwark against the spread of communism at a time when the Cold War was going poorly for the United States. 14

When the PRC publicly declared its intent to invade Taiwan in August 1954 and intensified the shelling of Jinmen, Matsu, and the Tachen islands, the importance of these offshore islands became a central point in the NSC debate about how to respond.15 The JCS assessed that the offshore islands were not defensible without substantial US support, nor were they important for the defense of Taiwan. If the United States did not defend the offshore islands, however, there was fear it would seriously damage Nationalist morale and potentially cause the Republic of China (ROC) government to collapse. Alternatively, if the United States committed to defending the offshore islands, the situation could escalate into a costly nuclear engagement with the PRC, which would threaten US international prestige and risk escalating to a broader nuclear war if the Soviet Union came to China’s aid. Eisenhower was also adamant that any use of military force required congressional approval after observing Truman’s adversarial relationship with Congress over the use of force during the Korean War. 16

While the JCS agreed the offshore islands were not essential to Taiwan’s defense, they recommended, in a split decision, to use US armed forces to prevent the seizure of the islands. The JCS believed they only needed air and naval forces, not ground forces, though the then–Army Chief of Staff General Matthew Bunker Ridgway disagreed. Radford also argued it would be necessary to strike air bases on mainland China and that any US commitment of forces should be made with no limitations because “we do not want to repeat the mistake of the Yalu River,” referring to his belief that political constraints on MacArthur prevented victory in the Korean War. Then–Secretary of Defense Charles Wilson opposed the JCS recommendations because he felt it would escalate into war and would be challenging to justify to the American public, especially given Washington’s reluctance to go to war with the PRC in Korea or Vietnam. 17

From a diplomatic perspective, Dulles assessed that general war with the PRC was inevitable if the United States committed to defending the offshore islands. He also agreed with Wilson that such a commitment would draw domestic public and congressional criticism. Furthermore, Dulles felt it would strain US alliances in Australia, Europe, and New Zealand because of the likelihood of nuclear escalation. Eisenhower believed the PRC was only testing US resolve, and as long as the US commitment to defend Taiwan remained credible, the PRC would not invade the main island of Formosa. Thus, Eisenhower decided to treat the offshore islands separately and publicly tried to frame them as unimportant, assuring that any loss of those islands would not undermine the US commitment to defend Taiwan. 18

Eisenhower chose not to use military force to defend the offshore islands and instead pursued diplomatic options, which took longer to implement. Dulles led the multipronged diplomatic approach, which included seeking congressional action to ratify the Mutual Defense Treaty with the ROC and approve the Formosa Resolution, giving Eisenhower more authority to employ military forces and signal US commitment to defend Taiwan. In exchange for these commitments, the United States convinced Chiang to evacuate the northernmost Tachen islands and withdraw his forces to more defensible positions on Jinmen. At the same time, the United States coordinated with Britain and New Zealand to propose a United Nations (UN) ceasefire resolution to stabilize the situation over the long term. Militarily, the United States continued naval patrols through the straits and surged military equipment, training, and logistics to the ROC to improve its capability to withstand a future PRC invasion. 19

In discussing its course of action, the NSC did consider long-term risks. A major risk in pursuing UN action was that it could lead to UN recognition of the PRC, which would undermine the US policy of nonrecognition and support of the ROC’s seat on the UN Security Council (UNSC). Additionally, when discussing possible use of atomic weapons, the NSC considered the immediate impact of fallout, international backlash, and how the Soviet Union could exploit that backlash in a wider anti-US propaganda campaign. These risks never materialized, however, and the US approach succeeded, pressuring the PRC to reduce tensions. Through back-channel diplomacy via third parties at the Bandung Conference in April 1955, the PRC indicated willingness to step down attacks and accept the status quo in the near term without negotiating a formal ceasefire. While the underlying problems remained unresolved, the United States maintained its commitment to the defense of Taiwan and avoided war with the PRC. 20

Eisenhower was facing a high-intensity crisis, framed as a potential loss of territory and prestige, and he had a hawkish adviser group that favored using military options, including nuclear weapons. In these conditions, one would expect Eisenhower to focus on short-term considerations and take risks by employing military forces to end the crisis rapidly. Instead, Eisenhower and his political leaders, Dulles and Wilson, kept a long-term perspective and used diplomatic options that took longer. This outcome shows that Eisenhower’s World War II combat experiences may have had a moderating effect, making him more risk averse. Furthermore, Eisenhower’s military advisers offered divided recommendations, which proved less influential on his decision making, a result consistent with previous theoretical findings on adviser group dynamics.

While one might expect the JCS to be more risk averse due to extensive military experiences, they had a more short-term perspective than Eisenhower and recommended a robust military response, despite the potentially high costs. The JCS might have focused on the crisis at hand because of the recent perceived losses and political constraints on the use of force in Korea and Vietnam, against their recommendations. Furthermore, amid internal disputes over roles, missions, and budgets with Eisenhower, the JCS may have also seen war with China as a way to justify maintaining a large military.

Second Taiwan Strait Crisis: August 1958 to October 1958

When the First Taiwan Strait Crisis ended through an informal agreement, the underlying question over control of the offshore islands remained unsettled, which led to a second crisis three years later. On August 23, 1958, the PRC launched an intensive shelling campaign on Jinmen to end the Nationalist blockade so China could diversify trade away from the Soviet Union. Chiang requested that the United States invoke the Formosa Resolution, provide naval convoy escorts for resupply vessels to the offshore islands, and delegate decision authority for military operations to the local commander under the auspices of the mutual defense treaty. Eisenhower’s priority, however, was preventing escalation to war and Soviet involvement. The United States, therefore, provided only indirect military support to deter the PRC from invading Taiwan, which included naval demonstrations and the provision of advanced military equipment, such as nuclear-capable artillery and the most modern fighter aircraft. After multiple attempts, Nationalist convoys with US Navy escorts successfully resupplied Jinmen. By the end of October, the PRC stopped shelling the islands on even-numbered days, allowing Nationalist resupply convoys to access the islands, an agreement that continued for 20 years until the United States and the PRC normalized relations. 21

When the Second Taiwan Strait Crisis began in the summer of 1958, Eisenhower was facing several domestic political challenges. He was a lame duck president coming out of an economic recession, and his approval rating was at one of the lowest points of his presidency. Additionally, in the middle of the crisis, his chief of staff resigned for an influence-peddling scandal before the midterm elections, in which Senate Democrats won the largest gain in history and nearly achieved a supermajority. When it came to public opinion about Taiwan, the US citizens felt the ROC government should handle the PRC threat on its own. 22

As in the First Taiwan Strait Crisis, Eisenhower and his advisers did not believe the offshore islands had military value for the defense of Taiwan, so the main US goal was to preserve Nationalist morale and show US resolve in defending its allies. Nevertheless, Eisenhower wanted to discourage Chiang from drawing the United States unnecessarily into war, as he was frustrated that Chiang had increased the number of forces on Jinmen against US advice, which elevated the importance of the offshore islands. Furthermore, internal State Department debates considered the risk that Chiang would start an all-out war with the PRC if the United States did not provide some support. Eisenhower, therefore, used ambiguous messaging to signal the US resolve to defend Taiwan without a formal public statement on the offshore islands that could commit the United States to a war he sought to avoid.23

In considering military response options, the JCS believed the United States would need to use nuclear weapons to defeat a PRC invasion of the offshore islands or to break a blockade. The State Department felt any use of nuclear weapons would escalate to major war, offend Japan and the Philippines, and risk drawing the Soviets into conflict. Furthermore, there was concern that the ROC was holding back its own effort to gain US commitment. Eisenhower, therefore, kept the decision authority for nuclear weapons use at his level and adopted a phased military response, focused on providing equipment and logistics to aid the Nationalists’ self-defense while limiting direct US military involvement.24

During the crisis, the United States provided convoy escort for Nationalist resupply missions in international waters and maintained the air defense of Taiwan to free up Nationalist forces to defend the offshore islands. The United States also expedited delivery of modern Army equipment, landing ships, and fighter aircraft to the Nationalists. Meanwhile, the Navy augmented the 7th Fleet with a third carrier and four more destroyers, the Air Force readied its squadron of nuclear bombers on Guam, and the Department of Defense approved the deployment of a Nike nuclear artillery battalion to Taiwan. Fortunately, the crisis never proceeded beyond the first phase of indirect military support before the PRC sought a negotiated settlement. The United States convinced Chiang to reduce the number of Nationalist forces on the offshore islands in exchange for more advanced military equipment. This offer effectively ended the Nationalist blockade of China and reduced the ROC’s ability to attack the mainland.25

Eisenhower took greater risks during the Second Taiwan Strait Crisis, which was consistent with expectations for a political leader at the end of his tenure. Eisenhower focused on pursuing quick gains because of his short time remaining in the White House. While Eisenhower’s primary concern was avoiding war and containing the spread of communism, he was also facing low domestic approval ratings and battling his military leaders and Congress over the defense budget. Furthermore, the Soviet Union’s successful launch of Sputnik and its first intercontinental ballistic missile test in 1957 heightened US fears and intensified the Cold War rivalry. Eisenhower did not have the same congressional constraints as in the first crisis because the Formosa Resolution and Mutual Defense Treaty gave him the authority to use military force. Thus, Eisenhower used a short-term, military-driven approach to end the crisis quickly, which preserved US prestige in the Cold War while protecting his personal legacy. 26

In the Second Taiwan Strait Crisis, the JCS recommendations were more consistent with expectations, from an organizational and individual perspective. The initial JCS recommendation for nuclear options reflected organizational process theory. Eisenhower’s New Look policy reduced conventional capabilities and forced military planners to rely on nuclear deterrence. Once directed to develop conventional options, though, the JCS planned a conservative, phased approach, consistent with the expectation that military experience will make leaders more risk averse. The JCS reservations may have also reflected distrust of Chiang and belief that the Nationalist forces were feigning incompetence to draw the United States further into the conflict.

Discussion

This study of the First and Second Taiwan Strait Crises shows that strategic context is an important determinant of how national leaders think about risk. Moreover, context seems to affect whether leaders take the long view or focus on short-term risks. One could expect Eisenhower and his political leaders to show present bias and seek rapid crisis resolution in both crises to protect individual and national prestige. This bias was true only in the Second Taiwan Strait Crisis; however, there was a greater sense of urgency due to the intensity of PRC attacks and US beliefs that Nationalist forces could not outlast a blockade due to limited supplies. Only after the crisis subsided did the United States recognize how ROC officials had inflated risk assessments to gain US commitment during the crisis. 27

This notable difference in the sense of urgency between the two crises could explain why Eisenhower chose a longer diplomatic approach in 1955 but used a more aggressive and short-term military approach in 1958. Another key difference was that in 1958, Eisenhower had congressional support (via the Formosa Resolution) and an existing mutual defense treaty, a foundation to use his authority to employ military forces to defend Taiwan. These authorities largely freed Eisenhower from the domestic political constraints that affected him during the First Taiwan Strait Crisis. The contrasting cases show that domestic politics can contribute to an individual leader’s risk propensities.

As expected, US leaders in these case studies took longer-term approaches when they believed near-term costs were too high or when they considered future goals more vital to US security. Eisenhower personally witnessed the destruction during and reconstruction following World War II and deeply appreciated the costs of war; thus, he pushed the limits of military deterrence and brinkmanship but never seriously considered war against China. Furthermore, Eisenhower knew the American public did not want another war on the heels of Korea, nor did key US allies support the idea of war over the disputed offshore islands. Finally, Eisenhower’s administration analyzed options in both crises within the context of the broader Cold War and the long-term goal of driving a wedge in Sino-Soviet relations, which was more important than the crisis with China and had been a US policy goal since 1953. These factors contributed to Eisenhower’s ability to keep a longer-term perspective and limit his use of military forces to the minimum necessary to deter the PRC. 28

Finally, the case studies show differences in the kinds of risks that military and civilian leaders were willing to accept during crises—but in ways that ran counter to theory. While the theory predicts military advisers should be more risk averse and less inclined to recommend military intervention, in both crises the JCS recommended direct military attacks on mainland China and the use of nuclear weapons. The Joint Chiefs’ reference point was the Korean War, which was perceived as having been constrained by politics. Furthermore, there was growing concern within the JCS and State Department that the United States had become dangerously dependent on nuclear weapons without conventional alternatives for limited war. The JCS may have advocated for nuclear options because there was a long-term goal of showing Eisenhower the risks of reducing conventional forces and leaving the nation unprepared for limited wars. This possibility of JCS ulterior motives would indicate bureaucratic politics played a role in shaping the JCS recommendations and that their view of long-term risk may have focused on risk to their internal organizations rather than risk to national interests. 29

The case studies offer insights into leaders’ risk considerations, but this review focuses on a single president’s decision making during an isolated period early in the Cold War, limiting broader applicability. Significant reforms in US national security decision making and changes in the political and economic landscape in China and Taiwan make direct comparisons difficult. These cases do, however, show that individual risk propensities and time horizons can change based on the situation, problem framing, and intensity of interests at stake, consistent with theory. Furthermore, individual experience, political factors, and organizational dynamics contribute to considering different options and using different approaches.

Potential Future Research – Third Taiwan Strait Crisis: May 1995 to March 1996

The Third Taiwan Strait Crisis began in the spring of 1995 when the William J. Clinton administration approved a visa for Taiwan’s President Lee Teng-hui to travel to the United States, which the PRC feared was a step toward US recognition of Taiwan’s sovereignty. The PRC employed several punitive diplomatic measures, along with an escalating series of military exercises and missile tests aimed at Taiwan. Although we do not know every option Clinton and his NSC debated because archival materials of the Clinton administration remain classified, there is evidence to suggest they favored a longer-term diplomatic solution and only resorted to short-term naval demonstrations after the PRC escalated coercive military pressure against Taiwan.30

The geostrategic environment for Clinton was much different from that of Eisenhower. There was no longer a global peer adversary after the end of the Cold War, and Clinton wanted a constructive relationship with China to promote trade and gain PRC cooperation on global, multilateral challenges, such as nuclear nonproliferation and other UNSC focus areas. It is possible, therefore, that Clinton’s priority was to maintain his relationship with the PRC over the long term and avoid getting entangled in near-term conflict over Taiwan. Consequently, Clinton may have chosen the most limited military deterrence option available to reduce near-term risk to the United States’ reputation while preserving long-term diplomatic and economic interests with the PRC. With little information currently available on the Third Taiwan Strait Crisis, future research could focus on this incident to compare risk decision making across different administrations.31

Implications

These case studies raise the question of how the United States will manage the risk that a Taiwan Strait crisis could escalate to global war in the contemporary security environment. During both crises, Eisenhower remained ambiguous in his commitments to defend Taiwan, which allowed him to tailor his approach to specific circumstances. Eisenhower used strategic ambiguity and limited military force to manage escalation, both with the PRC and the Soviet Union. During these crises, Eisenhower also recognized that domestic or international support for a global war over seemingly insignificant islands in the Taiwan Strait did not exist. Today, the PRC and Russia are pursuing deeper cooperation with a “no limits” strategic partnership, which raises the stakes that war with the PRC over Taiwan could escalate to global war. In future crises, US leaders must consider whether the American public and international community would support such a war before pursuing military options. This potential outcome reinforces the value of a policy of strategic ambiguity, which preserves US leaders’ abilities to manage escalation and preserves a broader range of options.32

The case studies also suggest some conditions that could make rapid military escalation more likely. The prospect of escalation could increase if the president and his advisers perceive a vital threat to US interests that justifies the high cost of war, particularly if they believe there is substantial domestic and international support for military action. Another contributing factor to the risk of escalation is a leader’s threat perception and pursuit of transformative national security policies. Eisenhower believed the United States could coexist with communist states. His foreign policy decisions reflected a preference for diplomacy, economic competition, and limited military intervention, such as deploying forces to halt Soviet and PRC expansionism, not to roll back communism. Today, under different strategic circumstances, a leader seeking to transform other state governments might enhance military capabilities for large-scale, interventionist strategies based on the belief that success follows the use of military force and risk-taking.33

One factor that could reduce the risk of escalation is the president’s openness to engaging with opposing leaders to resolve crisis, despite different values. Research shows that leaders consider information about their counterparts when calculating the probability of success in conflict. Eisenhower and his diplomats continuously engaged with the Soviet Union and PRC through direct communication, negotiations, third-party interlocutors, and back channels at multilateral forums. Leaders who regularly communicate with their counterparts, regardless of adversarial relations, may improve their risk calculations because these engagements provide more information. This practice also establishes routine communication channels during a crisis, which can help manage escalation.34

The two case studies were unique because of Eisenhower’s combat experiences and ability to understand the risk of escalation to global war. Contemporary political and military leaders lack the extensive wartime experiences that Eisenhower and his advisers gained through their diplomatic and leadership roles during World War II and the Korean War. Today, it is even more important that military advisers describe risks in clear, specific terms for civilian policymakers who lack an intuitive appreciation for the risks of military operations. Yet, the current Joint Risk Analysis Methodology (JRAM) may not provide sufficient detail for policymakers’ decision-making processes, as it produces aggregated military risk assessments based on the probability of negative consequences for individual threats. This lack of detail hinders the evaluation of cost-benefit trade-offs, as the JRAM frames risk in terms of potential losses without equivalent assessment of potential opportunities. Furthermore, the JRAM divides military risks into subsets based on time horizons, with different organizations responsible for assessing near-term and long-term risks. This method of risk assessment makes it harder to understand the intertemporal dimensions of risks and the potential long-term effects of decisions.35

The case studies also reveal the need to conduct a wide range of military planning to provide the president with different options. Eisenhower’s NSC was a robust policy-making organization with a planning board that drafted policy proposals for rigorous debate. Yet, his military leaders were still unprepared to offer conventional options. While military planners wanted decision authorities delegated for more prompt force employment, Eisenhower wanted to control escalation tightly and used a phased approach. Military planners today should expect the same cautious approach in such an intense crisis, where the risk of escalation could lead to global war. Rather than conducting detailed planning on one course of action for a potential crisis over Taiwan, the Department of War should consider multiple options with different assumptions about authorities and phasing to be prepared with viable recommendations for presidential decision making. 36

Conclusion

Leaders’ thoughts about risks over time can vary with the strategic context. In a crisis characterized by the perception of severe time constraints (conditions that do not favor building support in Congress), a US president may have incentives to employ military options to resolve the situation quickly. Yet, leaders may be more likely to consider less risky approaches when faced with the potential for high near-term costs or when weighing risks to a long-term vital interest. Further, civilian policymakers have different incentives than military leaders, so their conceptions of risks and perspectives of time are different as well. This difference in perspectives means military advisers should communicate risks with specific descriptions of potential costs, benefits, and risk drivers across different time horizons to avoid misunderstandings of military risk assessments.

While the case studies are dated and do not cover more recent Taiwan Strait crises, they still highlight three broad themes relevant for crisis planning vis-à-vis the PRC today. First, the US policy of strategic ambiguity was valuable for Eisenhower because it gave him the flexibility to explore a range of options. There is a call today for greater clarity in US policy toward Taiwan, but strategic ambiguity provides more decision space for future US leaders to develop nuanced policy options and manage escalation. Second, Eisenhower’s nuclear brinkmanship was effective against the PRC in the 1950s when the United States had an overwhelming military advantage. As China increases its nuclear capability, however, the United States will need to maintain strategic deterrence against Russia and the PRC simultaneously, which is more complex than in the past, given improving Sino-Russian relations. Finally, communication was important for Eisenhower to discern the PRC’s intent in each crisis and to employ diplomatic solutions because there were open channels for negotiations. Today, there are limited crisis communication mechanisms between the United States and China, which could increase the risk of accidental or inadvertent escalation. 37

While it may seem inevitable that US leaders will succumb to the tyranny of the urgent and focus on solving immediate crises as they erupt, the historical case studies showed that US leaders did consider how crisis response would affect their long-term policy priorities. When vital national interests were at stake, leaders weighed the potential near-term benefits against long-term priorities. China is nearing its next milestones on its path toward national rejuvenation and aims to complete military modernization by 2035. While these goals do not mean the PRC intends to invade Taiwan or that war is inevitable, they present the Department of War with readiness milestones. Balancing near-term risks with long-term modernization goals will ensure the US military assesses a range of crisis options that show cost-benefit trade-offs over time to inform presidential decision making.38

 
 

Rachel Downing
Colonel Rachel Downing is a US Army strategist and the director of planning for the XVIII Airborne Corps at Fort Bragg, North Carolina. She is a recent graduate of the US Army War College and previously served multiple assignments at the Pentagon on the Army Staff and Joint Staff, where she developed strategies, planning guidance, and methodologies for analyzing cumulative effects of military risk over time.

 
 

Endnotes

  1. 1. Chairman of the Joint Chiefs of Staff (CJCS), National Military Strategy 2022: Strategic Discipline (CJS 2022), 4, https://www.jcs.mil/Portals/36/NMS%202022%20_%20Signed.pdf; and Richard Fontaine, “The Trump-Biden-Trump Foreign Policy: American Strategy’s Strange Continuity,” Foreign Affairs, January 20, 2025, https://www-foreignaffairs-com.usawc.idm.oclc.org/trump-biden-trump-foreign-policy.
  2. 2. Yaacov Y. I. Vertzberger, Risk Taking and Decisionmaking: Foreign Military Intervention Decisions (Stanford University Press, 1998), 18; Ronald R. Krebs and Aaron Rapport, “International Relations and the Psychology of Time Horizons,” International Studies Quarterly 56, no. 3 (2012): https://www.jstor.org/stable/23256803, 530; and Rotem Dvir, “Shifting Horizons: Temporal Orientations and Conflict Decision-Making” (PhD diss., Texas A&M University, 2021), https://hdl.handle.net/1969.1/195813, 27.
  3. 3. Shane Frederick et al., “Time Discounting and Time Preference: A Critical Review,” Journal of Economic Literature XL (June 2002): 393; Daniel Kahneman and Amos Tversky, “Prospect Theory: An Analysis of Decision Under Risk,” Econometrica 47, no. 2 (March 1979): 269; and Amos Tversky and Daniel Kahneman, “Loss Aversion in Riskless Choice: A Reference-Dependent Model,” The Quarterly Journal of Economics 106, no. 4 (November 1991): 1040.
  4. 4. Michael C. Horowitz et al., Why Leaders Fight (Cambridge University Press, 2015), 10, 32, 135–36, 143.
  5. 5. Elizabeth Saunders, Leaders at War: How Presidents Shape Military Interventions (Cornell University Press, 2011), 5–6, 36–37; and Neil Snyder, “National Security in Presidential Time: The Politics of the National Security Council,” Presidential Studies Quarterly 53, no. 4 (August 21, 2023): 7.
  6. 6. Tyler Jost et al., “Advisors and Aggregation in Foreign Policy Decision Making,” International Organization 78, no. 1 (February 8, 2024): 8–9, 28; Vertzberger, Risk Taking and Decisionmaking, 403; Neil N. Snyder, “A Loud Voice and a Big Stick: Essays on Military Influence in America” (PhD diss., Stanford University, 2020), 129, ProQuest (28103900); and Tyler Jost and Joshua D. Kertzer, “Armies and Influence: Public Deference to Foreign Policy Elites,” Journal of Conflict Resolution 68, no. 9 (September 28, 2023): 2.
  7. 7. Vertzberger, Risk Taking and Decisionmaking, 399–400; and Neil Snyder, “Presidential Attentiveness to International Crises,” Presidential Studies Quarterly 54, no. 3 (May 20, 2024): 24.
  8. 8. Snyder, “National Security in Presidential Time,” 6–7; and Walter Dean Burnham, review of The Politics Presidents Make: Leadership from John Adams to George Bush, by Stephen Skowronek, American Political Science Review 88, no. 2 (June 1994), 487.
  9. 9. Snyder, “Presidential Attentiveness to International Crisis,” 2–3; and Dvir, “Shifting Horizons,” 104, 124.
  10. 10. Graham Allison and Philip Zelikow, Essence of Decision: Explaining the Cuban Missile Crisis, 2nd ed. (Longman, 1999), 5–6; and Vertzberger, Risk Taking and Decisionmaking, 41, 47.
  11. 11. “The Taiwan Straits Crises: 1954–55 and 1958,” Office of the Historian, n.d., accessed January 18, 2025, https://history.state.gov/milestones/1953-1960/taiwan-strait-crises; and “Message from the President to the Congress (February 2, 1953),” in Foreign Relations of the United States, 1952–1954, Vol. XIV, Part 1 China and Japan, ed. David W. Mabon and Harriet D. Schwar (United States Government Printing Office, 1985), 140, https://history.state.gov/historicaldocuments/frus1952-54v14p1.
  12. 12. “1954 Midterm Elections,” Wikipedia, n.d., accessed February 19, 2025, https://en.wikipedia.org/wiki/1954_United_States_elections; “McCarthyism and the Red Scare,” Miller Center, n.d., accessed February 19, 2025, https://millercenter.org/the-presidency/educational-resources/age-of-eisenhower/mcarthyism-red-scare; and “Presidential Approval Ratings – Gallup Historical Statistics and Trends,” Gallup, n.d., accessed February 2, 2025, https://news.gallup.com/poll/116677/presidential-approval-ratings-gallup-historical-statistics-trends.aspx.
  13. 13. Chester J. Pach Jr., “Dwight D. Eisenhower: Foreign Affairs,” Miller Center, accessed January 23, 2025, https://millercenter.org/president/eisenhower/foreign-affairs; Mark Perry, Four Stars: The Inside Story of the Forty-Year Battle between the Joint Chiefs of Staff and America’s Civilian Leaders (Houghton Mifflin, 1989), 48–49, 57–60; Dale R. Herspring, The Pentagon and the Presidency: Civil-Military Relations from FDR to George W. Bush (University Press of Kansas, 2005), 93; and Steven L. Rearden, Council of War: A History of the Joint Chiefs of Staff 1942–1991 (Joint History Office, 2012), 151.
  14. 14. “Dien Bien Phu & the Fall of French Indochina, 1954,” Office of the Historian, n.d., accessed January 18, 2025, https://history.state.gov/milestones/1953-1960/dien-bien-phu.
  15. 15. The Dachen Islands have two common spellings, Dachen and Tachen, due to the shift from the Wade-Giles romanization system to the Pinyin system, which spell the same Chinese character differently. During the First Taiwan Strait Crisis, US historical records reflect the name Tachen, under the Wade-Giles system because the PRC did not officially adopt the Pinyin system until 1958. (“Pinyin,” Wikipedia, n.d., accessed September 21, 2025, https://en.wikipedia.org/wiki/Pinyin; and “Dachen Islands,” Wikipedia, n.d., accessed September 21, 2025, https://en.wikipedia.org/wiki/Dachen_Islands.)
  16. 16. Bruce A. Elleman, Taiwan Straits Standoff: 70 Years of Cross-Strait Tensions (Anthem Press, 2021), 43; “Memorandum of Discussion at the 213th Meeting of the National Security Council, Washington, September 9, 1954,” in Foreign Relations of the United States, 1952–1954, Vol. XIV, Part 1, China and Japan, ed. David W. Mabon and Harriet D. Schwar (United States Government Printing Office, 1985), 587, https://history.state.gov/historicaldocuments/frus1952-54v14p1; “Memorandum of Discussion at the 237th Meeting of the National Security Council, Washington, February 17, 1955,” in Foreign Relations of the United States, 1955–1957, Vol. II, China, ed. Harriet D. Schwar (United States Government Printing Office, 1986), 285, https://history.state.gov/historicaldocuments/frus1955-57v02; and “Memorandum of Discussion at the 214th Meeting of the National Security Council, Denver, September 12, 1954,” in Foreign Relations of the United States, 1952–1954, Vol. XIV, Part 1, China and Japan, ed. David W. Mabon and Harriet D. Schwar (United States Government Printing Office, 1985), 618–19, https://history.state.gov/historicaldocuments/frus1952-54v14p1.
  17. 17. “213th Meeting of the National Security Council,” 586–88; and Arthur W. Radford, From Pearl Harbor to Vietnam: The Memoirs of Admiral Arthur W. Radford, ed. Stephen Jurika (Stanford, Hoover Institution Press, 1980), 252.
  18. 18. “213th Meeting of the National Security Council,” 611; “Memorandum of Discussion at the 243d Meeting of the National Security Council, Washington, March 31, 1955,” in Foreign Relations of the United States, 1955–1957, Vol. II, China, ed. Harriet D. Schwar (United States Government Printing Office, 1986), 433, https://history.state.gov/historicaldocuments/frus1955-57v02; and “Memorandum of Discussion at the 232d Meeting of the National Security Council, Washington, January 20, 1955,” in Foreign Relations of the United States, 1955–1957, Vol. II, China, ed. Harriet D. Schwar (United States Government Printing Office, 1986), 74, https://history.state.gov/historicaldocuments/frus1955-57v02.
  19. 19. “232d Meeting of the National Security Council,” in Foreign Relations of the United States, 73–75.
  20. 20. “Memorandum of Conversation, by the Deputy Director of the Office of the United Nations Political and Security Affairs (Bond),” in Foreign Relations of the United States, 1952–1954, Vol. XIV, Part 1, China and Japan, ed. David W. Mabon and Harriet D. Schwar (United States Government Printing Office, 1985), 717, https://history.state.gov/historicaldocuments/frus1952-54v14p1; “Memorandum of a Conversation at the Bipartisan Congressional Luncheon Meeting, Washington, March, 30, 1955,” in Foreign Relations of the United States, 1955–1957, Vol. II, China, ed. Harriet D. Schwar (United States Government Printing Office, 1986), 426, https://history.state.gov/historicaldocuments/frus1955-57v02, 426; and Elleman, Taiwan Straits Standoff, 53–54.
  21. 21. Elleman, Taiwan Straits Standoff, 92, 94–95, 100.
  22. 22. “Presidential Approval Ratings – Gallup Historical Statistics and Trends,” Gallup, n.d., accessed February 2, 2025, https://news.gallup.com/poll/116677/presidential-approval-ratings-gallup-historical-statistics-trends.aspx; “Mid-Term Revolution,” U.S. Senate, n.d., accessed February 2, 2025, https://www.senate.gov/about/parties-leadership/1958-midterm-revolution.htm; and Elleman, Taiwan Straits Standoff, 93.
  23. 23. “Summary of Meeting at White House on Taiwan Straits Situation,” in Foreign Relations of the United States, 1958–1960, Vol. XIX, China, ed. Harriet D. Schwar (United States Government Printing Office, 1996), 73–74, https://history.state.gov/historicaldocuments/frus1958-60v19; “Memorandum for the Record,” in Foreign Relations of the United States, 1958–1960, Vol. XIX, China, ed. Harriet D. Schwar (United States Government Printing Office, 1996), 53, https://history.state.gov/historicaldocuments/frus1958-60v19; and “Memorandum from the Assistant Secretary of State for Far Eastern Affairs (Robertson) to Secretary of State Dulles,” in Foreign Relations of the United States, 1958–1960, Vol. XIX, China, ed. Harriet D. Schwar (United States Government Printing Office, 1996), 63, https://history.state.gov/historicaldocuments/frus1958-60v19.
  24. 24. Byron Fairchild and Walter S. Poole, The Joint Chiefs of Staff and National Policy, 1957–1960 (Office of Joint History, Office of the Chairman of the Joint Chiefs of Staff, 2000), 211–12; “Memorandum from the Assistant Secretary for Policy Planning (Smith) to Secretary of State Dulles,” in Foreign Relations of the United States, January-August 1958, Vol. XIX, China, Dwight D. Eisenhower (1958), 58, https://history.state.gov/historicaldocuments/frus1958-60v19; “Memorandum of Conversation,” in Foreign Relations of the United States, 1958–1960, Vol. XIX, China, ed. Harriet D. Schwar (United States Government Printing Office, 1996), 90, https://history.state.gov/historicaldocuments/frus1958-60v19; and “Telegram from the Joint Chiefs of Staff to the Commander in Chief, Pacific (Felt),” in Foreign Relations of the United States, 1958–1960, Vol. XIX, China, ed. Harriet D. Schwar (United States Government Printing Office, 1996), 101–2, https://history.state.gov/historicaldocuments/frus1958-60v19.
  25. 25. “Telegram from the Joint Chiefs of Staff to the Commander in Chief, Pacific (Felt),” 75–76; and Elleman, Taiwan Straits Standoff, 100, 103–4.
  26. 26. “Sputnik, 1957,” Office of the Historian, n.d., accessed February 6, 2025, https://history.state.gov/milestones/1953-1960/sputnik.
  27. 27. “Report by the Commander, U.S. Taiwan Defense Command (Smoot) to the Commander in Chief, Pacific (Felt),” in Foreign Relations of the United States, 1958–1960, Vol. XIX, China, ed. Harriet D. Schwar (United States Government Printing Office, 1996), 507, https://history.state.gov/historicaldocuments/frus1958-60v19.
  28. 28. Dwight D. Eisenhower, Crusade in Europe (Doubleday & Company, 1948), 1; and “Memorandum of Discussion at the 169th Meeting of the National Security Council,” in Foreign Relations of the United States, 1952–1954, Vol. XIV, Part 1, China and Japan, ed. David W. Mabon and Harriet D. Schwar (United States Government Printing Office Washington, 1985), 270, https://history.state.gov/historicaldocuments/frus1952-54v14p1.
  29. 29. “Memorandum from the Assistant Secretary of State for Far Eastern Affairs (Robertson) to Secretary of State Dulles,” in Foreign Relations of the United States, 1958–1960, Vol. XIX, China, ed. Harriet D. Schwar (United States Government Printing Office, 1996), 64, https://history.state.gov/historicaldocuments/frus1958-60v19.
  30. 30. Robert Ross, “The 1995–96 Taiwan Strait Confrontation: Coercion, Credibility, and the Use of Force,” International Security 25, no. 2 (Fall 2000): 92, 95, 97, 108.
  31. 31. “Fact Sheet: U.S.-China Relations,” Bureau of East Asian and Pacific Affairs, U.S. Department of State Archive, June 20, 1997, https://1997-2001.state.gov/regions/eap/fs_us_china_relations.html.
  32. 32. Robert D. Blackwill and Richard Fontaine, “No Limits? The China-Russia Relationship and U.S. Foreign Policy,” Council Special Report No. 99 (Council on Foreign Relations, December 2024), 4.
  33. 33. Saunders, Leaders at War, 59, 67.
  34. 34. Horowitz, Why Leaders Fight, 180.
  35. 35. Joint Chiefs of Staff, Joint Risk Analysis Methodology, CJCSM 3105.01B (Joint Chiefs of Staff, 2023), B-5 to B-6, C-8.
  36. 36. Fred I. Greenstein and Richard H. Immerman, “Effective National Security Advising: Recovering the Eisenhower Legacy, Political Science Quarterly 115, no. 3 (2000): 339, https://doi.org/10.2307/2658121.
  37. 37. Michael D. Swaine, “Avoiding the Abyss: An Urgent Need for Sino-U.S. Crisis Management,” Quincy Paper No. 16 (Quincy Institute for Responsible Statecraft, September 2024), 5, https://quincyinst.org/research/avoiding-the-abyss-an-urgent-need-for-sino-u-s-crisis-management/.
  38. 38. Neil N. Snyder, “Tyranny of the Inbox: Managing the U.S. National Security Agenda,” Parameters 55, no. 1 (Spring 2025): 92, https://press.armywarcollege.edu/parameters/vol55/iss1/8/; and Ian M. Sullivan, “Three Dates, Three Windows, and DOTMLPF-P: How the People’s Liberation Army Poses an All-of-Army Challenge,” Military Review 104, no. 1 (January-February 2024): 17, https://www.armyupress.army.mil/Journals/Military-Review/English-Edition-Archives/January-February-2024/Sullivan/.
 
 

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