In 2012, political developments in Taiwan were somewhat different from what observers predicted at the beginning of the year. The ruling party is now weaker than what it appeared earlier. The United States and mainland China are the two most crucial factors which will determine the future of Taiwan, and at the moment the US’s influence on the political landscape and political orientation in Taiwan is, in general, larger than that of mainland China. This chapter will discuss the major issues in current cross-strait relations and analyse Taiwan’s relations with the United States, China and Japan.