Here, in capsule form, is what the members of Congress should about Taiwan:
According to the powers vested in Congress by the territorial clause of the US Constitution, and the precedent established for Guam in 48 USC 1421, the following additions must be made to Title 48 of the United States code regarding "Territories and Insular Possessions."
Territory included under name Taiwan The territory historically known as "Formosa and the Pescadores," over which Japan renounced all right, title, and claim, and which continues to be held by the United States as "principal occupying power," in accordance with the provisions of the Treaty of Peace between the United States and Japan, signed at San Francisco, September 8, 1952, and entered into force April 28, 1952, shall be known as Taiwan.
Here is a further explication of this legal position.
THE CONSTITUTIONAL ARGUMENT
There is a surprisingly little known, but very coherent argument which says that Taiwan is an overseas territory of the United States of America, and the US Congress has jurisdiction over it. This argument proceeds as follows. First, the Constitution clearly gives Congress the power “to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States .... ”
Second, all treaties involving territorial cession from the 1803 Louisiana Purchase to the present have always contained a provision to the effect that “the civil rights and political status of the native inhabitants shall be determined by the Congress,” hence customary law gives Congress authority in this area as well.
If Congress doesn’t take any action, reference must be made to the Insular Cases of the US Supreme Court, where the Justices determined that even without any action by Congress, “fundamental rights” under the Constitution apply to the native inhabitants of all US territories.
Third, the US Constitution has placed no limit upon the war powers of the government, but they are regulated and limited by the laws of war. One of these powers is the right to institute “military governments.” As explained by US Army Field Manual FM 27-10, “The Law of Land Warfare,” para. 362, “Military government is the form of administration by which an occupying power exercises governmental authority over occupied territory.” Regarding the legal details of such an arrangement, the international laws of war hold that the “conqueror” is the (principal) occupying power, and that territory under military occupation is not considered to have reached a “final political status.”
Fourth, all military attacks on the four main Japanese Islands and (Japanese) Taiwan during the December 8, 1941 through the Fall 1945 period were conducted by United States military forces. The Republic of China (ROC) military forces did not participate. Hence, in relation to Taiwan, the United States is the "conqueror."
Fifth, the ROC was entrusted with authority over Formosa and the Pescadores (aka Taiwan) based on the specifications of General Order No. 1, issued on of Sept. 2, 1945, by General Douglas MacArthur. After a thorough review of the specifications of this General Order, the question which must be asked is: "In these Pacific Ocean areas and environs, who is fulfilling the role of the principal occupying power as specified in the international laws of war?”
As we know, President Harry Truman approved General Order No. 1 before its promulgation, the United States is the "conqueror" of Taiwan, and General MacArthur is the head of the United States military forces in the Far East. Hence the strongest presumption would be that United States is the principal occupying power of Taiwan. Importantly, Article 23 of the post-war Senate ratified San Francisco Peace Treaty (SFPT) specifies this fact in very clear language.
To restate this, Taiwan was ceded by Japan in SFPT Article 2b without designating any “receiving country.” Under such an arrangement, legally speaking, Taiwan escheats to the conqueror and principal occupying power as an interim status condition. Indeed, SFPT Article 4b confirms that United States Military Government (USMG) jurisdiction over Taiwan is active.
Sixth, Article VI of the US Constitution specifies the supremacy of Senate-ratified treaties, stating that “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land …” Therfore, the specifications of the Senate-ratified SFPT must be considered binding on all US government departments.
Seventh, the military history of the United States in dealing with other territorial cessions after war clearly shows that USMG jurisdiction over territory only terminates when local civil government, recognized by the US federal government, begins functioning. This supplanting of USMG is always accompanied by a formal announcement of the transfer of authority. This is clearly illustrated by an examination of the Spanish American War cessions, when USMG jurisdiction ended on the following dates: Puerto Rico, May 1, 1900; Philippines, July 4, 1901; Cuba, May 20, 1902; Guam, July 1, 1950. These dates were all quite some time after the coming into force of the post-war Treaty of Paris on April 11, 1899, and there were formal announcements by the US Commander in Chief on each occasion. Not surprisingly, numerous US Supreme Court cases have confirmed the important principle inherent in such a formulation, namely: “For a territorial cession, the military government of the principal occupying power does not end with the coming into force of the peace treaty, but continues until legally supplanted.”
Eighth, a complete overview of all treaties, laws, communiqués, and other important announcements of the US Executive Branch in the period of 1952 to the present fails to find any announcement of the end of USMG jurisdiction over Taiwan. Moreover, the author has hired legal researchers in Washington D.C. who have combed US government records for over one year and have confirmed this analysis.