The Taiwan Relations Act establishes U.S. policy to maintain strong commercial, cultural, and other relations with Taiwan, emphasizing the importance of peace and stability in the Western Pacific. It asserts that the future of Taiwan should be determined peacefully and provides for U.S. arms sales to Taiwan for defensive purposes. The Act ensures Taiwan's participation in international organizations and allows for legal actions involving Taiwan in U.S. courts. It also mandates regular reports on U.S.-Taiwan economic relations and authorizes the establishment of the American Institute in Taiwan to facilitate these relations, ensuring continued support and cooperation.