China-U.S. relations and cross-Strait relations are intertwined. The U.S.-China strategic competition has increasingly become a driving force reshaping future cross-Strait dynamics. As the U.S.-China strategic competition escalates, the level of mutual trust is diminishing and the risk of war across the Taiwan Strait is rising. Washington and Beijing have fundamental differences over what “one China” means. Intensifying China-U.S. strategic competition in the Indo-Pacific region will have a negative bearing on future development of cross-Strait relations and how Washington and Beijing resolve their differences over Taiwan. Whether or not Washington plays the “Taiwan card,” domestic politics in Washington and great power competition are directing the cross-Strait relationship to an uncertain direction. The Taiwan Strait could be the place where the world’s two biggest powers fight a war. Yet, hyping war threat and playing the “Taiwan card” against China in domestic politics is convenient but very dangerous. It would be in everyone’s interest to dampen the hyping of war in the Taiwan Strait.