President Carter has the authority to terminate unilaterally the United States' mutual defense treaty with Taiwan, the U.S. Court of Appeals ruled here yesterday.

The ruling overturns a federal judge's finding that Carter violated the Constitution when he ended the pact, effective Jan. 1, 1980. The lower-court judge ruled in October that the treaty could not be ended without approval of two-thirds of the Senate or a majority of both houses of Congress.

The Carter administration said the lower court's ruling posed a "serious problem" for U.S.-Chinese relations, since the normalization of diplomatic relations with the People's Republic of China was based on an agreement to end the U.S. defense treaty with Nationalist Chinese Taiwan.

In reversing U.S. District Court Judge Oliver Gasch, the appellate court yesterday said the president must have the power "to conduct our foreign policy in a rational and effective manner."

The unsigned opinion by seven members of the court made clear that its decision in the Taiwan case did not mean that the president's authority to end treaties unilaterally is absolute. "History shows us that there are too many variables to lay down any hard-and-fast constitutional roles," the court said.

Pointing out that the United States and Taiwan had a "novel and somewhat indefinite relationship," the court added:

"The subtleties involved in maintaining armorphous relationships are often the very stuff of diplomacy -- a field in which the president, not Congress, has responsibility under our Constitution."

The court said it viewed the Taiwan situation "narrowly and in the circumstances of this treaty and its history to date."

In those limited circumstances, the court said, the attempts by Gasch to limit the president' authority had "no foundation in the Constitution."

The ruling came in a suit brought by Sen. Barry Goldwater (R-Ariz.) and 24 other conservative lawmakers who called Carter's termination of the treaty "one of the worst power grabs in history."

White House press secretary Jody Powell said, "We are obviously very pleased by the decision."

In a statement, Goldwater said, "The framers of the Constitution would turn over in their graves at this ruling. [The decision] marks the first time in American history that a court has upheld the right of a foreign country [China] to dictate national policy for the U.S."

Daniel Popeo, an attorney for Goldwater, said, "We expect to file with the Supreme Court Monday morning . . . we intend to fight this all the way." t

Gasch indicated in June that the thought Carter had exceeded his authority by unilaterally terminating the 1954 treaty but said the members of Congress lacked proper legal "standing" because Congress had not expressed an opinion on the issue.

Within hours, the Senate passed a resolution declaring its view that the Taiwan treaty could not be ended without Senate approval.

Goldwater and the other lawmakers then returned to Gasch, who ruled in their favor Oct. 17. That set the stage for the expedited move to the full U.S. Court of Appeals here, which heard arguments Nov. 13.

Eight of the court's 10 members heard arguments in the case, but Judge Harold H. Leventhal died before the opinion was issued. The court issued three separate opinions yesterday, and all seven members said they would have reversed Gasch, for various reasons.

U.S. Circuit Court Chief Judge J. Skelly Wright issued a separate opinion with U.S. Circuit Court Judge Edward A. Tamm saying they still believe the lawmakers lack legal standing to bring the case because they still have not directly confronted Carter on the issue.

"The issue here," Wright said, "is whether and in what manner Congress and the president share the power to terminate treaties. For over 200 years, through bargaining, compromise and accommodation, these popularly elected branches of our government have in fact shared the task, without the help or need of the courts."

Wright said judges have "no special competence or experience" in managing foreign affairs, so the case should be dismissed out of hand until there is a direct confrontation.

U.S. Circuit Court Judge George A. MacKinnon dissented from some aspects of the unsigned unanimous order, saying it appeared to "complacently grant to the president unbridled power in the international realm. The appetite of the presidential office will be whetted by the court's decision today."

MacKinnon said he would require a majority vote of Congress and the approval of the president before a treaty could be terminated.