A superpower crunch over Taiwan is coming

China claims Taiwan as its own and says that it is prepared to invade, especially if Taiwan declares its independence. But Taiwan wants to continue as a self-governing democracy. America reconciles this contradiction with precarious ambiguity. It works to prevent Taiwan from formally breaking away, even as it opposes the use of force to resolve the dispute and sells Taiwan weapons without guaranteeing its security.

In recent years, this stand-off has become ever tenser. The past three presidential elections in Taiwan have been won by the Democratic Progressive Party (DPP), which leans towards independence. Since 2010 the island’s economic importance has soared as a local firm, TSMC, has come to dominate the manufacture of advanced semiconductors, including those for AI. China’s defence spending has tripled in current dollar terms, eroding what was America’s decisive military edge in Asia. Strategists in America cling to the hope that, so long as their country can credibly signal it might fight, China’s president, Xi Jinping, will defer his lifelong goal of unifying China. A war over Taiwan would be a catastrophe: why would Mr Xi rush to bet his legacy and the future of the Communist Party on an invasion that could go disastrously wrong?

Today, three factors have thrown all that into further doubt. First, under Mr Trump America is losing its deterrence. The president and his hawkish supporters talk about peace through strength. They portray his trade war and his pivot away from Europe as evidence that he is putting America’s rivalry with China at the heart of his foreign policy.

Unfortunately, the trade war is having the opposite effect. In 2024 Mr Trump said that if China tried to invade Taiwan he would impose tariffs: “I’m going to tax you, at 150% to 200%." Today tariffs are at 145%. America has shot its bolt. The trade war is about who can take the most pain and that is a fight China will fancy it can win. Protectionism is also harming America’s allies. Taiwan faces a levy of 32% and Mr Trump is pressing TSMC to shift plants to America. Australia, Japan and South Korea face tariffs and demands to decouple from China, a large trading partner. No Asian country is about to break its security alliance with America: none has an alternative, as our interview with South Korea’s outgoing prime minister explains. But countries will be even more queasy about being dragged into a fight over Taiwan.

Second, new Chinese plans for Taiwan sidestep the all-or-nothing gamble of an outright invasion. China continues work on seizing the island by force. The recent “Strait Thunder" drills surrounded it with 38 naval ships. Yet China is also rehearsing novel, more severe “grey-zone" tactics that fall short of outright war. Top of the list are temporary quarantines and customs inspections of ships in Taiwanese waters, using China’s vastly expanded coastguard force.

China’s aim would be to undermine Taiwan’s sovereignty and sow doubt among its citizens that America would be able or willing to come to their aid in an invasion. Many private commercial shipping firms might comply with a quarantine. International criticism of one may be less strident, following a Chinese diplomatic campaign since 2023 that has led 70 countries to support “all" efforts at reunification, creating cover for anything from inspections to invasion.

China’s grey-zone tactics are designed to exploit the third factor, which is the chronic dysfunction of Taiwan’s politics. While few Taiwanese want to be part of a communist-run China, their politics suffers from a toxic blend of polarisation and complacency. Since elections last year, Lai Ching-te, the president, has shared power with a parliament run by the mainland-appeasing KMT and a new third party backed by young Taiwanese disillusioned with the DPP. The resulting gridlock prevents Taiwan from taking decisive measures to raise its defence spending, cut its reliance on imported energy, or prepare for a crisis. Mr Lai’s efforts to crack down on Chinese infiltration have backfired, amplifying polarisation.

These factors could power a harmful feedback loop inside Taiwan, even if Mr Trump climbs down over trade. If America weakens its commitment to defending Taiwan, then Taiwan may lose the resolve to resist. And if Taiwan is not prepared to defend itself, America will be less likely to come to its aid. The risk is that this creates a trajectory in which Taiwan gradually comes under China’s sway without a shot being fired. True, Mr Trump could choose to escalate at any point. But rather than risk a nuclear war with China, he may let the island slip away or make a deal that, in effect, gives it up.

What would this mean? It would be a disaster for Taiwanese democracy. In time Taiwan might even elect a government sympathetic to China. There would also be a panic over Western chip supply. It would not necessarily end American dominance of the Pacific. But a huge amount of work would be needed to renew it. The People’s Liberation Army could free up resources, giving it greater reach. America’s armed forces would have to move from their current posture defending the first island chain, close to China, to the second island chain linking Japan and Guam. Allies in Asia would need new economic and military treaties if they were to be reassured. Without this they might acquire nuclear weapons.

Mr Trump wants to project strength. His protectionism and toughness with allies are supposed to make America great, but they are weakening its ability to protect Taiwan. That contradiction will not go unnoticed in Beijing. Not long ago it made sense for Mr Xi to think he should wait to wrest control of Taiwan. He may now conclude that he has an opportunity upon which he must act soon, before it goes to waste.