To defend or not to defend Taiwan is the question

This article was originally published by Taiwan New. Cathy Fang is a contributor analyst at PLA Tracker and Safe Space and serves as an editor and podcast host for US-Taiwan Watch. Previously, she worked as a policy analyst at the Project 2049 Institute. 

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US cannot afford to stand on sidelines in potential Taiwan conflict

As we approach 2027 and a potential invasion of Taiwan by China, the debate over Taiwan’s defense has reached a fever pitch. With a new US president on the horizon, the discourse has attracted a constellation of influential voices, each illuminating a different facet of this complex issue.

Imagine a spectrum of opinions with on one end, a strong call to defend Taiwan as a core US interest and on the other, a cautious step back from intervention. Former Vice President Mike Pence and retired US Navy Rear Admiral Mark Montgomery plant their flags firmly on the “defend” side.

Meanwhile, former Deputy Assistant Secretary of Defense for Strategy and Force Development Elbridge Colby treads a nuanced middle ground, his stance peppered with caveats. At the far end, military analyst Jennifer Kavanagh advocates for a more hands-off approach.

These four experts have shared their views with various audiences, creating a mix of agreement and disagreement. For Taiwan, the task is not only to understand these diverse perspectives but also to identify common ground and differences to shape a coherent strategy for its future.

The crux of the matter lies in the US imperative to crystallize its perception of core interests and the associated risks and costs it is willing to shoulder. The strategic planning demands a meticulous categorization of Taiwan’s geopolitical significance, democratic values, and semiconductor prowess within the US hierarchy of interests.

This clarification has never been more crucial, as China’s military might burgeons at an unprecedented pace, narrowing the gap with the US in both scope and scale. Yet, the quest for a coherent stance is fraught with complexity, as the calculus of defending Taiwan militarily fluctuates not only between administrations but even within the same corridors of power, shifting with each new commander at the helm.

Hidden costs of inaction

As tensions escalate in the Taiwan Strait, the US finds itself at a critical juncture that demands careful consideration and bold leadership. The potential cost of military intervention to defend Taiwan is undoubtedly staggering, but it confronts a sobering reality as well: can it afford the price of inaction?

Should a conflict break out, the cost and risk of defending Taiwan militarily may be more easily quantified than the consequences of not defending the country. While the financial and human toll of such a conflict can be estimated with some degree of accuracy, the long-term geopolitical and economic ramifications of abandoning Taiwan to its fate are far more difficult to measure.

Certainly, the decision of the US commander-in-chief to defend Taiwan militarily is not to be taken lightly. It would undoubtedly involve significant loss of life, strain on military resources, and economic disruption.

However, one must also weigh the cost of inaction. Failing to defend Taiwan against aggressors could embolden other authoritarian regimes, induce nuclear proliferation and arms races, and detrimentally undermine the US’ credibility as a global leader and defender of democracy.

This could destabilize the entire Indo-Pacific region, with every regional country struggling to adjust its security strategy through varying degrees of bandwagoning. These “inaction” ramifications, however lofty, are not clearly defined — let alone calculable. Thus, the cost of action seems more persuasive, as numbers from war games speak louder than prophetic narratives.

Conservative economic projections

Recent projections provide concrete evidence of the economic costs and ripple effects of a potential conflict over Taiwan. These are far from abstract predictions.

Picture this, a global economic tsunami, triggered by a Chinese invasion of Taiwan. The ripple effects? Nothing short of staggering.

Bloomberg paints a chilling picture of a US$10 trillion (NT$319 trillion) hit to the world economy — 10% of global GDP. East Asian nations would bear the brunt. The US, despite its 12,130-km buffer, would see its economy shrink by 6.7%.

Now, consider a less catastrophic scenario, a blockade. The damage would be halved, but would still be a 5% global GDP decline, comparable to the recent COVID-19 pandemic and the 2008 financial crisis. The US would still feel the sting, with a 3.3% GDP dip.

These numbers are not mere statistics, they are a testament to Taiwan’s pivotal role in the global economy. The nation’s semiconductor industry produces 65% of the world’s chips and 90% of the most advanced ones — and this is just the tip of the iceberg.

The real story lies in the intricate web of supply chains, particularly those feeding Taiwan Semiconductor Manufacturing Company’s US clientele. Here is a sobering thought. Sectors relying on chips as direct inputs contribute 5.6% to global value-added, or nearly US$6 trillion. The combined market cap of TSMC’s top 20 customers? A staggering US$7.4 trillion.

But here is the kicker, these projections assume a neatly contained conflict. In reality, the threat of escalation looms large, potentially unleashing even more economic chaos on an unsuspecting world.

True Cost of Inaction

As tensions escalate globally, critics argue that US intervention in a Taiwan contingency is too costly. They cite potential loss of life, US military might, and domestic economic disruption as reasons for restraint.

While these concerns merit serious consideration, one must look beyond the immediate balance sheet to fully grasp what is at stake. The true cost of our choices will be measured not just in dollars and lives, but in the values the US upholds and the world order we shape for future generations.

At its core, this is about preserving a rules-based international system, one that has underpinned global stability and prosperity for decades.

Inaction in the face of aggression carries its own steep price. It emboldens those who seek to undermine the foundations of international law and cooperation.

The erosion of this system could have far-reaching consequences, potentially leading to a more chaotic world that is in no one’s interest. As the US stands at this crossroads, a robust national dialogue is imperative.

Time is closing, and the world is watching. History will judge the US’ actions (or inaction) when the pivotal moment arrives. A sagacious decision will not diminish but rather fortify the US’ leadership.

(Featured photo from President Joe Biden Facebook page)