In May, President Joe Biden issued a stark warning to China: The U.S. would come to Taiwan’s protection militarily if China have been to invade.
“That’s the dedication we made,” Biden mentioned in response to a query over the U.S.’ intention to guard Taiwan. “We agree with the ‘One China’ coverage. We signed on to it.”
Although the White House shortly affirmed the president’s feedback didn’t replicate a coverage shift, his remarks got here at a time of heightened concern over China’s curiosity in invading Taiwan after Russia’s invasion of Ukraine.
Biden’s warning contrasted with the U.S.’ long-standing place of “strategic ambiguity” on the subject of Taiwan. That coverage makes it unclear whether or not the U.S. would come to Taiwan’s protection if China have been to invade, the Brookings Institution’s Michael O’Hanlon instructed CNBC in an interview.
Any potential motion might have repercussions on the worldwide provide chain. Taiwan has positioned itself because the go-to provider of the semiconductors present in 1000’s of electronics, from the iPhone to essential navy tools. But the worldwide reliance on Taiwan for the important chips has come beneath elevated scrutiny amid a worldwide scarcity.
Taiwan accounts for 64% of the whole chip foundry market, based on knowledge from TrendForce. Taiwan Semiconductor Manufacturing Company, or TSMC, accounted for 53% of whole foundry income in 2021, based on TrendForce.
“I believe for older generations, they could bear in mind a Taiwan that produced low-cost toys,” mentioned Rupert Hammond-Chambers, president of the US-Taiwan Business Council, in an interview with CNBC. “That, nevertheless, has actually shifted.”
Watch the video above to search out out extra about why tensions between China and Taiwan are on the rise, the significance Taiwan performs within the world provide chain, and what consultants suppose might come of China’s elevated aggression towards its neighboring island.