In May, President Joe Biden issued a stark warning to China: The US would come to Taiwan’s military defense if China invaded.
“That’s the commitment we’ve made,” Biden said in response to a question about the U.S.’s intention to defend Taiwan. “We agree with the One China policy.” We signed it.
Although the White House quickly confirmed that the president’s comments did not reflect a change in policy, his remarks came at a time of heightened concern about China’s interest in invading Taiwan following Russia’s invasion of Ukraine.
Biden’s warning contrasted with the long-standing US stance of “strategic ambiguity” when it comes to Taiwan. That policy makes it unclear whether the U.S. would come to Taiwan’s defense if China invaded, Michael O’Hanlon of the Brookings Institution said in an interview with CNBC.
Any potential action could have implications for the global supply chain. Taiwan has positioned itself as the preferred supplier of semiconductors found in thousands of electronics, from the iPhone to critical military equipment. But global reliance on Taiwan for core chips has come under increased scrutiny amid global shortages.
Taiwan accounts for 64% of the total chip casting market, according to data from TrendForce. Taiwan Semiconductor Manufacturing Company, or TSMC, will account for 53% of total foundry revenue in 2021, according to TrendForce.
“I think the older generations might remember a Taiwan that made cheap toys,” Rupert Hammond-Chambers, president of the US-Taiwan Business Council, told CNBC in an interview. “However, that has really changed.”
Watch the video above to learn more about why tensions between China and Taiwan are rising, the importance Taiwan plays in the global supply chain, and what experts think about China’s increasing aggression against its neighboring island.
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