In the context of an economic war based on tech, quantum computing, chips, AI etc…

As the self-governing island comes under increased pressure from China, a Senate committee in the US has taken the first step toward legislation that would considerably increase US military support for Taiwan, perhaps including billions of dollars in new security assistance.

According to long-standing law, the US has given Taiwan weapons to protect itself, but the Taiwan Policy Act of 2022 would go a step further by giving security aid worth $4.5 billion over four years. 

Despite opposition from Beijing and reservations from members of President Joe Biden's administration, the Senate Foreign Relations Committee supported the legislation 17 to 5 last week.

The Taiwan Relations Act of 1979 was passed after Washington switched its formal diplomatic recognition to Beijing. It requires the US to "preserve and promote extensive, close and friendly commercial, cultural, and other relations between the people of the United States and the people of Taiwan." According to the bill's sponsors, this would be the most comprehensive reorganization of US policy towards the island since that time.

Before becoming law, the measure still needs to be approved by both the full Senate and House. The White House has not confirmed whether Biden would sign the bill, but Congress could override any potential veto with strong bipartisan backing.

The new law is being implemented as Taiwan-related tensions rise following a visit by House Speaker Nancy Pelosi, which spurred China to conduct days-long, extensive military drills over and around the island.

The Chinese deployed several military drills near Taiwan after Pelosi's visit

The presidential office commended the Senate for its most recent display of support, saying the law will "help promote the Taiwan-US collaboration in many areas," including security and economic cooperation. Taiwan has accused Beijing of attempting to disrupt the status quo on the island.

When the law was submitted in June, Beijing declared it would be "compelled to take decisive countermeasures" if Washington adopted acts that hurt China's interests. The US has long followed a policy of "strategic ambiguity" on Taiwan.

Taiwan would be given the rank of "major non-NATO ally" under the proposed legislation, which is reserved for the closest US allies not part of the transatlantic alliance. Additionally, the law specifies that rather than only "defensive" weapons, the US will send weaponry "conducive to deterring acts of aggression" by China as a reflection of shifting dynamics since the 1979 act.

Then there’s the sanctions against China:

The US believes that penalties against China will dissuade Taiwanese action. Targeting critical technologies like computer chips and telecom equipment will go beyond current security precautions.

According to individuals familiar with the discussions, the European Union is under diplomatic pressure from Taipei to follow suit as the United States considers alternatives for a sanctions package against China to dissuade it from invading Taiwan.

According to the sources, discussions in Washington and Taipei's separate lobbying of EU envoys are both in the early stages and are in response to growing worries of a Chinese invasion as military tensions in the Taiwan Strait increase. The goal in both situations is to impose penalties in addition to those already implemented in the West to limit certain trade and investment with China in critical technologies like computer chips and telecom equipment.

Given the US and its allies' enormous economic entanglements with China, the prospective implementation of sanctions against it is a far more complex exercise than penalties against Russia, according to Nazak Nikakhtar, a former senior official in the US Commerce Department.

Chinese President Xi Jinping has pledged to annex democratically-run Taiwan and hasn't ruled out using force to achieve this goal. At the Communist Party meeting the following month, he is expected to win a third, five-year leadership term. 

According to Craig Singleton of the Foundation for Defense of Democracies, first sanctions discussions will probably focus on limiting China's access to certain technologies needed to maintain a military assault against Taiwan.

After Russia's invasion of Ukraine, Taiwan had previously discussed penalties with European authorities, but China's most recent military drills have made Taiwan's position more rigid. 

According to a source briefed on the conversations, Taiwan has not requested anything in particular, simply that Europe prepares its response in case China launches an attack.

According to a second person familiar with the situation, EU authorities have so far refrained from enacting severe sanctions against China for human rights violations because the country is significantly more important to the bloc's economy than Russia.

EU sanctions would necessitate agreement from all 27 members, which is frequently elusive; agreement was difficult to come by even when Russia was isolated after its invasion of the Ukraine, in part because Germany depended on its gas.

Germany, the economic engine of the union, is "wary," according to a different official with knowledge of the conversation. The way they regard their relationship with China hasn't changed substantially, in my opinion, as a result of the Russia-Ukraine conflict.

the German government is becoming increasingly concerned about its reliance on China for its economic growth

; on Tuesday, the economy minister promised a new trade strategy and "no more naivety."

US President Joe Biden has reaffirmed Washington's commitment to military support for Taiwan in the event of a Chinese invasion of the island in an interview with CBS broadcast on Sunday evening.

While the Biden administration later stressed that its policy towards Taiwan hadn't changed and the US would not officially say whether US forces would defend Taiwan, Biden once again appeared reluctant to toe the line of "strategic ambiguity."

When asked categorically by CBS's Scott Pelley if US troops would defend Taiwan in the event of a Beijing invasion, Biden simply replied "Yes."

China reacted angrily, calling it a "serious violation" of the "One China Principle" and the commitments the US has made to Beijing. Foreign Ministry spokeswoman Mao Ning told the press in Beijing on Monday. She said the US side was sending "the completely wrong signal" to the independence forces in Taiwan. "China is firmly against it."

Biden has form on the issue, causing consternation during a trip to Japan in May, when he said that the US had an "obligation" to defend Taiwan.

Tensions with China have risen significantly since then, reaching a peak in August when Speaker of the US House of Representatives Nancy Pelosi caused outrage in Beijing when she visited Taiwan.

Taiwan's Foreign Ministry on Monday welcomed Biden's comments, with spokesperson Joanne Ou saying that since China escalated tensions in the Taiwan Strait in August, the Biden administration has shown strong support for Taiwan that has included sending US Navy vessels through the Taiwan Strait.

Ou said Taiwan would continue to enhance its self-defence capacity in the face of Beijing's continuing military provocations, while attempting to further deepen the US-Taiwan security partnership.

Recap US, Taiwan & China: Sanctions & Billions in Military Aid

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