In May, President Joe Biden issued a strong warning to China: the U.S. would come in Taiwan’s military defense if China invaded.
“This is the commitment we made,” Biden said in response to a question about the U.S.’s intention to protect Taiwan. “We agree with the ‘One China’ policy. We signed it.”
Although the White House quickly stated that the president’s comments did not reflect a change in policy, his comments came at a time of great concern over China’s interest in invading Taiwan after the Ukrainian invasion. by Russia.
Biden’s warning contrasted with the U.S.’s long-standing position of “strategic ambiguity” when it comes to Taiwan. This policy makes it unclear whether the U.S. would come to Taiwan’s defense if China invaded, Brookings Institution’s Michael O’Hanlon told CNBC in an interview.
Any potential action could have repercussions on the global supply chain. Taiwan has positioned itself as the leading supplier of semiconductors found in thousands of electronics, from the iPhone to crucial military equipment. But Taiwan’s global reliance on essential chips has come under greater scrutiny amid global scarcity.
According to TrendForce data, Taiwan accounts for 64% of the total chip casting market. The Taiwan Semiconductor Manufacturing Company, or TSMC, accounted for 53% of total smelter revenue in 2021, according to TrendForce.
“I think for the older generations, they may remember a Taiwan that produced cheap toys,” Rupert Hammond-Chambers, chairman of the U.S.-Taiwan Business Council, said in an interview with CNBC. “That, though, has really changed.”
Watch the video above for more information on why tensions between China and Taiwan are rising, how important Taiwan is in the global supply chain, and what experts think could stem from the rise in China’s aggression. against its neighboring island.