Why Taiwan is Central to the U.S. Economic and Defence Strategy in the Indo-Pacific

Overview
In the intricate chessboard of global geopolitics, the United States’ unwavering support for Taiwan is not merely symbolic. It is a calculated strategy that intertwines military, ideological, and economic interests, especially in light of rising tensions in the Indo-Pacific region. Taiwan stands at the crossroads of crucial U.S. priorities—defence, democracy, and technological superiority.

1. Indo-Pacific Strategy: Taiwan’s Geopolitical Importance

Taiwan’s geographic location is squarely within the U.S.’s Indo-Pacific defence strategy. Situated within the First Island Chain—a string of islands critical to controlling East Asian naval movements, Taiwan is a buffer against China’s expanding military influence, especially in the South China Sea. Its proximity to major shipping lanes vital for global trade further enhances its strategic importance.

  • Statistics: Over 30% of global maritime trade passes through the South China Sea, making control of these waters pivotal.
  • Military Dynamics: Taiwan’s defence fortifies the U.S.’s ability to project regional power and prevent Chinese naval dominance. By supporting Taiwan, the U.S. also aims to uphold a “free and open Indo-Pacific,” a cornerstone of its Asian foreign policy.

2. Championing Democracy and Human Rights

Beyond military considerations, Taiwan symbolizes democratic resilience in a region with rising authoritarianism. Since the enactment of the Taiwan Relations Act of 1979, the U.S. has been legally committed to supporting Taiwan’s defence against external threats, mainly from China.

  • Commitment to Democracy: Taiwan is one of the most vibrant democracies in Asia, and U.S. support aligns with its broader mission to uphold democratic governance worldwide.
  • Human Rights: Supporting Taiwan also reflects the U.S.’s ideological stance against authoritarian regimes, particularly given China’s growing influence over the region’s politics.

3. Technological Dependency: Taiwan’s Semiconductor Dominance

Taiwan’s role in the global economy cannot be overstated, particularly in semiconductor manufacturing. Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, is crucial for industries ranging from consumer electronics to defence.

  • Global Market Share: Taiwan controls more than 60% of the worldwide semiconductor market, and TSMC produces chips for everything from smartphones to missile systems.
  • U.S. Tech Reliance: Leading U.S. tech companies and defence contractors rely on Taiwan for advanced semiconductors, making its protection essential for economic stability and national security.

Conclusion: A Multifaceted Alliance

The U.S.’s support for Taiwan is not a matter of simple allegiance but a complex nexus of defence strategy, democratic values, and economic interests. Maintaining Taiwan’s autonomy helps ensure regional stability, safeguards global trade routes, and secures the technological edge that drives consumer and defence industries. In an era of intensifying U.S.-China competition, Taiwan’s role as a strategic partner will only grow in importance.