The end of Taiwan’s strategic flexibility
The escalating rhetoric between Washington and Beijing reached a new crescendo last weekend when US Defense Secretary Pete Hegseth declared that China poses a threat that “could be imminent,” warning that Beijing is “credibly preparing to potentially use military force to alter the balance of power in the Indo-Pacific.”
China’s foreign ministry fired back immediately, accusing Hegseth of a “cold war mentality” and demanding that the US “stop inciting conflict” in the Asia-Pacific region.
This verbal warfare exemplifies exactly why Taiwan finds itself in an increasingly untenable position that deserves far more attention than it currently receives.
While policymakers in Washington and Taipei publicly maintain that US-China strategic competition enhances Taiwan’s value, the reality may be far more sobering: the island risks becoming the primary casualty of this new bipolar world order.
The uncomfortable truth that neither side wants to acknowledge is stark: Taiwan’s strategic importance to America has historically stemmed from its unique position as a technological and economic bridge between Western innovation and Chinese manufacturing capacity.
As this bridge systematically burns under the weight of great power rivalry, so too does much of Taiwan’s economic relevance and diplomatic leverage.
The semiconductor trap
Taiwan’s semiconductor dominance didn’t emerge in isolation—it flourished precisely because it could serve both American technological advancement and Chinese production needs simultaneously.
TSMC’s remarkable success story is fundamentally about occupying the crucial nexus in a globalized supply chain that current US policy is methodically dismantling. When that integrated system fractures, Taiwan doesn’t automatically become more strategically valuable; it risks transformation into an expensive military outpost with diminishing economic justification.
The current export restrictions on advanced semiconductors and manufacturing equipment present Taiwan with what amounts to an impossible choice: comply with Washington’s demands and forfeit access to China—still Taiwan’s largest trading partner—or resist these controls and risk losing access to critical American technology and security guarantees.
What makes this particularly problematic is that these restrictions weren’t designed to benefit Taiwan; they’re crafted to contain China while preserving American technological superiority. Taiwan is expected to function as America’s high-tech manufacturing base while being severed from its most significant market.
This isn’t strategic partnership—it’s technological dependency with geopolitical strings attached.
Talent drain paradox
Washington’s broader restrictions on Chinese students and researchers create another unintended consequence that directly undermines Taiwan’s interests.
Recent announcements by Secretary of State Marco Rubio to “aggressively revoke visas for Chinese students, including those with connections to the Chinese Communist Party or studying in critical fields” reveal a critical blind spot that damages Taiwan’s long-term prospects.
When the US becomes less accessible to Chinese talent—particularly from Hong Kong and mainland China in sensitive technological fields—these individuals don’t simply disappear. They redirect to Singapore, the UK, or increasingly, remain home to strengthen China’s domestic capabilities.
Taiwan, despite its democratic credentials and technological expertise, often gets overlooked in this reshuffling because it lacks the scale and global academic brand recognition to effectively capture this displaced talent pool.
More perversely, Taiwanese students and researchers in America now face heightened scrutiny due to bureaucratic confusion over their status. The broad-brush approach to restricting “Chinese” academic collaboration frequently fails to distinguish between Taiwan and mainland China, creating unexpected barriers for Taiwan’s own academic and research communities.
End of strategic flexibility
Perhaps most concerning is how this new bipolar competition eliminates Taiwan’s traditional diplomatic maneuverability.
The Hegseth-Beijing exchange illustrates this perfectly: when American officials frame the situation in such stark, militaristic terms and China responds with equally heated rhetoric about US “provocations,” Taiwan loses any space for nuanced positioning.
During periods of US-China engagement, Taiwan could leverage relationships with both sides, executing a complex but effective balancing act that maximized its options and influence. The current zero-sum dynamic forces Taiwan into a binary choice that fundamentally eliminates its strategic autonomy.
When Washington and Beijing were economically intertwined, both had powerful incentives to avoid military confrontation over Taiwan—too much economic value was at stake. As these ties dissolve, the cost-benefit calculation for potential military action shifts dramatically.
Paradoxically, economic separation may make conflict more probable, not less. When defense secretaries openly speak of “imminent” threats and foreign ministries respond with accusations of “stoking flames,” the temperature rises to dangerous levels that leave little room for the kind of strategic ambiguity that has long served Taiwan’s interests.
The broader trend toward “supply chain warfare” poses a significant threat to Taiwan’s position as a global innovation hub. Innovation thrives on the free movement of ideas, talent, and capital across borders. As these flows become weaponized tools of statecraft, Taiwan’s ability to maintain its technological edge becomes increasingly challenging.
Taiwan’s historical success has been built on being globally connected while preserving its distinct identity. Forced economic bifurcation threatens this model at its foundation. The island risks becoming highly proficient at producing yesterday’s technology for an increasingly narrow customer base.
Toward strategic polycentrism
Taiwan urgently needs to develop what might be called “strategic polycentrism”—building capabilities and relationships that don’t require either Washington’s or Beijing’s approval. This approach demands:
Diversifying technological partnerships beyond the US-China axis, particularly with Europe, Japan, and emerging economies that offer growth potential without the complications of great power competition.
Creating new institutional frameworks that allow Taiwan to maintain economic engagement with China while preserving security relationships with the US—perhaps through multilateral mechanisms that provide political cover for all parties.
Investing heavily in indigenous innovation capabilities that reduce dependence on either American technology transfers or Chinese market access.
Building specialized advantages that larger powers cannot easily replicate, focusing on high-value niches rather than attempting to compete in mass markets.
Courage to disappoint
The most unconventional aspect of Taiwan’s current predicament is this: the island’s long-term survival may require developing the capacity to disappoint both Washington and Beijing when their demands conflict with Taiwan’s fundamental interests. This isn’t about choosing sides—it’s about choosing survival.
Taiwan’s leadership must recognize that both great powers view the island primarily through the lens of their own strategic competition, not Taiwan’s welfare.
When American officials speak of Taiwan primarily as a strategic asset against an “imminent” Chinese threat, and when Beijing responds by framing Taiwan as an “internal affair” that brooks no foreign interference, Taiwan’s own voice gets lost in the escalating rhetoric.
Genuine strategic autonomy requires the political courage to occasionally frustrate allies and the wisdom to understand that Taiwan’s interests aren’t always identical to America’s interests, regardless of how aligned they may appear.
The current trajectory leads Taiwan toward becoming a heavily fortified, economically isolated garrison state. While this may serve American strategic objectives, it’s unclear how it serves the Taiwanese people, who deserve both security and prosperity, not a forced choice between them.
Taiwan’s greatest asset has always been its adaptability and strategic acumen. In this new era of great power competition—where defense secretaries speak of imminent threats and foreign ministries trade accusations of warmongering—it will need both qualities more than ever to chart a course that serves its own interests first.
Y. Tony Yang, endowed professor and associate dean at George Washington University in Washington, DC, earned a law degree from National Taiwan University and a doctoral degree from Harvard.