The Real Threat to Taiwan

Key Points:

• China is increasingly using gray-zone tactics, such as coast guard inspections and flight manifest demands, to assert control over Taiwan's trade and travel without overt military aggression, effectively seizing control of Taiwan’s external links.
• Beijing’s approach aims to coerce Taiwan and other regional neighbors economically, establishing norms of control that could reshape the regional and global economic order without war, challenging U.S. alliances and influence.
• The U.S. currently lacks an integrated strategy to manage gray-zone crises involving Taiwan, including economic responses, communication with markets, and contingency plans for resupply or evacuation under blockade-like conditions.
• A comprehensive U.S. deterrence strategy should include political engagement with Taiwan and allies, military modernization focused on asymmetric capabilities, strategic nuclear and AI advancements, and a new economic deterrence approach emphasizing gradual “avalanche decoupling” from China.
• Deterring Chinese escalation requires convincing Xi Jinping that a crisis over Taiwan would be politically, economically, and strategically damaging to China’s national rejuvenation goals, necessitating coordinated allied preparation for crises beyond conventional war scenarios.