With the fall of Kabul not yet six months past, Washington faces a fresh test of its ability to sustain Pax Americana, as more than 100,000 Russian troops, heavy artillery and tanks mass on Russia’s border with Ukraine. The mounting crisis looks set to become the greatest test of US President Joe Biden’s administration to date — the outcome of which could have far-reaching implications and send ripples through the Taiwan Strait.
Moscow’s Ukraine gambit appears designed to probe the Biden administration — to ferret out its red lines and ascertain whether Washington is willing to commit troops to defend its ally. In essence, the purpose is to determine whether Biden is all bark and no bite. There can be little doubt that Chinese President Xi Jinping (習近平), who openly aspires to dethrone the US as the world’s pre-eminent power, is watching the unfolding events with keen interest.
During a White House news conference on Wednesday, Biden engaged in a rather eccentric form of diplomacy. He said: “My guess is that [Russian President Vladimir Putin] will move in [to Ukraine]” — appearing to have conceded the inevitability of an invasion while US Secretary of State Antony Blinken was in Kiev holding emergency talks in an effort to reach a diplomatic solution.
Nevertheless, Biden did say that should Russia use military force, the US would retaliate with stringent sanctions that could include cutting Russia off from the global banking system by blocking its use of SWIFT, the global interbank payment system. Were Biden to follow through with the threat, it would certainly give Beijing pause for thought. One of the Chinese Communist Party’s private fears is that Chinese banks could be cut off from access to the US dollar, which Chinese businesses rely on to conduct transactions outside of China’s borders due to the high volatility of the yuan. Removing or significantly limiting access to the US dollar would shake the foundations of China’s export-led economy and imperil its financial system.
If Russia were to annex Ukraine without meaningful repercussions, it could lead Xi, full of hubris from a victory in Hong Kong, to conclude that he now has a golden opportunity to annex Taiwan. US administrations, stretching back to that of former US president Barack Obama, have, in Beijing’s eyes, demonstrated that the US is war-weary and no longer has an appetite for foreign intervention. Ukraine’s annexation would reinforce the prevailing narrative among China’s leadership and intellectual class that the US is, if not in terminal decline, then at least re-entering a period of isolationism.
Some have criticized previous US administrations, as well as the EU, for having dangled the offer of NATO and EU membership before Ukraine, and for having encouraged the overthrow of Ukraine’s pro-Russian former president Viktor Yanukovych. Critics argue that Western leaders unnecessarily “poked the Russian bear” and forced the Kremlin to act to protect its sphere of influence. Others argue that the history of the 20th century shows that appeasement never works against strongman leaders such as Putin or unalloyed dictators like Xi — and that, prior to Russia’s 2014 invasion of Crimea, Putin had already used military force against Georgia.
Whatever the rights and wrongs of the West’s policy toward Russia, the mounting Ukrainian crisis is certainly a headache that the US could do without. The last thing Washington and Taipei need is the US getting bogged down in another quagmire that saps limited resources and diverts attention from the Indo-Pacific region, its area of core strategic interest.
There are no easy answers to this crisis, and Washington has limited options to rein in Moscow. Taiwan can only watch from afar and hope that Putin steps back from the brink, while redoubling efforts to bolster its defenses against an increasingly emboldened China.
When it became clear that the world was entering a new era with a radical change in the US’ global stance in US President Donald Trump’s second term, many in Taiwan were concerned about what this meant for the nation’s defense against China. Instability and disruption are dangerous. Chaos introduces unknowns. There was a sense that the Chinese Nationalist Party (KMT) might have a point with its tendency not to trust the US. The world order is certainly changing, but concerns about the implications for Taiwan of this disruption left many blind to how the same forces might also weaken
As the new year dawns, Taiwan faces a range of external uncertainties that could impact the safety and prosperity of its people and reverberate in its politics. Here are a few key questions that could spill over into Taiwan in the year ahead. WILL THE AI BUBBLE POP? The global AI boom supported Taiwan’s significant economic expansion in 2025. Taiwan’s economy grew over 7 percent and set records for exports, imports, and trade surplus. There is a brewing debate among investors about whether the AI boom will carry forward into 2026. Skeptics warn that AI-led global equity markets are overvalued and overleveraged
Japanese Prime Minister Sanae Takaichi on Monday announced that she would dissolve parliament on Friday. Although the snap election on Feb. 8 might appear to be a domestic affair, it would have real implications for Taiwan and regional security. Whether the Takaichi-led coalition can advance a stronger security policy lies in not just gaining enough seats in parliament to pass legislation, but also in a public mandate to push forward reforms to upgrade the Japanese military. As one of Taiwan’s closest neighbors, a boost in Japan’s defense capabilities would serve as a strong deterrent to China in acting unilaterally in the
Taiwan last week finally reached a trade agreement with the US, reducing tariffs on Taiwanese goods to 15 percent, without stacking them on existing levies, from the 20 percent rate announced by US President Donald Trump’s administration in August last year. Taiwan also became the first country to secure most-favored-nation treatment for semiconductor and related suppliers under Section 232 of the US Trade Expansion Act. In return, Taiwanese chipmakers, electronics manufacturing service providers and other technology companies would invest US$250 billion in the US, while the government would provide credit guarantees of up to US$250 billion to support Taiwanese firms