Why tensions between China and Taiwan are rising

In May, President Joe Biden issued a stern warning to China: The United States would come to the defense of Taiwan militarily if China were to invade.

“That’s the commitment we’ve made,” Biden said in response to a question about the United States’ intention to protect Taiwan. “We agree with the ‘One China’ policy. We have signed it.”

Although the White House was quick to assert that the president’s comments did not reflect a change in policy, his remarks came at a time of heightened concern over China’s interest in invading Taiwan following the invasion of Taiwan. Ukraine by Russia.

Biden’s warning stands in contrast to the United States’ longstanding stance of “strategic ambiguity” when it comes to Taiwan. That policy is unclear whether the United States would come to Taiwan’s defense if China were to invade, the Brookings Institution’s Michael O’Hanlon told CNBC in an interview.

Any potential action could impact the global supply chain. Taiwan has positioned itself as the go-to supplier of semiconductors found in thousands of electronic devices, from the iPhone to critical military equipment. But the global reliance on Taiwan for essential chips has come under scrutiny amid global shortages.

Taiwan accounts for 64% of the total chip foundry market, according to TrendForce data. Taiwan Semiconductor Manufacturing Company, or TSMC, accounted for 53% of total foundry revenue in 2021, according to TrendForce.

“I think for older generations, they might remember a Taiwan that produced cheap toys,” Rupert Hammond-Chambers, president of the US-Taiwan Business Council, said in an interview with CNBC. “That, however, has really changed.”

Watch the video above to learn more about why China-Taiwan tensions are rising, the importance Taiwan plays in the global supply chain, and what experts think about China’s increased aggression. China against its neighboring island.

cnbc Business

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