Ambrose Evans-Pritchard
If Donald Trump’s war against Iran is really about the containment of China, it is surely the most dangerous double-edged gamble in living memory.
The surge in oil, gas, aluminium and fertiliser prices have bailed out Vladimir Putin just as he faces the worst funding crisis since the invasion of Ukraine.
Trump talks airily about a naval convoy to protect global shipping and reopen the Strait of Hormuz but no such operation is close to existing. It violates a US law that forbids naval escort of foreign-flagged ships. Lloyds List reports that shipowners and insurers do not think it plausible.
US intelligence officials say China’s Xi Jinping has told the People’s Liberation Army (PLA) to be ready for an invasion of Taiwan by 2027.
That was before America blew through so much of its military arsenal in the Middle East. Trump exhausted a quarter of the Pentagon’s entire arsenal of THAAD missiles in a matter of days bombing Iran’s nuclear site last June.
Yun Sun, China director at the Stimson Centre, sees a high risk that Xi will move this year to take control over Taiwan – and with it 90 per cent of the world’s industry for advanced semiconductors – calculating that there will never again be such a chance.
“There is a window of opportunity,” she said.
Nvidia may be the global leader in AI computing but it does not make its own chips. It is a “fabless” design company that outsources the manufacturing to the Taiwan Semiconductor Manufacturing Company (TSMC) at foundries on silicon island.
TSMC began to produce Nvidia’s top-tier Blackwell chips – denied to China under US trade controls – at a new foundry in Arizona in October but they are still sent to Taiwan for the final stage of complex “packaging”.
Amkor Technology aims to start packaging Nvidia chips on US soil from 2028. A clutch of new semiconductor “fabs” are being built in the US – thanks to Joe Biden’s $US280 billion ($398 billion) Chips Act – but this will take time to ramp up.
The US supply-chain for AI and advanced computing is today at the point of maximum vulnerability. This dependence on Taiwan will diminish every year from now on. If China can gain a stranglehold over Taiwan’s chip industry right now it will dethrone the US tech industry, gain immense leverage over the West and drastically alter the global balance of power.
Hawks in Washington are pursuing the mirror-image strategy of trying to squeeze the supply lines for China’s oil and gas. But this could backfire even if the Iran mission is a “success”.
We can be certain that PLA bean-counters are totting up the rapid depletion of American Patriot and THAAD interceptors, Tomahawk missiles, SM-2, SM-3, and SM-6 ship-launched missiles, and kit across the spectrum.
“There is a lot of talk that Taiwan will be vulnerable and we won’t have adequate supplies of missiles and precision-guided weapons. I think there is an element of risk there,” said John Bolton, the US national security adviser in Trump’s first term.
The danger is that Beijing calculates that the US is too distracted or too stretched to respond. “If they reach that conclusion, then I think Taiwan is at risk,” Bolton told the One Decision podcast, presented by Kate McCann and Sir Richard Dearlove, ex-head of MI6.
“It’s our own fault. We should have ramped up production years ago. Trump has recognised that with a proposal for a huge budget increase, a $US500 billion increase next year, and a lot is going to have to go replenishing and expanding our stockpiles,” said Bolton.
What that suggests to me is that China has better odds making its move on Taiwan before the US rearms.
The Chinese can see that two US aircraft carrier battle groups are deployed in Mid-East combat operations, and that the weary crew of the USS Gerald R Ford, veterans of Venezuela, will soon break the all-time record for carrier deployment at sea. Aircraft carriers suffer serious corrosion after that long in humidity and salt water.
The Chinese know that the US can deploy only three or four of these battle groups at any one time because the rest are in dry dock or undergoing complex overhauls.
Global stock markets may have been reassured by Pete Hegseth, the chest-thumping secretary of war, but Trumpian bravado of invincible US military power is as much bluff as reality.
The US navy has shrunk to just 290 warships worldwide. It is far short of the statutory minimum of 355, yet alone the desired target of 500.
Call me old-fashioned, but I was a Washington journalist during the glory days of Ronald Reagan’s “600-ship navy”, and he was careful how he used it.
The Chinese navy is larger today, which is why so much of the rising US Pentagon budget is going into catching up on warships. The Chinese fleet is not dispersed. It is concentrated for the one elemental purpose of conflict in the western Pacific.
Trump said Biden had “emptied our warehouses of all of our munitions”. If so, the warehouses are even emptier now.
The US does not have the production lines to offset the rate of attrition over the last year in the Gulf, in the Red Sea, and defending Israel. China has a global lock on gallium, the rare earth needed to make many of these weapons systems. It has banned sales to the US weapons industry. It has “dual use” restrictions on over 20 critical minerals.
Bolton said China will not take the military risk of an amphibious invasion. “They don’t want to see the productive capabilities in Taiwan destroyed. So I think what they will do, through some political pretext, is to throw a blockade around Taiwan and see if we move to break it,” he said.
The fear in Taiwan is that Trump will be outplayed by Xi Jinping on his visit to Beijing next month and will sacrifice the island in exchange for a make-believe grand bargain.
He has already stunned the Taiwanese by stating that the fate of the island is “up to Xi”, which takes the US doctrine of strategic ambiguity into perilous territory.
The Stimson Center’s Yun Sun said Trump’s willingness to feed allies to the wolves is another reason for China to act soon. “Whoever is the next president, whether Republican or Democrat, this level of indifference is going to disappear,” she said.
You cannot pick off Iran without a chain of consequences elsewhere.
Furthermore, she said Beijing suspects that Trump may try to engineer a global crisis in order to justify suspending the electoral process in 2028 and retaining power, making it more likely that he would risk a war in the Pacific two years hence.
China’s pitch to the Taiwanese people is that unification is unstoppable, resistance is futile and the US betrays allies without compunction. What Trump seems not to understand is that the Kuomintang, which controls Taiwan’s parliament, is leaning into this view.
“Could it be that the US is treating Taiwan as a chess piece, a pawn?” said the party’s new leader, Cheng Li-wun.
She aims to draw the island back into China’s orbit. “I don’t believe that time is on Taiwan’s side. The rapid rise of mainland China means that its national strength is incomparable to what it was just four years ago,” she said recently.
What may bring this to head is that Trump has imposed extortion terms as the condition for a trade deal with Taiwan – all too like the “unequal treaties” imposed on China in the 19th Century – and is demanding that much of the island’s chip industry relocate to US soil. The Kuomintang wants a “chip national security act” to block technology exports.
Would Taiwan fold without a shot being fired if China imposed a blockade, and if the US did not respond immediately and with massive force? It is an open question.
We are already in a shadow Third World War, one that pits the axis of autocracies against the disintegrating West. You cannot pick off Iran without a chain of consequences elsewhere. The other side has a vote too.
