TW · Administration · TSMC ecosystem · Asia-Pacific
Taiwan
Limited room for manoeuvre · updated 13 September 2026
What they did
Announced a record defence budget of 1 trillion New Taiwan dollars for 2027 and responded to Chinese air and naval activity with patrol aircraft, ships and coastal missiles.
Why
China's continuing grey-zone pressure (21 aircraft and 15 ships on 6–7 September) and the stalled 14 billion dollar US arms sale.
What they must do
It must avoid becoming a bargaining item at the 24 September Trump–Xi summit, resolve the arms sale and protect its US tariff exemption via TSMC.
What comes next
The outcome of the Trump–Xi summit and the details of the second phase of US chip tariffs.
Preference
Clarity on the US security commitment and continued arms deliveries.
Observed behaviour
A stance that increases defence spending and uses semiconductor capacity as diplomatic leverage.
Sources
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