The US dictates EU policy on Taiwan

It was a pleasure to be interviewed by Sonja Van den Ende, a fellow writer for Strategic Culture. Her probing questions set my train of thought in motion.

Link to Part 1 of our conversation

https://lauraruggeri.substack.com/p/is-natos-indo-pacific-strategy-in

2. “The EU takes a positive view of its cooperation with Taiwan as a vibrant democracy that respects human rights and shares the same values as the EU. The growing cooperation and dialogue between the EU and Taiwan on a wide range of issues is in line with the EU’s interests and values. The EU is concerned about peace and stability in the Taiwan Strait region and opposes any unilateral action to change the status quo, in particular through force or coercion. The EU supports Taiwan’s meaningful participation in international organizations, including the World Health Organization, the International Civil Aviation Organization, INTERPOL and the United Nations Framework Convention on Climate Change. The European Parliament has also adopted resolutions reaffirming its support for Taiwan in the international arena and calling on the EU and its member states to support Taiwan’s participation in relevant international organizations. Taiwan is an important economic and strategic partner for the EU, especially in the semiconductor and high-tech product supply chains. The EU is the largest source of foreign direct investment (FDI) in Taiwan and Taiwan is one of the EU’s key trading partners in Asia. The European Parliament adopted a resolution on EU-Taiwan political relations and cooperation, calling for a strengthening of political relations with Taiwan and seeking a comprehensive and enhanced partnership with Taiwan.”

Could you please tell us what you think about the following issues now you have read all these positive stands from Europe on Taiwan:

First of all, I would like to point out that the position of EU institutions with regards to the Taiwan issue tends to be more ideological and extremist than that of individual European states, the vast majority of which are not keen to rock the diplomatic boat with Beijing. They tread a delicate line and try to keep their cooperation with Taiwan under the radar.

Nevertheless, in recent years Taiwanese authorities and their US handlers have been challenging the One-China principle. They are actively pushing a revisionist interpretation of Resolution 2758, adopted by the UN General Assembly in 1971, and seek Taiwan’s accession to international organizations as a separate country.

Following Washington’s cue, both the UK and the EU Parliament passed a motion stating that UN Resolution 2758 does not have any bearing on Taiwan’s participation in the UN or other international organizations.

EU parliament members were egged on by a UK-based anti-China lobby known as IPAC, a cross-party alliance of parliamentarians which is very well funded and organized. Set up in 2020 to agitate against the Chinese government, IPAC includes lawmakers from all EU countries and is funded by the US government through the National Endowment for Democracy (NED), by NED-collaborator the Taiwan Foundation for Democracy (TFD) and by Soros’ Open Society Foundations.

IPAC mission is to demonize China and damage Sino-European relations. Its influence doesn’t spare any EU country — if you take a look at the list of its members you can see that these politicians play an active role both in the European parliament and in national parliaments.

Some EU member states have not only been testing Beijing’s red lines, they have actually crossed them.

The most egregious example of a country that closely coordinated its actions with the US to provoke Beijing is Lithuania. In 2021, the Lithuanian parliament passed a legislative revision that gave the green light to the country to open a representative office in Taiwan, ignoring China’s strong protests, and allowed Taipei to set up a de facto embassy in Vilnius, the “Taiwanese Representative Office”. The naming of this office was notable for its use of “Taiwan” in the title, in breach of the One China principle. If they had called it the “Taipei Representative Office” Beijing wouldn’t have objected and bilateral relations wouldn’t have been affected.

But that was the whole point of this charade orchestrated by the US to provoke a diplomatic incident. The US hoped that it would deal a blow to China-EU relations. As expected, in response to this provocation Beijing recalled the ambassador from Vilnius, expelled the Lithuanian ambassador and imposed trade restrictions against the Baltic country, which prompted Brussels to launch a dispute against China at the World Trade Organization. That dispute has now been suspended but it’s a textbook case of how the US uses its European pawns against European interests.

The US is also eyeing Taiwan for the production of drones and has been instrumental in fostering cooperation over drone technology between Taiwan, Lithuania, Latvia and Poland.

Cooperation with Taiwan in the military field is directed against both China and Russia. In November Taiwan’s Lin Chia-lung, in charge of Foreign Affairs, led a delegation of representatives from 20 Taiwanese drone companies to Lithuania where they attended a forum on drone technologies and signed two agreements as part of Taiwan’s efforts to expand its domestic drone manufacturing industry. Another MoU was signed with the Latvian Federation of Defence and Security Industries in Riga and with the Polish-Taiwanese Chamber of Commerce and Industry.

The risk of alienating the People’s Republic of China (1.4 billion people) to please Taiwan (23 mil.) is one that only governments controlled by Washington would consider taking.

3. In what areas do you most value Taiwan’s cooperation with the EU?

With a relatively small domestic consumer base of 23 million people, Taiwan’s export has long powered its economy, its trade-to-GDP ratio was 114% in 2024. The main Taiwanese export items to the EU are integrated circuits and electronic components; most of Europe’s semiconductor chip supply originates from Taiwan.

So far trade between European countries and Taiwan has not been particularly controversial, but within the context of the hybrid war that the US has launched against China, it is increasingly being weaponized to create a rift between Europe and Beijing, which is Washington‘s plan.

As i mentioned earlier, to get an idea of how this plan is being implemented, it is useful to look not only at the import duties imposed by the EU on Chinese electric vehicles, but also at the steps taken by the Baltic states, a testing ground for anti-Russia and anti-China policies.

While European states do not have a formal military commitment to Taiwan akin to the Taiwan Relations Act in the United States, they are nonetheless likely to come under more pressure from Washington at the cost of their mutually beneficial relations with China.

In the high tech sector the US wants the EU to strengthen cooperation with its proxy and decouple from China. We see a trend to secure supply chains in case of a military confrontation around Taiwan. I don’t think the risk is imminent, but it’s still worth noting that Elon Musk’s SpaceX asked Taiwanese suppliers to transfer manufacturing of satellite components outside Taiwan due to “geopolitical risks.”

Starlink suppliers such as China-Moon Industrial have confirmed SpaceX’s request to move production from Taiwan to Thailand. Another partner, Wistron NeWeb, has already started manufacturing Starlink components in Vietnam and plans to expand production.

Warren Buffett decided to sell most of Berkshire Hathaway’s shares in TSMC, citing geopolitical tensions.

Multinational corporations are redoubling efforts to find manufacturing sites outside Taiwan, while investors that are already in Taiwan are taking a “wait-and-see” stance, evaluating new delivery routes, diverting capital for new production or withdrawing funds from Taiwan.

Taiwan Semiconductor Manufacturing Co (TSMC) the world’s biggest chipmaker, is setting up new sites in the United States, Japan, Germany, and is already planning more factories in Europe with a focus on the market for artificial intelligence (AI) chips.

Its first European plant in Dresden, Germany, is a joint venture, with TSMC holding 70 percent and three European partners, Germany’s Infineon and Bosch and Dutch NXP, the remaining 30 percent. The project got €5 billion in German subsidies!

In an effort to contain China’s technological development the US also persuaded European policy makers to apply export restrictions to the high tech sector. For example, ASML, a Dutch maker of semiconductor production equipment was forced to suspend the export to China of EUV lithography machines. The U.S. ordered Taiwan Semiconductor Manufacturing (TSMC) to halt shipments of advanced chips to Chinese customers. We are talking about sophisticated chips, of 7 nanometer or more advanced designs, that power AI accelerator and graphics processing units used in artificial intelligence applications.

Some EU member countries are trying to revise the list of critical technologies that European Commission President Ursula von der Leyen wants to be subject to foreign direct investment (FDI) screening, namely artificial intelligence, semiconductors, quantum technologies, energy technologies, space, drones or critical medicines. The screening requirement was one of the measures that the anti-China lobby had pushed through under the “de-risking” strategy.

According to a compromise text prepared by Hungary, which currently chairs the intergovernmental arm of the EU, the revised list no longer includes semiconductors, artificial intelligence or other strategic technologies. It appears that some EU countries are wary of overreach by the Commission into their national competence and demand more control over what investments warrant screening.

4. What are the differences between the UK, the US and the EU on the Taiwan issue?

Their official position is the same. The US, UK and the EU have adopted a revisionist policy vis-à-vis Resolution 2758 and seek Taiwan’s accession to international organizations as a separate country, which is part of the West’s salami-slicing approach to dilute the One China policy. Beijing has repeatedly denounced these underhand tactics but rather than reacting to the provocation in a linear, symmetrical fashion, has focused on strengthening its relations with those European countries that eschew confrontation and pursue a more pragmatic course. EU-China relations are still nuanced despite Brussels attempts to impose its consensus, and individual priorities can be created by bilateral interactions.

5. What is the perception of the growing trade dispute between the EU and the People’s Republic of China?

Obviously it is not in Europe’s interest to provoke China, but the EU approach to the Ukrainian conflict has demostrated that Brussels has no strategic autonomy. It can’t be trusted to protect European interests because its raison d’être is to bolster US hegemony and advance American interests, originally in Europe, then in Eurasia and more recently in the Asia-Pacific.

Any exacerbation of tensions between the US and China over Taiwan or other areas of the Asia-Pacific is bound to have a devastating economic impact on EU countries. As in the case of European relations with Russia, we can’t expect rationality and economic interests to guide the EU policy. Its political elites have been selected and groomed to bat for the Anglo-American team.

In 2021, China overtook the United States to become the European Union’s largest trading partner. China is the biggest source of EU imports but the US is hellbent to rock the boat. Just look at what happened in Germany. After years of China being Germany’s main trading partner, in 2024 the US surpassed China. That’s what the US pressure on EU countries to decouple from China achieved. The EU urged companies to “de-risk” from China through friend-shoring supply chains and slapping higher tariffs on EVs imports from China, but it cannot be done without hurting the European economy.

I think we should look at what the US wants to achieve in Europe besides full control of its vassal states. I don’t think Washington intends to kill the European goose since it needs its golden eggs. Due to US-EU trade and security relations, the US too would be hurt if the European economy collapsed, so i expect a gradualist approach. Rather than a full blown trade war with China that risks turning a sick Europe into a terminal patient, we will witness a continuation of the current low intensity one. The US can’t oust Chinese goods from the markets of its satellites and replace them with its own for the simple reason that the US itself depends on Chinese goods.

Sure, it would like to increase its market share in Europe at the expense of China, but hasn’t got the industrial capacity to do so. It will ramp up the “China-threat” rhetoric to justify the imposition of export controls, tariffs and sanctions, and will put more pressure on European companies not to invest in China, or to divest from China. The US and some of its allies are benefitting from this diversion of investments away from China, but they can’t replace China’s manufacturing capabilities, advanced infrastructure, skilled labour and supply chain efficiency.

Washington is engaging in a full spectrum hybrid war against Beijing and attempts to slow down China’s technological development through export restrictions are part of its strategy. In my opinion their effectiveness is limited to the immediate present, and like sanctions against Russia, they are bound to backfire. Export restrictions are actually a spur for China to ramp up investment in the semiconductor industry. As a matter of fact, Beijing announced plans to set up its largest-ever semiconductor state investment fund worth $47.5 billion with six of the country’s largest state-owned banks, including ICBC and China Construction Bank.

https://devend.online/2024/12/03/how-will-the-relationship-with-china-nato-and-the-new-us-administration-develop-an-interview-with-laura-ruggeri-part-ii/