The First Island Chain Doctrine
President Lai Ching-te has articulated that China’s threat extends beyond Taiwan, undermining regional peace and crossing multiple island chains Foreign Policy Research Institute. His argument positions Taiwan not merely as Beijing’s target but as a restraint on broader Chinese ambitions: if Taiwan were annexed, China would be embowered to pursue regional expansion rather than cease its activities Foreign Policy Research Institute.
This framing represents a significant departure from Taiwan’s traditional diplomatic positioning. Where previous administrations emphasized the island’s separate political identity while maintaining strategic ambiguity, Lai has used more direct language than his predecessor Tsai Ing-wen to highlight Beijing’s coercive actions and assert Taiwan’s status as a “de facto” sovereign state Crisis Group. In his New Year’s address, Lai stated that facing China’s rising expansionist ambitions, the international community is watching to see whether the Taiwanese people have the resolve to defend themselves NPR.
The strategic logic underlying Lai’s position resonates beyond rhetoric. Japan views Taiwan’s security as integral to its own and has expanded military coordination with the United States in the region Pf, while Southeast Asian governments such as the Philippines have been increasingly vocal and taken a more proactive stance in collaborating with other democratic countries in the region due to growing concern over China’s expansionism Pf.
The American Security Umbrella: Shifting Sands
The United States remains Taiwan’s most critical security guarantor, yet American commitment has grown increasingly ambiguous under President Donald Trump’s second administration. President Joe Biden sought to counter Beijing’s growing pressure on Taiwan by declaring publicly four times that the United States would come to Taiwan’s defense if attacked by China Brookings, moving toward what analysts termed “strategic clarity.” Trump, by contrast, has reverted to strategic ambiguity.
Trump’s responses to questions about defending Taiwan have included statements like “I don’t comment because I don’t ever want to put myself in that position” and “You’ll find out if it happens” Global Taiwan Institute, compounding uncertainty rather than dispelling it. The Trump administration’s National Security Strategy states that “deterring a conflict over Taiwan, ideally by preserving military overmatch, is a priority” and commits to “reinforcing U.S. and allies’ capacity to deny any attempt to seize Taiwan” IGCC, yet the document downgraded U.S. commitment by replacing “oppose” with “does not support” regarding unilateral changes to the status quo Global Taiwan Institute.
Economic considerations increasingly drive American policy. Trump has repeatedly stated that “Taiwan should pay us for defense” Atlantic Council, treating security commitments as transactional goods. The planned U.S. arms sale to Taiwan, valued at more than $11 billion, is the largest so far to Taiwan and includes missiles, drones, artillery systems and military software OPB. However, Taiwan’s domestic opposition parties have repeatedly blocked Lai’s proposed $40 billion special defense budget NPR, creating a paradox where external pressure for increased defense spending collides with internal political gridlock.
Public sentiment in Taiwan reflects this uncertainty. A Brookings Institution report found that 40.5% of respondents held a negative view of the United States, up from 24.2% in July 2024, with a 13.9 percentage point increase in those believing the United States to be an untrustworthy ally German Marshall Fund. Trump’s “reciprocal” tariffs against Taiwan are likely a major factor, with the president initially setting a 32% rate for Taiwanese products before provisionally lowering that to 20% German Marshall Fund.
The Semiconductor Shield: Economic Interdependence as Deterrence
Taiwan’s dominance in semiconductor manufacturing forms what analysts call the “Silicon Shield”—the proposition that the island’s economic indispensability deters military aggression. Taiwan’s exports of integrated circuits amounted to $184 billion in 2022, nearly 25 percent of Taiwan’s GDP, with TSMC constituting about 30 percent of the Taiwan Stock Exchange’s main index Wikipedia.
TSMC produces over 50% of the world’s advanced semiconductors, supplying critical components to tech giants like Apple, Nvidia, and AMD Wikipedia. By 2024, TSMC accounted for an estimated 64% of the global pure-play foundry market, dwarfing competitors such as Samsung, which held a 12% share Britannica. The company’s technological lead remains substantial—TSMC was the first foundry to market 7-nanometre and 5-nanometre production capabilities, and the first to commercialize extreme ultraviolet lithography technology in high volume Wikipedia.
The economic consequences of conflict over Taiwan would be catastrophic. The Institute for Economics and Peace estimates that a full-scale conflict could result in a $10 trillion loss to the global economy, with even a blockade scenario carrying a global cost of $2.7 trillion Vision of Humanity. A Chinese blockade of Taiwan would cause global economic output to decline by 2.8 per cent in the first year alone, with China’s economy shrinking by an estimated seven per cent and Taiwan’s by nearly 40 per cent Vision of Humanity.
Yet the shield’s protective capacity may be eroding. TSMC’s Arizona expansion—now projected at $165 billion representing the largest foreign direct investment in a greenfield project in American history TSMC—simultaneously strengthens American semiconductor independence and potentially diminishes Taiwan’s strategic value. In the first quarter of 2025, 77% of TSMC’s net revenue came from North America, rising from 62% in 2018 Taiwan Insight. While the company’s most advanced chips will continue to be fabricated in Taiwan Taiwan Insight, the trajectory suggests gradual geographic diversification that may weaken the deterrent effect over time.
Business motivations behind this expansion reflect both opportunity and necessity. TSMC Arizona will result in 6,000 direct, high-tech jobs in addition to tens of thousands of construction and supplier jobs TSMC, creating a semiconductor cluster that benefits from proximity to major customers and research institutions. However, the expansion also responds to American political pressure and tariff threats, demonstrating how economic coercion can reshape even the most strategically critical industries.
Singapore’s Strategic Tightrope
For Singapore, Taiwan’s security environment presents particularly acute dilemmas. The city-state maintains what observers term a “balancing act” between China and Taiwan—approximately 3,000 Singapore Armed Forces personnel are rotationally stationed in Taiwan each year under Project Starlight, a bilateral defense agreement signed in 1975 Global Taiwan Institute. This annual exercise brings Taiwan, diplomatically isolated by China, unusually close to an influential Asian country outside consular and trade affairs Defense News.
Singapore was the last Southeast Asian country to officially recognize the People’s Republic of China, establishing diplomatic relations only on 3 October 1990 Wikipedia. This delay reflected Singapore’s sustained ties with Taiwan and its desire to avoid being perceived as a “Third China” among Southeast Asian neighbors. Even after recognizing Beijing, Singapore has continued informal cooperation with Taiwan in areas such as trade, education and cultural exchanges Wikipedia.
The economic stakes of Singapore’s China relationship are substantial. In 2023, bilateral trade between China and Singapore amounted to US$108.39 billion, with Singapore being China’s largest source of new investments for 11 consecutive years since 2013 China Briefing. By the end of 2023, Singapore’s cumulative actual investment in China reached US$141.23 billion China Briefing. Singapore is China’s largest cumulative source of foreign direct investment and a key financial center for Chinese businesses looking to establish international operations Asia Times.
Yet Singapore is simultaneously exposed to Taiwan’s economic orbit. Taiwan and Singapore signed the Agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership (ASTEP) on 7 November 2013, Taiwan’s first economic partnership agreement with an ASEAN member Wikipedia. The agreement significantly reduced tariffs and anchored Taiwan within ASEAN’s trade architecture.
Taiwan’s security deterioration would directly threaten Singapore’s interests. A Chinese blockade would disrupt as much as one-fifth of global maritime trade through the Taiwan Strait and severely cripple Singapore’s port traffic Asia Times. The roughly 3,000 Singaporean troops stationed in Taiwan represent both a deterrent against surprise attack and a potential tripwire—any attack on Singaporean installations or personnel in Taiwan would give the U.S. compelling justification to intervene Asia Times.
Beijing’s tolerance of Singapore’s Taiwan ties has worn thin. In November 2016, nine Singapore Army Terrex armoured personnel carriers were seized by Hong Kong Customs while being shipped back from Taiwan after a military exercise Wikipedia. The incident, which was allegedly manufactured by China to protest against the Singaporean Army’s use of Taiwan for training against the backdrop of worsening ties Wikipedia, demonstrated Beijing’s willingness to use coercive measures.
Following diplomatic disputes, Singapore has become increasingly wary of taking stands that could offend Beijing, avoiding naming those responsible for cyberattacks, disinformation campaigns, and influence operations that likely involved the PRC The News Lens International. In November 2021, Defence Minister Ng Eng Hen acknowledged Taiwan’s political status as a highly sensitive issue for China, warning of grave consequences of any military conflict and stating Singapore should “stay very far away from that” Wikipedia.
However, complete acquiescence carries risks. Singapore is less dependent on China economically than Taiwan or Hong Kong, with huge national reserves estimated at more than Singapore $1 trillion—a substantial war chest which can tide over economic pressure from any great powers Taylor & Francis Online. The city-state’s trade is global and diversified, reducing vulnerability to Chinese economic coercion compared to more concentrated trade relationships.
The structural challenge for Singapore lies in its economic integration with both powers. A 1 percentage point decline in Chinese domestic growth is expected to reduce trend growth in ASEAN countries cumulatively by about 1 percentage point over five years, with estimates implying a cumulative impact of 2.1 percentage points for Singapore specifically IMF eLibrary, given its dependence on Chinese final demand. In Taiwan, Vietnam, Malaysia, and Singapore, the weight of trade with China on the country’s GDP exceeds 20% Taylor & Francis Online, illustrating deep economic interdependence.
Implications for Regional Security Architecture
President Lai’s regional security argument finds resonance because it articulates what many Indo-Pacific nations privately recognize: Taiwan’s fate affects the broader balance of power. If Beijing successfully absorbs Taiwan through force or coercion, it would not simply resolve a historical grievance but would demonstrate that China can alter borders through military pressure despite international opposition. The precedent would reverberate through disputes in the South China Sea, along the Sino-Indian border, and potentially regarding the Senkaku/Diaoyu Islands.
For Singapore, the optimal outcome remains indefinite preservation of the status quo—neither Chinese annexation nor formal Taiwanese independence, but continued de facto separation under strategic ambiguity. Singapore consistently maintains a “One China” policy and opposes independence for Taiwan, a fundamental position held even before establishing diplomatic relations with the PRC Ministry of Foreign Affairs Singapore. Singapore has not allowed and will not allow itself to be used to further the cause of Taiwanese independence Ministry of Foreign Affairs Singapore.
Yet the status quo grows increasingly unstable. One year into his term, President Lai has staked out a tougher position against Beijing than his predecessor took, and the Chinese leadership clearly distrusts him Crisis Group. China’s leader Xi Jinping called Taiwan’s eventual annexation “unstoppable” during his televised New Year’s address OPB, while Lai announced a special $40 billion budget for arms purchases over eight years, from 2026 to 2033, after pledging to raise defense spending to 5% of GDP NPR.
The trajectory suggests heightened tensions rather than resolution. For Singapore and other Southeast Asian nations, the challenge will be navigating between economic dependence on China and security ties with the United States and its allies, while avoiding entrapment in a conflict between great powers. President Lai’s framing of Taiwan’s security as a regional issue rather than a bilateral dispute accurately reflects the interconnected nature of Indo-Pacific security—but acknowledgment of this reality does not resolve the fundamental dilemma facing smaller nations caught between competing giants.
The semiconductor industry’s role adds complexity. While Taiwan’s technological dominance theoretically deters conflict, it simultaneously makes the island a more attractive target and incentivizes geographic diversification that may ultimately erode the deterrent. For Singapore, which has sought unsuccessfully to replicate Taiwan’s semiconductor success, the industry represents both a model and a competitor, further complicating the strategic calculus.
Ultimately, Singapore’s position reflects the broader predicament of middle powers in a contested region: the desire to maintain profitable economic relationships with all parties while avoiding entanglement in their conflicts, the need to preserve freedom of action without appearing to take sides, and the recognition that remaining neutral may become increasingly untenable as tensions escalate. President Lai’s regional security argument resonates because it articulates this uncomfortable reality—Taiwan’s fate will not be contained to Taiwan, and those who depend on regional stability must consider how to respond before that stability disappears.