EXCLUSIVE: Taiwan’s chip deal with Washington just got the Beijing treatment

Last week, Taiwan and the United States wrapped a headline-friendly trade deal: tariffs on most Taiwanese goods down to 15%, and a giant investment push to expand chip, AI, and energy production on US soil. Washington calls it resilience. Taipei calls it a “democratic” supply chain. Beijing calls it a hollowing-out operation.

On Wednesday, China’s Taiwan Affairs Office spokesperson Peng Qingen said the deal would “only drain Taiwan’s economic interests,” accusing Taiwan’s ruling Democratic Progressive Party of letting the US “hollow out” the island’s key industry. The criticism wasn’t subtle: in Beijing’s framing, Taiwan is paying with its industrial core to buy political cover in Washington.

That storyline has obvious advantages for China. It paints the US as the extractor, Taiwan as the mark, and the DPP as the facilitator. It also fits Beijing’s broader claim that Washington is “using Taiwan to contain China”: a line Chinese officials have repeated for years, now repackaged for a trade-and-chips era.

But China’s critique lands in a moment when economics and security are fusing so tightly that it’s hard to separate genuine industrial risk from geopolitical messaging. The agreement is not just about tariffs; it’s about where the most valuable factories on earth sit, who controls the tools and know-how, and how far the US will go to reduce its dependence on a place China claims as its own.

That’s why Beijing’s criticism of the trade deal is traveling alongside its familiar rage at US arms sales to Taiwan. In China’s view, both are versions of the same move: tighten Taipei’s linkage to Washington, and you tighten the strategic knot around Beijing.

From a legal standpoint, though, China is arguing uphill.

Michael Swaine, a prominent American political scientist, told the Wyoming Star that Beijing’s claim that US arms sales “fundamentally alter the status quo” doesn’t really work if you’re using international law as your yardstick.

“From the standpoint of international law, US arms sales to Taiwan don’t violate any laws, since the United States does not formally recognize Taiwan as a part of China. Since after the Korean War, at least, it has taken the stance that the status of Taiwan remains undetermined,” Swaine said.

That “undetermined” posture wasn’t an accident, he notes.

“That stance was purposefully taken so that the US could provide military assistance to the island without giving the impression that it was violating Chinese sovereignty by selling arms to Taiwan.”

Beijing, of course, sees a different set of promises on the table. Swaine lays out the core Chinese argument:

“The Chinese see it differently, claiming that during the normalization era, Washington pledged that it accepted China’s claim to Taiwan and also pledged that it would reduce its arms sales to Taiwan over time. And so, every time the US sells arms to Taiwan, the Chinese protest that such a move violates agreements reached during normalization and makes the Taiwan Strait area more dangerous.”

This is basically the dispute in miniature: the US leans on ambiguity and domestic law, China leans on normalization-era language and sovereignty, and Taiwan gets treated like both a partner and a pawn depending on who’s speaking.

Then there’s the part everyone avoids saying out loud: even if you decide one side is “right” legally, the security dynamics can still be a mess.

“From a security standpoint, both US arms sales to Taiwan and China’s growing military capabilities around Taiwan destabilize the situation,” Swaine said. “Both sides are to blame by putting military deterrence ahead of diplomatic reassurance.”

That’s the uncomfortable truth sitting underneath the slogans. Deterrence can stop war, but it also builds the kind of hair-trigger environment where a crisis can start by accident, misunderstanding, or political panic.

Swaine is blunt about the double-edged nature of weapons transfers: “

US arms transfers both deter and provoke China. They make it more difficult for China to employ force against Taiwan, but they also, in the context of growing Sino-US security competition and zero-sum rivalry, certainly increase the risk of a crisis through miscalculation and escalation, especially given the fact that China increases its own military capabilities relevant to Taiwan, partly in response to US arms assistance to Taiwan.”

In other words: deterrence works until it doesn’t, and both sides are feeding a loop that doesn’t naturally stop.

“Without adequate political reassurances on both sides, these arms sales and Chinese military deployment just feed an open-ended arms race across the Taiwan Strait, thus increasing the chance of a future crisis,” Swaine warned.

So where does that leave the bigger question: can the old US policy of strategic ambiguity still hold?

Swaine argues it’s still the least bad option right now.

“Under current circumstances, strategic ambiguity is the only viable US strategy toward Taiwan for several reasons,” he said, warning that sudden “strategic clarity” could trigger the very outcomes Washington says it wants to avoid: panicked allies, emboldened Taiwanese moves toward independence, or a Chinese decision to strike before new realities harden.

But he’s not romantic about ambiguity either. If current trends keep running, deeper US-China hostility, Taiwan’s growing resistance to political absorption, and China’s rising military capacity, then the ambiguity that once stabilized things may start to do the opposite.

“Those same trends, if not altered over the long term, will make ambiguity increasingly dangerous, and difficult to maintain,” he said, arguing they will “likely produce a heightened chance of a crisis,” with both sides operating on worst-case assumptions.

This is where the trade deal matters beyond economics. When Washington talks about moving a big chunk of Taiwan’s chip supply chain into the US, it’s not just industrial policy, it’s an attempt to reduce strategic vulnerability. When Beijing says the deal “drains” Taiwan, it’s not just nationalist outrage, it’s fear that Taiwan is being pulled further out of China’s orbit in ways that become harder to reverse without force.

And Swaine’s final provocation is the one US officials prefer to dodge in public: what is Taiwan worth, in the end?

“All of this suggests that it is time for Americans to seriously consider how vital an interest Taiwan is to the US — is it worth risking a major war with a major nuclear and conventional power over?” he said.

He then floats an idea that would sound heretical in much of Washington: a form of clarity designed to take a US-China war off the table.

“If such improvements are unlikely, is it best for the US to conclude that Taiwan should be defended in every way short of contemplating a direct military clash with Beijing? In other words, might we need a form of strategic clarity that takes a Sino-US war off the table? I believe that is the only option over the long term if current trends cannot be altered in positive way.”

That’s not a comfortable conclusion for anyone. Taipei wants reassurance, not distance. Washington wants leverage, not retreat. Beijing wants control, not drift.