Flashpoint Taiwan: What if America does nothing?

Few geopolitical flashpoints have the potential to bring about the beginning of the Third World War and risking civilisation itself quite like a potential confrontation over Taiwan.

For Beijing, the breakaway renegade island democracy is a powerful and humiliating reminder of the rising superpower’s troubled and “embarrassing” history during the 19th and early-20th century where it was the playground of foreign empires eager to exploit the wealth and prestige of the East, eventually culminating in the victory of Mao’s Revolution in 1949.

The survival and expulsion of Chinese Nationalist leader Chiang Kai-shek’s routed forces to the island of Taiwan, under the protection of the United States, is the last embarrassing slap in the face for the Middle Kingdom following the end of the “Century of Humiliation”.

Meanwhile, for the United States, the enduring support for the self-governing Taiwanese people stands out as one of the last remaining ideological battlegrounds of the Cold War between Marxist Communism and Liberal Democracy and, in many ways, marks a moment of recognition by the United States that even it has limitations.

For many across the region and more broadly across the globe, the calculations associated with a potential conflict over Taiwan are rapidly revealing to leaders in capital cities across the world that the costs may indeed be too great to bear.

Yet equally, many leaders have raised concerns that the costs of not responding could establish a dangerous precedent emboldening Chinese President Xi and other authoritarian leaders across the globe, harkening back to the example of the 1938 Munich Peace Conference, just a year before Germany’s invasion of Poland ignited the Second World War.

Australia hasn’t escaped this geopolitical calculus, with many raising concerns about the nation’s preparedness to face the potential of conflict and the ensuing fallout in our region, yet one question also has to be asked: What happens if America does nothing in the event of a Chinese invasion of Taiwan?

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To answer this important question, let’s engage in a multifaceted thought experiment.

Is Sydney, LA, Honolulu or San Francisco worth Taipei?

It is safe to assume that any conflict over Taiwan will rapidly escalate and come to encompass all corners of the Pacific, with the interdependent and interconnected, symbiotic and globalised nature of the world economy well and truly working against us (think the protectionism we experienced during COVID-19 on steroids).

Ultimately, this would bring much of the global economy to a standstill as critical industrial components like microprocessors, as well as other high-technology components, processed rare earth elements, and liquid fuel would be stopped dead in their tracks.

Highlighting this is Jenny Leonard, Maeva Cousin, Jennifer Welch, Gerard DiPippo, and Tom Orlick writing for The Japan Times, who stated, “War over Taiwan would have a cost in blood and treasure so vast that even those unhappiest with the status quo have reason not to risk it. Bloomberg Economics estimate the price tag at around US$10 trillion (AU$14.8 trillion), equal to about 10 per cent of global gross domestic product – dwarfing the blow from the war in Ukraine, COVID-19 pandemic and 2007-08 Global Financial Crisis...

“For the main protagonists, other major economies, and the world as a whole, the biggest hit comes from the missing semiconductors. Factory lines producing laptops, tablets and smartphones – where Taiwan’s high-end chips are the irreplaceable ‘golden screw’ – would stall. Autos and other sectors that use lower-end chips would also take a significant hit,” the group explained further.

Where this potential conflict becomes truly troublesome is the rate of escalation and expansion beyond the immediate confines of the western Pacific to not only involve other major powers like Japan, South Korea, India and Russia, but to also, open up a front few could have predicted: the home front.

With this in mind, it would be hubris to assume or believe that any potential conflict over Taiwan wouldn’t expand to involve both the American and Australian mainlands as the ultimate bargaining chip.

Importantly, for both the American and Australian populace being in the firing line of a peer, great power competitor would come as an immediate and unfamiliar shock, with our respective geographic isolation no longer shielding us from the harsh realities of a truly kinetic conflict.

Now while such a strike would signal a major escalation, it is a powerful deterrent that could be used against us and one that should be factored into our calculations in the event of any confrontation over Taiwan. Simply put, we have to ask ourselves, is Sydney, LA, Honolulu or San Francisco a worthy trade for continued democracy in Taiwan?

Equally and perhaps most importantly, we must ask ourselves with the divided, polarised state of domestic politics and society both here in Australia and in the United States, how would the public respond to such a direct attack, would they unite and fight back or would they sue for peace?

What does it mean if America does nothing?

Now yes, this thought experiment is based on a kinetic strike on either or both the American and Australian mainland which doesn’t rule out an overwhelming cyber or electronic warfare attack that would equally reduce modern society to a state similar to the early-1900s.

Either of those options would be an unbelievable culture shock to both government and the civilian populations, respectively, and while one could argue a cyber or electronic warfare strike would have “less” impact (at least in the traditional sense), the real-world implications cannot be understated.

Try to imagine the sociopolitical fallout if a city the size of Sydney or Los Angeles was suddenly without electricity for not just a couple of days, but months, meaning basic infrastructure and services didn’t work, you couldn’t buy food or access cash (although odds are that it wouldn’t be worth anything), equally likely is water and gas would also stop flowing and cars wouldn’t work.

Emergency generators at hospitals, police stations and the like would equally be impacted, resulting in numerous casualties and a panic-induced breakdown in the very fabric of law and order on our suburban and city streets.

Now yes, martial law could be introduced and enforced (at least to some degree) but in the midst of a conflict with a great power peer competitor, it isn’t the most efficient or advisable use of finite manpower when the threat of conflict in the region directly threatens the domestic war effort and any potential for post-war prosperity.

Such a reality only becomes more complex when we account for the recent demonstrations against the Gaza conflict both in America and Australia that add an additional element of ethno-religious animosity, coupled with historic enmity towards the United States and the West more broadly, further complicating a national response.

Regardless of which party occupies the White House, it is easy to see either side caving to mounting political and media pressure, coupled with additional domestic costs not to directly intervene with dwindling American “blood and treasure” for no perceivable gain or benefit to the American people, economy or strategic position.

So for Australian policymakers, it becomes increasingly important that they, at least, consider that even a kinetic attack on the mainland United States or Australia may not automatically result in American involvement, particularly if both civilian populations are in the midst of unrest.

Final thoughts

Australians are going to be asked to accept a number of uncomfortable realities the in coming years. First and foremost, we will have to accept that while the world is increasingly becoming “multipolar”, the Indo-Pacific, in particular, is rapidly becoming the most hotly contested region in the world.

Second, both the Australian public and our policymakers will have to accept that without a period of considered effort, investment and reform, or as I like to colloquially refer to it, our Rocky montage moment, current and future generations of Australians will be increasingly impoverished, living in a nation pushed around by the region’s now rising powers.

Recognising this array of challenges and opportunities, both the Australian public and its policymakers need to look beyond the myopic lens of short-termism that has traditionally dominated our diplomatic, strategic, and economic policy making since Federation.

Ultimately, we need to see Australia begin to play the long game to fully capitalise on the opportunities transforming the Indo-Pacific.

The most important questions now become, when will we see a more detailed analysis and response to the challenges and opportunities facing Australia and when will we see both a narrative and strategy that better helps industry and the Australian public understand the challenges faced and opportunities we have presented before us?

As events continue to unfold throughout the region and China continues to throw its economic, political, and strategic weight around, can Australia afford to remain a secondary power, or does it need to embrace a larger, more independent role in an era of increasing great power competition?

Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch at This email address is being protected from spambots. You need JavaScript enabled to view it. or at This email address is being protected from spambots. You need JavaScript enabled to view it..