Can the EU deter China from invading Taiwan?

Amid growing cross-Strait tensions and an upcoming change in the US leadership, the EU finds itself unable to make a substantial contribution to deterring China from invading Taiwan.

Key takeaways:

In July, Ursula von der Leyen, President of the European Commission, pledged before the European Parliament to work toward deterring China from invading Taiwan as part of her bid for a second term. According to US intelligence sources, Chinese President Xi Jinping has called on the People’s Liberation Army (PLA) to be capable of invading Taiwan by 2027, raising the possibility of the re-elected von der Leyen facing yet another major international crisis, one she is eager to avoid. However, does the EU have the capacity to play a meaningful role in deterring China from invading Taiwan?

Why Taiwan matters to the EU

In 2022, Taiwan was the EU’s 12th largest trading partner and ranked 5th among its Asian trading partners. Taiwan produces over 60% of the world’s semiconductors, including around 90% of the most advanced chips. Any armed conflict in the Taiwan Strait poses a significant risk of global industrial disruption due to the world’s heavy reliance on Taiwan’s semiconductor supply. Additionally, the Taiwan Strait is one of the busiest maritime routes globally. About 50% of all container ships navigate the Taiwan Strait, with around 90% of the world’s largest container ships passing through. A blockade would severely disrupt global maritime trade, underscoring the importance of securing global supply chains for the EU’s economic security.

There is also a normative argument. The EU seeks to promote its fundamental values in its external relations, including Taiwan, which is regarded as a regional leader in democracy, human rights, and the rule of law. From this perspective, Taiwan represents a “valued like-minded partner” for the EU, as Taipei and the EU share common norms.

Furthermore, an invasion of Taiwan would fundamentally undermine the principles of a rules-based international order. As von der Leyen noted last year, the Chinese Communist Party (CCP) is pursuing a systemic change to the international order. Anthony Dworkin and Mark Leonard from the European Council on Foreign Relations argue that the EU has a strong incentive to protect the essential components of the rules-based international order, as this safeguards the EU from external threats and supports its economic interests in global trade and investment.

Military deterrence

Deterrence is the practice of discouraging or restraining states from taking unwanted actions, with several types commonly discussed. One is deterrence by denial, which seeks to deter an action by making it infeasible or unlikely to succeed. In the context of China, this strategy would entail deploying sufficient military forces on Beijing’s path to Taiwan.

However, the EU lacks the necessary capabilities and political unity for this. While the EU can encourage member states to deploy military assets under national commands to join the United States, Taipei’s most important ally, in countering China’s expansionist goals, the EU’s capacity for naval deployments remains limited, as highlighted by Paul van Hooft and Tim Sweijs from The Hague Center for Strategic Studies. This is not to deny that the EU Member States have been stepping up their military engagement in the Indo-Pacific. For example, the Italian carrier strike group and German warships passed through the Taiwan Strait this year—the first time in decades for Germany. 

What the EU should focus on, however, is a more efficient use of European resources, particularly by expanding its Coordinated Maritime Presences (CMP), as advocated by the European Parliament. CMP is a light mechanism that allows the EU to better coordinate existing member states’ naval assets, enhancing a sustainable military presence in the region.

Using the power of the EU market

Another form of deterrence is deterrence by punishment, which threatens severe penalties if a Chinese attack occurs, thereby raising the costs of aggression. In this context, access to the EU’s single market provides the EU-27 with considerable leverage over China. Michael J. Mazarr from the RAND Corporation argues that any successful deterrence strategy requires clarity about the object of deterrence and the actions the defender would take. Therefore, the EU should clearly communicate to China the nature and scope of measures that would follow an attack on Taiwan.

The EU’s deterrence strategy should include developing a Taiwan-related sanctions scenario with clear, credible threats aimed at persuading Beijing that the costs of aggression would outweigh any potential gains, as emphasized by Agathe Demarais of the European Council on Foreign Relations. Demarais advises against targeting China’s access to Western financial channels, as Beijing is progressing swiftly toward financial self-sufficiency. Instead, the EU should leverage its market power by focusing on Chinese imports.

The EU accounts for around 15% of China’s export market. Given China’s dependence on exports of manufactured goods, restricting access to the EU market would be painful for Beijing. If combined with the G7 economies, this figure would reach nearly 40%. Demarais suggests that the EU cooperate closely on Taiwan-related sanctions with the G7, as China cannot risk losing access to both the G7 and EU markets simultaneously.

However, China is the EU’s largest partner for imports. While the EU has a de-risking strategy to reduce its dependence on China, it remains significantly reliant on Chinese imports, particularly critical raw materials like lithium and cobalt, essential for manufacturing electric vehicles, high-speed trains, and renewable energy technologies. To mitigate the impact of Taiwan-related sanctions on European industry, Demarais proposes focusing on non-critical, finished consumer goods, such as electronic and electrical gadgets or low-end products.

Measures restricting China’s access to the EU market remain divisive, as seen with recent EU tariffs on Chinese electric vehicles. Member states are also divided on whether the EU should begin preparing sanctions against China to deter an invasion of Taiwan. Developing a Taiwan-related sanctions scenario would require the unanimous agreement of all 27 member states. However, Laura von Daniels from the Brookings Institution argues that the EU would face expectations from the Trump administration to implement economic sanctions against China and prepare such a scenario. 

Obstacles to the EU deterrence strategy

The EU faces severe challenges in both capability and political unity, limiting its ability to contribute substantially to deterring China in its actions against Taiwan. This reality highlights the shortcomings in the EU’s foreign policy framework, which is poorly equipped for a world increasingly shaped by geopolitical rivalries. A more effective EU foreign policy requires more than revising decision-making processes or institutional structures or enhancing operational capabilities; it requires a fundamental shift toward a proactive rather than reactive stance. Adopting a Taiwan-related deterrence strategy would exemplify such an approach. However, given the diverse foreign policy priorities, threat perceptions, and strategic cultures among the 27 member states, achieving significant shifts in EU foreign policy remains unlikely. The EU should, therefore, focus on strengthening its resilience and reducing dependencies on China to better prepare for a potential Taiwan-related crisis.