Can European Countries Avoid Being Dragged Into A Conflict In Taiwan? – Analysis


By Alicia Garcia Herrero

Taiwan has hit the news headlines nearly as much as Ukraine in 2022 and this is not coincidental. Firstly, rising tensions between the United States (US) and China have put Taiwan at the centre of their disagreements. Secondly, Taiwan is also a moving target as Taiwanese society becomes more self-conscious and prouder of their democratic regime.

A wealth of articles has been written as to how the US would react in the event of a military attack from the Mainland towards Taiwan, but much less has been said as to how European countries, in particular the European Union (EU) member states, would react. Such silence starts from the EU officials themselves, who are probably too concerned about China’s reaction to such a sensitive issue, but this is just a very superficial explanation for a very limited focus on Taiwan.

To start with, the EU has never had any specific policy on Taiwan like the US does. Even for those EU countries that have had more historical links with the Pacific, as is the case of France or the Netherlands, Taiwan has never been central in their strategy. On the other hand, though, many European member states have stepped up their economic relations with Taiwan in specific sectors, particularly wind energy in the past few years (specially Denmark and Germany) but also as part of the supply chain of semiconductors (the Netherlands). 

It is important to note that the EU-Taiwan economic ties have two main angles. First, trade, centred on semiconductors imported by Europe from Taiwanese fabs but also the export of lithographic machines by a Dutch company (ASML), which is fully embedded in Taiwan’s semiconductor supply chain. Furthermore, the EU is Taiwan’s largest foreign direct investor (FDI), much larger than the US. Most importantly, Taiwan receives quite a large amount of investment from the EU (the equivalent of one fifth of European FDI into the Mainland even if Taiwan is much smaller in terms of economic size). In other words, the EU member states do have economic interests in Taiwan, although they still pale compared to those in the Mainland. This means that, while relevant, economic interests should not constitute the tipping point for the EU to be dragged into a military conflict surrounding a potential invasion of Taiwan.

Beyond economic interests,  shared democratic values, EU-Taiwan relations have strengthened in recent years, and especially recent months. In early June 2022, Brussels and Taipei upgraded their Economic Dialogue and several EU countries expanded their bilateral links to Taiwan—this involved mainly states in Central and Eastern Europe, including the Czech Republic at a very important moment, namely when taking the helm of the rotating presidency of the EU. This is in line with US policies, but it is hard to argue that it is stemming from US pressure on Europe. In fact, the reason is also economic, given the stalled economic relations with the Mainland, at least as far as trade and/or investment agreements are concerned.

In fact, the EU was expected to ratify an agreement reached on December 30, 2020, focused on lifting investment barriers, namely the EU-China Comprehensive Agreement on Investment (CAI) in 2022 under the French presidency but, after a marathon of negotiations which started in 2013, ended the day before the end of 2020. All this effort ended in tears as the EU decided to impose sanctions on targeted Xinjiang-related officials. The main reason for these, rather symbolic, sanctions was for the EU institutions to demonstrate to those critical about CAI that the EU still had enough autonomous measures to deal with China.

The irony is that China’s retaliation backfired as its sanctions hit a number of European Parliamentarians, which is the body in charge of ratifying EU treaties, including CAI. Beyond CAI, the consequences of China’s sanctions on the EU and its members are far more important since they show that designing autonomous measures as deterrence against China’s potentially hostile actions will not deter China. On the contrary, China will double down on its threats. This is exactly what has happened with China’s actions against Lithuania (basically stopping any imports) notwithstanding the EU’s preparation of an anti-coercion tool for any of its members states. This, seemingly unrelated issue, is very important to understand the increasing political support of the European Parliament, but also some member states, to Taiwan, which has crystalized in several visits of EU Parliamentarians to Taiwan.

The other crucial factor, especially for Eastern European countries, is the Russian invasion of Ukraine and China’s ambiguous position on this conflict, which, for many Europeans, reads as implicit support for Russia. To add to the complexities, China’s implicit support for Russia, at least in the minds of most Europeans, comes at a time when China’s image in Europe is at historically low levels after the COVID pandemic.

Against such a backdrop, an important—even if still hypothetical—question is what would the EU member states do in the event of a military conflict between the Mainland and Taiwan. It goes without saying that such conflict could take many forms, from outright invasion to a blockade. One could also imagine a situation where cyber warfare is preferred or even infiltration with a direct impact on the functioning of the Taiwanese economy. The spectrum of possibilities complicates even further the question as European countries may react differently depending on the clarity of the military aggression.

Still, even if we take the most extreme case, i.e., an invasion of Taiwan, the response of the EU member states in such a scenario is everything but clear. To start, the fact that the EU member states have reacted in a united manner against Russia’s aggression on Ukraine does not ensure that the same would happen if Taiwan were to be invaded. Economic interests will, in principle, weigh against such reaction but two important things need to be noted. First, some European member states—especially France, Germany, and the Netherlands—have announced their Indo-Pacific strategies, and so has the EU as a whole.

This is a clear indication of the EU, and its members, search for partners Eastwards rather than relying only on their long-standing Transatlantic Alliance. Secondly, bilateral relations between key EU member states, but also the EU, on the security front have never been closer. In the same vein, the fact that Japan has followed the rest of the G7 with regards to sanctions on Russia opens the door to potential reciprocity in the event of an invasion of Taiwan. Finally, the pressure of the US on Europe cannot be underestimated, especially after the US helping hand on Ukraine.

All in all, while Taiwan is certainly a distant geopolitical issue for the EU, compared to Ukraine or other potential conflicts in its neighbourhood, key changes have happened in the past few years that increase the likelihood of the EU being dragged into a military conflict in the Taiwan Strait. On the economic side, the EU-Taiwan ties are obviously as sizable as those of the EU with the Mainland, but they are also quite strategic, especially on the semiconductor front.

The second, and most powerful, argument is the US’s likely push for the EU to be involved. The fact that Japan is preparing for this situation is also key to understand the EU’s likely increasing involvement in the Indo-Pacific security discussion, with a final eye on Taiwan. Thus, the EU’s role in a potential conflict in Taiwan is uncertain but slightly more certain than it would have been before the rapid worsening of EU-China relations and China’s implicit support for Russia’s invasion of Ukraine.

Observer Research Foundation

ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

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