DPA Projection
China Invasion of Taiwan
PROJECTION UPDATE (13 May 2025)
- In a surprise U-turn by China, after strong words of not talking to USA or negotiating with USA without USA first eliminating their tariffs on China, China delegation met with USA delegation at Geneva, Switzerland between 10-12 May 2025.
- China and USA both agree to drop reciprocal-retaliation tariffs to 10% for 90 days - effectively setting the minimum tariff on each sides to 10% vs 30%. Read more about the deal here.
- The softening stance by China may be a signal of prioritization over stabilizing internal economic problems over challenging US hegemony - thus reducing the threat of using war on Taiwan to militarily-strategically defeat US influence/presence in the region.
- DPA assess the risk to drop from 50% to 40% - given the trade war respite is only for 90 days - and with the nearly insurmountable economic challenge facing China internally, China may not necessarily be able to offer a deal that USA want, and the high tariffs may return after the end of the 90 days.
PROJECTION UPDATE (7 April 2025)
- Trump administration's "New World Order" via international trade and economic reforms have a strong leaning towards isolating China or to force China to reform its economic policies.
- China is unlikely and possibly, literally unable to accede to any of the demands of Trump due to internal economic turmoil/problems.
- China's economic stability/growth is entirely underpinned by the enormous export numbers, and the export have to continue to grow in order to keep up with management of the enormous debt and poor internal economic situation - any reduction to export would hit twice as hard on China than usual for any other countries.
- The most opportune time frame / window to invade Taiwan has closed tremendously due to Trump's election:Trump has revigorated the US military recruitment & focus, massive investment into US military as well as remedying US military weakness, including investment into 6th Gen fighters, reinvestment in ship building as well as bringing back manufacturing that could improve US's war time production.
- China's military advantage on the Taiwan straits will be reduced with every passing month, as USA will complete its full redeployment/focus of its military from Europe to Asia, as well as introduction of new weaponry that is being ordered into production right now.
- If China's economic situation gets heavily hit by Trump economic/trade war assaults (especially Trump successfully gets many countries to cut/reduce trade with China) - China economic turmoil may create a lot more internal political problems than the Communist Party could deal with - which makes an invasion of Taiwan very unpopular with the citizens, whose concerns may be more on economic issues.
- Which again means that the only time frame in which China could launch an invasion with popular support would be, BEFORE such economic problem occur.
- China could also use "a war" in Taiwan to create a massive disruption, in order to fight off Trump's trade/economic offensive; similar to China's deliberate attempt to allow Covid-19 to go global to starve off the 2020 trade war situation, which China was losing/on the back foot.
- An invasion of Taiwan would also put Trump in a bad spot, as Trump runs on a no-war position - a prolonged military campaign in Taiwan stretching to the mid-terms in the US, could also potentially cause the Republican Party to lose either the House or Senate, crippling Trump's ability to conduct further effective reforms/actions in the USA.
- An invasion of Taiwan, would also test the will of USA to defend Taiwan - on top of that, the will of Japan, South Korea and the rest of US-allies/partners to side of USA on the conflict.
- Failure of the allies and partners to answer US' call to action to help defend Taiwan would effectively destroy US prestige and global leadership for good.
KEYSTONE DEVELOPMENT (2 April 2025)
- USA slaps minimum 10% tariff on all countries
- Tariff on China imports is now at 54%, putting tremendous pressure on Chinese imports into USA
- All countries are likely to enter trade negotiations with Trump.
- China had retaliated against the US "Liberation Day" tariff by announcing 34% tariff on all US goods. Including 10%-15% duties on certain products, certain products may now have 49% tariff.
DPA Projection (7 April 2025):
DPA believe that Trump administration, with the intention to prevent Chinese goods from avoiding the tariff via 3rd country, will force every country, particularly Mexico, Canada, Vietnam, Indonesia, etc... to either cut/reduce trade with China, or risk having the tariff stay at current high numbers (as per announced on 2nd April 2025 aka Liberation Day).
DEVELOPMENT (March 2025)
- A confidential Pentagon memo revealed that deterring a Chinese takeover of Taiwan has become a U.S. military priority. This aligns with proposals to reallocate defense resources, potentially increasing funding for commands focused on China.
- Defense Secretary Pete Hegseth stated that the United States is "no longer primarily focused" on Europe's security and emphasized that European nations need to assume greater responsibility for their own defense. This shift allows the U.S. to reallocate military resources toward addressing challenges in Asia, particularly concerning China's growing influence.
- Vice President JD Vance echoed this sentiment at the 2024 Munich Security Conference, asserting that the U.S. must prioritize East Asia and that European countries should increase their defense spending to ensure their own security.
- Reports suggest that the U.S. is considering adjusting the role of its forces stationed in South Korea, shifting focus from deterring North Korea to addressing broader regional challenges, particularly concerning China.
DPA Projection (7 April 2025):
DPA assess that we will soon be seeing increased military deployments to US bases in the Asia Pacific in the near future.
However, this will likely only happen after USA resolves the immediate problems with Iran as well as with the Houthis in Yemen.
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