Europe's Taiwan Problem: The Continent That Depends on the Outcome Without Shaping It
European governments have spent the past four years discovering that their economic exposure to Taiwan is larger and more structurally significant than their political frameworks were designed to address. The semiconductor dependency is the most acute dimension: European automotive manufacturers, industrial equipment producers, telecommunications companies, and defense systems contractors all depend on Taiwanese chip production for components that have no short-term European substitute. A Taiwan Strait conflict that disrupted semiconductor supply would hit European industry within weeks and would affect European defense procurement on timescales that matter for the continent’s own security.
The numbers are not abstract. The automotive sector — Germany’s most strategically important industry — requires advanced semiconductors for every modern vehicle, in volumes that European domestic chip production cannot supply. The European Chips Act, announced in 2022 and designed to double Europe’s share of global semiconductor production by 2030, is a serious policy initiative that will produce results on the timescale of years. It does not produce results on the timescale of a Taiwan contingency in the near term. European industrial exposure to Taiwanese chip supply is not reducible by policy on the timeline that the current risk period implies.
The political response to Taiwan Strait risk in Europe has been uneven. France and Germany, the two largest European economies, have each given voice at various points to a “strategic autonomy” framework that implies European equidistance between American and Chinese positions on Taiwan. Emmanuel Macron’s comments following his 2023 Beijing visit — questioning whether Europe should be drawn into a conflict between the United States and China over Taiwan — produced a significant diplomatic reaction from American and Asian allies who read the statements as potential defection from the Western alliance framework. The subsequent clarifications did not fully repair the impression.
The Baltic and Nordic states, Poland, and the newer EU members from central and eastern Europe have taken consistently harder lines on China and Taiwan than the western European core. Their recent experience of Russian aggression has produced a threat assessment framework that is more readily applicable to Taiwan than the frameworks developed in the post-Cold War European mainstream. Countries that understand what it means to have a nuclear-armed neighbor claiming their territory as a historical inheritance do not need much convincing that the Taiwan scenario is serious.
European defense industrial exposure to a Taiwan conflict runs through semiconductor supply chains but also through rare earth and critical mineral supply chains that are even more concentrated. China produces and processes the overwhelming majority of rare earth elements used in defense systems, wind turbines, and electric vehicle motors. A Taiwan conflict that produced a comprehensive US-China economic confrontation would trigger Chinese restrictions on rare earth exports that would affect European defense production alongside American. The Europeans have limited alternative sources developed and would face the same supply crisis that American planners have been trying to reduce their exposure to.
NATO’s Asia-Pacific engagement has been cautious and contested. The alliance’s core commitment is to the North Atlantic area defined by the Washington Treaty. Taiwan is neither in the North Atlantic nor a treaty ally of NATO members in the Taiwan contingency. The political and legal path to NATO involvement in a Taiwan conflict is non-trivial, and several NATO members have domestic political constraints on military engagement in the Pacific that would make formal alliance involvement difficult. The practical question is whether individual NATO members — most significantly the United Kingdom — would participate in a coalition response under American leadership outside the formal NATO framework.
The United Kingdom, post-Brexit, has sought a more active Indo-Pacific role. The deployment of the Carrier Strike Group 21, centered on HMS Queen Elizabeth, to the Indo-Pacific in 2021 was a demonstration of intent. British participation in AUKUS has reinforced a commitment to the western Pacific security architecture that has no European parallel. The UK is the European country most likely to contribute meaningfully to a Taiwan contingency response, and it is also the European country that has most explicitly separated its strategic posture from the continental European mainstream.
Europe will bear the economic consequences of whatever happens in the Taiwan Strait. Its political capacity to shape those consequences is limited and is being developed more slowly than the risk is developing.