Moneycontrol PRO
Swing Trading 101
Swing Trading 101

Why Taiwan, not Greenland, is the real test of American power

While Donald Trump fixates on Greenland, his muted response to China’s moves around Taiwan is raising alarms about deterrence, credibility and the risk of a far bigger war.

January 25, 2026 / 12:16 IST
Why Taiwan, not Greenland, is the real test of American power
Snapshot AI
  • Trump's relaxed stance on Taiwan worries security analysts amid China's drills
  • US delayed response to China's Taiwan drills, sparking deterrence concerns
  • Taiwan conflict risks US-China clash, impacts global semiconductor supply

From Taipei, the contrast is hard to miss. Donald Trump has spent weeks talking tough about Greenland, even hinting at military action over what he frames as a national security concern. Yet when it comes to Taiwan, a place where a real war could plausibly break out, his tone has been strikingly relaxed.

That disconnect is what worries many security analysts, the New York Times reported.

China’s drills, and America’s quiet response

Late last month, China fired missiles around Taiwan in live-fire exercises that looked uncomfortably like a rehearsal for a blockade. European governments reacted quickly, urging restraint and signalling concern.

Washington did not. The US response came only after the drills had ended, and even then it was delivered by a deputy spokesperson rather than senior leadership. Trump himself played the exercises down.

That delay matters. In crises like this, speed and clarity are part of deterrence. Silence, or indifference, gets noticed in Beijing.

Why Taiwan is different

A conflict in the Taiwan Strait would not be a regional scuffle. It would risk direct confrontation between the United States and China, both nuclear-armed powers. It would also hit the global economy hard. Taiwan produces the bulk of the world’s most advanced semiconductors, chips that power everything from smartphones to fighter jets.

Strategically, Taiwan also anchors the so-called first island chain, a line of territories that limits China’s ability to project military power deep into the Pacific. Losing Taiwan would dramatically weaken American influence in Asia.

In short, if there is one place where deterrence really matters, it is Taiwan.

Trump, Xi and the signals being sent

Trump’s public comments have done little to reassure allies. Asked recently how Xi Jinping might handle Taiwan, Trump said he would be “very unhappy” if China attacked and hoped Xi would not do so. For a crisis of this scale, that language sounded thin.

Inside the US system, the warnings are far sharper. Military commanders have said China’s manoeuvres look like practice for forced unification. Pentagon assessments suggest Beijing aims to be capable of winning a war over Taiwan by the end of this decade.

Xi may prefer to avoid war. But deterrence depends on what he thinks the costs would be. A distracted or hesitant United States lowers those perceived costs.

Allies watching closely

The unease is not limited to Taiwan. Japan, a key US ally, has faced intense pressure from Beijing after signalling it might respond if Taiwan were attacked. Normally, that would prompt strong public backing from Washington. This time, Trump reportedly urged Tokyo to keep its head down.

To many in Asia, that looked less like strategic caution and more like abandonment.

Why rare earths and Ukraine matter here

Part of Trump’s restraint may be practical. China’s control over rare-earth minerals gives it real leverage over the US economy. Beijing has used that leverage before, and Trump knows it could do so again.

Still, critics argue that backing away only deepens the problem. If China sees economic pressure as an effective deterrent against US action, it becomes more, not less, likely to test the limits.

They also point to Ukraine. A united Western response that makes aggression costly for Russia would send a powerful message to Beijing. A divided or wavering response sends the opposite one.

The bigger risk

To Trump’s credit, the administration has approved a large arms sale to Taiwan, which does strengthen deterrence. But diplomacy and signalling matter as much as hardware.

By loudly chasing a hypothetical crisis in Greenland while appearing disengaged from Taiwan, Trump risks flipping priorities on their head. Greenland is a fantasy fight. Taiwan is a real one.

And if Beijing concludes that Washington is unwilling to act decisively when it counts, the world could find itself facing the one conflict almost everyone agrees would be catastrophic.

MC World Desk
first published: Jan 25, 2026 12:16 pm

Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Subscribe to Tech Newsletters

  • On Saturdays

    Find the best of Al News in one place, specially curated for you every weekend.

  • Daily-Weekdays

    Stay on top of the latest tech trends and biggest startup news.

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347