The Diplomat author Mercy Kuo regularly engages subject-matter experts, policy practitioners, and strategic thinkers across the globe for their diverse insights into U.S. Asia policy. This conversation with Dr. Simona Grano – head of research area China-Taiwan Relations at the University of Zürich, Switzerland and senior fellow on Taiwan at the Center for China Analysis, Asia Society – is the 477th in “The Trans-Pacific View Insight Series.”
Identify the shared strategic objectives between the EU and Taiwan.
The EU and Taiwan share several strategic objectives despite the absence of formal diplomatic ties. At the core, both prioritize the defense of democratic values, rule of law, and an open information environment in the face of rising authoritarian influence.
Economically, they share an interest in resilient supply chains, particularly in critical technologies like semiconductors, and an open, rules-based trading system.
In security terms, there is a shared objective of keeping vital sea lanes, especially in the Indo-Pacific, free, stable, and open, since disruptions in that region directly affect European and global economic security. Nearly half of global container traffic passed through the Taiwan Strait in 2022.
Finally, both sides aim to deepen cooperation on innovation, digital transformation, and green technologies, aligning with broader global challenges like climate change. On that front, there is significant potential to expand technical collaboration, simplify regulatory processes for joint ventures, and align Taiwan more closely with Europe’s emerging semiconductor strategy. This approach could also encompass an EU–Taiwan dialogue on technology, more structured mechanisms for joint investment, greater civil society engagement, and coordinated programs for parliamentary exchanges.
Examine the impact of EU-China trade tensions on EU-Taiwan trade relations.
While the EU still views China as a major economic counterpart, growing concerns over market access, subsidies, and political leverage have prompted Brussels to diversify supply chains and reduce strategic dependencies. In this context, Taiwan, a leader in advanced semiconductors and high-tech manufacturing, has become an attractive, like-minded partner. The two sides have stepped up their Trade and Investment Dialogue and expanded cooperation in areas such as renewable energy, digital technology, and critical raw materials.
However, EU-Taiwan trade relations remain constrained by the EU’s adherence to its “One China” policy and by Beijing’s potential retaliatory measures. In short, trade tensions with China open new opportunities for EU-Taiwan cooperation, but both sides must navigate them carefully to avoid escalation.
Given U.S. unpredictability toward Taiwan in potential cross-strait conflict, analyze the EU’s role in mitigating rising cross-strait tensions.
The EU’s role in mitigating rising cross-strait tensions is limited but not completely irrelevant. Unlike the U.S., the EU does not have security commitments to Taiwan, but it has several levers that can ease tensions.
First, its consistent emphasis on stability, peaceful resolution of disputes, and respect for the status quo sends a moderating diplomatic signal to both Beijing and Taipei. Second, the EU’s economic weight and trade ties with both sides create incentives for dialogue over escalation. Third, the EU can coordinate with partners, including the U.S. and regional actors like Japan, to ensure that crisis scenarios do not spiral due to miscalculation.
In sum, the EU’s leverage in the Taiwan Strait is political and economic rather than military. In a scenario where U.S. policy appears unpredictable, the EU will likely not become a military actor, but it can play an important role in de-escalation through diplomatic engagement, sanctions signaling, and by reinforcing the message that stability in the Taiwan Strait is a global interest.
Explain the strategic relevance of Taiwan’s semiconductor industry to the EU.
Taiwan’s semiconductor industry is of systemic strategic importance to the European Union. Taiwan – and TSMC in particular – produces around 60 percent of the world’s semiconductors and over 90 percent of the most advanced chips (7 nanometers and below). For the EU, whose industries depend on these chips for everything from electric vehicles and 5G to AI, defense, and renewable energy systems, this represents a structural dependency.
The 2020-2021 global chip shortage illustrated this vulnerability starkly: Europe’s automotive sector alone lost an estimated 100 billion euros in revenue due to semiconductor supply constraints. Automotive chips are particularly sensitive because roughly 37 percent of European semiconductor consumption comes from the automotive industry. This reliance is why the EU launched the 43 billion euro European Chips Act in 2022, explicitly identifying Taiwan as a key partner. While the Chips Act aims to double the EU’s share of global chip manufacturing from under 10 percent to 20 percent by 2030, Europe will remain reliant on Taiwan for leading-edge chips in the medium term. TSMC’s decision to invest in a plant in Dresden from 2024, supported by Berlin, reflects this strategic interdependence.
From a geopolitical standpoint, the risks are clear: any disruption in the Taiwan Strait, whether through blockade, conflict, or coercive economic measures, would impact European economies. This makes semiconductor cooperation a pillar not only of Europe’s industrial policy but also of its broader security strategy. At the same time, engagement with Taiwan allows Europe to diversify supply chains away from China and align with a technologically advanced democracy on standards, research, and innovation. In short, Taiwan’s semiconductor ecosystem is a critical enabler of Europe’s industrial competitiveness and digital sovereignty, and the EU’s long-term goal is to transform a dependency into a partnership.
Assess the effectiveness of Brussels in strengthening EU-Taiwan relations as China-U.S. strategic competition intensifies.
Brussels has become more proactive in strengthening ties with Taiwan, but its effectiveness remains constrained by structural factors. On the positive side, the EU has moved Taiwan from being a purely economic partner to a strategic one; in the past three years, we have seen a sharp increase in high-level parliamentary visits, the inclusion of Taiwan in the EU’s 2021 Indo-Pacific Strategy, the launch of the annual EU-Taiwan Trade and Investment Dialogue, and growing cooperation on semiconductors, supply chains, and cybersecurity. The planned TSMC facility in Dresden is a tangible outcome of this quiet engagement.
However, these steps are still small compared to the scale of U.S.–Taiwan engagement. Brussels faces two self-imposed constraints. First, the EU lacks a formal security role in the Taiwan Strait; its “strategic autonomy” narrative is primarily economic. Second, the EU’s member states hold differing views on how far to go in challenging Beijing, which limits the bloc’s ability to take unified positions on Taiwan. While the European Parliament has been vocal, the Council and the Commission are still careful not to frame Taiwan policy in explicitly geopolitical terms. The result is that Brussels has been effective in building practical resilience – for example, deepening tech, trade, and research ties – but much less so in political signaling.
The intensifying U.S.-China rivalry has created a narrow window for the EU to step up, particularly on supply chain partnerships and on supporting Taiwan’s meaningful participation in multilateral forums. Whether Brussels can translate this cautious momentum into a coherent long-term policy will be a defining test of the EU’s Indo-Pacific ambitions.