This Is How the Iran War Goes Global. By Niall Ferguson in The Free Press.
17 days into the conflict, the U.S.-Israeli campaign has run into a very old problem: control of a strategic waterway.
Despite being entirely outgunned, despite having lost control of its own airspace, the Islamic Republic retains sufficient firepower to attack shippers in the Strait of Hormuz, deterring them from moving through it …
Meanwhile, Iran’s aggressive missile-building program was a Chinese-enabled project. …
Which brings us to the next great global choke point: the Taiwan Strait.
More than 90 percent of the world’s most advanced semiconductors, and 99 percent of the chips used for cutting-edge AI training, are manufactured in Taiwan. Taiwan imports 97 percent of its energy supply in the form of oil, LNG, and coal. This makes the Taiwan choke point far more important in relative terms than the Strait of Hormuz has ever been for global energy markets.
The temptation of Xi:
The rational strategy for Xi is not an amphibious invasion or blockade of Taiwan. It is to wait for Taiwan’s January 2028 election in the hope of a Chinese Nationalist Party victory and a decisive shift toward Beijing’s goal of “One Country, Two Systems.” However, there is a growing tail risk that he is tempted to act more boldly, taking advantage of yet another American imbroglio in the Middle East.
Rather than risk a kinetic confrontation in the Middle East, Xi’s best option is to deploy Chinese coast guard vessels and assert Beijing’s right to collect customs duties and regulate the flow of goods to Taiwan. He can present this as consistent with international law, satisfying many countries and companies — especially those with significant business interests in the People’s Republic of China.
True, Taiwan is recognized as a “separate customs territory” by the World Trade Organization, defined in the 1994 Marrakesh Agreement as meaning Taiwan has “full autonomy in the conduct of its external commercial relations.” In 2001, China agreed that Taiwan and Hong Kong would enjoy this status. However, as former State Department counselor Philip Zelikow has argued, China could simply revoke it for Taiwan, just as Trump revoked it for Hong Kong in 2020. China could also then apply its export controls to goods leaving Taiwan, again citing American precedents for doing so.
Should China make such a “gray zone” move, it would immediately become apparent that the biggest choke point in the world is not the Strait of Hormuz; it is the Taiwan Strait.
Questions:
The administration is now trying to salvage a plan that seems to be, like Churchill’s in 1915 [at Gallipoli], disintegrating on contact with the enemy. It may still be salvageable. The Islamic Republic may yet oblige Trump by expiring. I do not rule that out.
However, if Trump’s advisers do not keep their wits about them, they may overlook the fact that they have created a huge strategic opportunity for China and Russia — especially if they act in concert. Washington may miss, amid the mood music of a superpower summit, the preparations for a coup de main that would upend the international economy and the world’s geopolitical order.
The Strait of Hormuz is blocked. For how long?
The Strait of Taiwan is open. For how long?