Whither the Coalition? Assessing the Prospects of a Diverse Sanctions Coalition in Defense of Taiwan
“None of the countries under analysis would impose meaningful sanctions on China absent a forceful leadership role from the United States.”
— @EmilyKilcrease1 and @jamescrabtree
The Big Idea
If China moves aggressively on Taiwan now or in the future, sanctions would almost certainly be part of the U.S. response. But China’s economy is too large and too diverse for Washington to go at it alone. China is one of the few economies in the world that can absorb a U.S. sanctions campaign and hit back. To maximize the impact of an economic pressure campaign, the United States would have to build a broad and diverse coalition, including working with countries that have not historically aligned with U.S. sanctions.
In a new report, Whither the Coalition? Assessing the Prospects of a Diverse Sanctions Coalition in Defense of Taiwan, authors Emily Kilcrease and James Crabtree examine three countries—Singapore, India, and Germany—that could be critical partners, but whose cooperation is far from guaranteed. Drawing on extensive research and interviews conducted in each of the three countries, the report assesses how each country’s geopolitical context, economic structure, and institutional capacity would shape its willingness and ability to join an economic pressure campaign against the People’s Republic of China (PRC).
Key Insights
While Singapore, India, and Germany are examined individually in detail, common themes emerge across the three countries, with key insights including:
A Sanctions Coalition in Defense of Taiwan Is Not Guaranteed
Each of the countries studied showed high skepticism about heavy sanctions on China in the event of escalated aggression against Taiwan. Germany was the most politically open, as its overall position toward the PRC has hardened in recent years, but it retains significant reservations about economic blowback and the potential impact of sanctions. India shares concerns about the PRC’s threat to regional stability but has a long-held disapproval of sanctions and few weaponizable economic ties. Singapore’s extreme exposure to trade shocks makes it strongly opposed to weaponizing economic ties.
U.S. Leadership Is Essential—and Currently in Doubt
None of the three countries would impose meaningful sanctions on China absent a forceful U.S. leadership role. To coordinate a broad sanctions coalition, the United States would need to lead by example. Yet all three countries have experienced a sharp deterioration in relations with the current U.S. administration, leading stakeholders to express deep doubts about the U.S. commitment to Taiwan and skepticism about America’s ability or interest in defending a rules-based international order.
Taiwan Is Not Ukraine . . . and the PRC Is Not Russia
Russia’s invasion of Ukraine sparked concerns about a similar conflict over Taiwan, but the cases differ in stark and important ways. Taiwan’s international status is contested, and all three countries maintain a version of a one-China policy, which would delay, complicate, or even preclude robust support. Other distinctions cut the other way: Taiwan’s island geography would constrain resupply during a conflict, and its central role in global supply chains means disruption of chip supply is likely to trigger a global economic contraction. Countries willing to sanction Russia, such as Singapore and Germany, may not be willing to sanction China. The strategic interests at play differ, China’s role in the global economy is far more central, and the PRC has demonstrated a growing willingness to retaliate.
Private Sector Compliance May Exceed Home Government Actions
The centrality of the U.S. dollar gives Washington significant leverage to compel broad private sector compliance, and firms have strong reputational, legal, and commercial incentives to comply with U.S. sanctions even when their home governments do not impose similar measures. That assessment carries two caveats: (1) It depends on U.S. willingness to take aggressive enforcement action, including against politically sensitive targets, and (2) the PRC’s antisanctions law may create conflict-of-law scenarios in which firms cannot legally comply with both.
Recommendations
An effective approach to building a sanctions coalition must be grounded in a broader U.S. strategy for deterring and responding to significant escalation in PRC aggression against Taiwan that forcefully alters the status quo. It must also facilitate alignment by calibrating U.S. requests to each potential partner’s capacities and constraints. The report recommends that U.S. policymakers:
Pursue a steady, multifaceted approach to deterrence.
Neither the United States nor any of the countries studied want conflict over Taiwan, and conflict should not be viewed as inevitable. A robust deterrence strategy—spanning sanctions and other instruments of national power—should be a U.S. priority.
- Maintain a dual-deterrence goal. Because international support is highly contingent on how a conflict erupts, the United States should maintain deterrence of PRC aggression as well as Taiwanese moves toward independence that could provoke a PRC reaction.
- Steady the U.S. ship. The United States must affirm its Taiwan policy with potential partners and recommit to alliances and partnerships overall.
- Expedite efforts to build deterrence through resiliency. Economic pressure becomes more viable the more resilient U.S. and partner economies are to PRC retaliation.
Develop a well-calibrated approach to building a sanctions coalition.
Different partners bring different capabilities and constraints. Rather than demand that all partners mirror U.S. sanctions, Washington should craft a differentiated strategy that leverages each partner’s strengths and recognizes its sensitivities.
- Pursue tight alignment with close partners. The United States should clarify with close partners, such as Germany, that it expects alignment on sanctions against China should the PRC move against Taiwan and should intensify strategic planning, wargaming, and intelligence sharing to game out sanctions options and resiliency preparations.
- Facilitate looser alignment with other partners. Because neither Singapore nor India is likely to mirror U.S. sanctions, Washington should develop other means to engage them—such as cooperation on enforcement and compliance within their jurisdictions, or diplomatic support.
- Make an interests-based argument for the defense of Taiwan. Taiwan’s contested status and the disruption of current U.S. foreign policy make appeals to a rules-based order harder to sustain. Washington may have more success appealing directly to the economic and strategic interests each partner would see implicated in a Taiwan crisis, including the deep global recession a conflict could produce.
- Use U.S.-vs.-China framing selectively. Forcing Singapore or similarly situated partners to view the defense of Taiwan through the lens of U.S.-PRC competition is likely to be counterproductive. With close security partners such as Germany, a competitive framing may be useful if the United States makes clear that support for Taiwan is a priority within the alliance.