Nancy Pelosi risked global security with Taiwan visit, all in a feeble attempt to shore up Democrat voter base

US House Speaker’s Taiwan visit was a political stunt with the shortsighted aim of winning Democrat votes ahead of midterm elections
Yet there will be long-term consequences, including heightened geopolitical uncertainty, while Beijing will inflict economic pain through tariffs and sanctions

Sameed Basha

Published: 1:30am, 6 Aug 2022

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The trip to Taiwan by Nancy Pelosi, third in line to the US presidency, marked the most senior-level US visit to the island in 25 years. For the past two weeks, tensions have been building around the event, with sharp words from Beijing about violating the one-China policy.

Pelosi’s visit was not a spur-of-the-moment thing but a venture carefully coordinated by the White House, Congress and the Pentagon so as to balance provocation with plausible deniability.

It was another attempt by the US at “salami slicing” China – incrementally changing the status quo. Since US President Joe Biden’s inauguration, Pelosi’s Taiwan trip has been the most provocative front against China. The timing was odd, given that Biden and President Xi Jinping held a phone conversation that lasted more than two hours less than a week ago with the aim of easing tensions.

Pelosi knows Taiwan is Beijing’s red line. As such, her insistence on visiting the island raises questions over whether she has lost faith in Biden’s foreign policy or, as the Chinese are suggesting, her provocative stance is more of a political stunt to show that she is more willing to challenge China than Biden.

US President Joe Biden and Nancy Pelosi during a meeting with House Democrats in Washington in October 2021. Photo: AP

The trip comes when the US is asserting itself internationally, with a drone strike on al-Qaeda chief Ayman al-Zawahiri in Kabul, brewing tensions between US-backed Kosovo and Russia-backed Serbia, and potential weapons sales to Saudi Arabia. Meanwhile, at home, the Democrats are heading into the midterm elections in November facing a possible wipeout.

Pelosi, the current Speaker of the House of Representatives, launched her re-election campaign early in the year, hoping to retain the role for a fifth term. Her approval rating stands at 24 per cent, with 60 per cent of voters wanting her to step aside, while 49 per cent of Democrats favour her remaining.

Taiwan cannot turn down overtures by the US; Pelosi’s visit is a feeble attempt to shore up the Democrat voting base rather then being in Taiwan’s interest.

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US House Speaker Pelosi meets Taiwanese president, officials and activists on controversial visit

The ramifications for Taiwan’s economy are likely to be long-lasting. Investor confidence is bound to fall, thanks to the uncertainty Pelosi’s trip has created. A third arms package, worth US$95 million, approved by the US State Department in April for Taiwan’s defence, adds to the list of grievances Beijing has with Washington.

Beijing views the Taiwan visit as a direct contravention of the one-China policy, infringing on its sovereignty and territorial integrity. Its response has been to launch targeted military exercises around the island.

However, despite a show of force, there is only so much that Beijing can do militarily without raising the risk of war. Keeping in line with its philosophy of playing the “long game”, Beijing will instead inflict economic pain through tariffs and sanctions.

Beijing may seek to craft policies that will affect the average American voter, 63 per cent of whom live pay cheque to pay cheque. Combined with a looming recession in the US, any additional economic burden would probably lead to the transgressors in the Biden administration being voted out in the midterms.

Chinese military helicopters fly past Pingtan Island, one of the closest points between mainland China and Taiwan, on Thursday, following Pelosi’s visit. Photo: AFP

Beijing could reduce its US debt holdings, which hover around the US$1 trillion mark, and flood markets with a supply of US bonds which would cause fixed income prices to fall and increase yields.

If yields increase, it would make it more expensive for US corporations and the public to borrow, slowing the US economy and pushing it further into a recession. With a global downturn, it would be difficult for other countries to buy US bonds and fill the void left by China.

In addition, Beijing could devalue the yuan, making Chinese exports cheaper and expanding the trade deficit with the US. As for influencing Russia’s war with Ukraine; Xi could decide to help to replenish the Russian war chest as well as supply drones to Putin, going against a request by Biden not to do so during a previous phone call in March.

Pelosi’s symbolic visit to Taiwan was timed for short-term gains to an eroding Democratic voter base. Yet such provocations only increase uncertainty in markets and the world at large.

In Europe, the US repeatedly disregarded Russia’s concerns as it pursued Nato expansion, eventually pushing President Vladimir Putin to launch an invasion of Ukraine. Recognising the one-China policy while simultaneously chipping away at it through arms deals and state visits increases distrust and places the US in an untenable position of fighting a war on two fronts, one that it is destined to lose.

Sameed Basha is a defence and political analyst with a master’s degree in international relations from Deakin University, Australia