A conflict in the Taiwan Strait could inflict economic damage greater than World War II, the top U.S. representative in Taiwan warned Wednesday, Sept. 9, as Taiwanese officials called for stronger defenses, expanded drone capabilities and supply chains free of Chinese components.

American Institute in Taiwan Director Raymond Greene told the 2026 Taipei Security Dialogue that preventing war in the Indo-Pacific is a top priority for the Trump administration, according to Focus Taiwan.

Washington is pursuing that goal through high-level diplomacy with Beijing, a stronger U.S. military presence and partnerships in the Indo-Pacific, and support for Taiwan’s self-defense capabilities. Greene said an upcoming Sept. 24 U.S.-China summit in Washington could help reduce misunderstandings and improve strategic stability.

“To deter a conflict, Taiwan doesn’t need to demonstrate that it can win a war outright,” Greene said. Instead, Taiwan must persuade Beijing that landing and sustaining a large invasion force across the Taiwan Strait would be extraordinarily difficult.

Greene said Taiwan can draw lessons from Ukraine and the Middle East, particularly in asymmetric warfare, new technologies, decentralized command and societal resilience. He pointed to Taiwan’s recent Han Kuang exercises, which included Patriot missile batteries and armored forces operating in urban environments.

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“This is not an incremental change,” Greene said, describing Taiwan’s recent defense preparations as a fundamental shift in its approach to national defense.

Greene also rejected arguments that stronger Taiwanese deterrence or U.S. support for Taiwan’s defenses amounts to provocation or a change in Washington’s policy. The objective, he said, is not simply to prepare to win a war, but to make sure one never begins.

Taiwan-Lai-Ching-te
Taiwan President Lai Ching-te inspects casualty triage and medical care during the Han Kuang military exercises at Hualien Air Base. (Image: Annabelle Chih/Getty Images)

Taiwan expands drones, AI and ‘non-red’ supply chains

Vice President Hsiao Bi-khim said Taiwan is accelerating its own preparations based on lessons from Ukraine and the Middle East, particularly the growing role of drones, counter-drone systems, distributed command and artificial intelligence.

In remarks published by Taiwan’s Presidential Office, Hsiao said drone and counter-drone technologies have “changed the nature of the battlefield,” while AI could improve intelligence analysis, targeting support, interception and logistics.

Hsiao said President Lai Ching-te has committed to raising defense spending to 5 percent of GDP by 2030 under NATO’s definition of defense expenditures. Taiwan is prioritizing asymmetric warfare, air defense and a domestic defense industry capable of sustaining military operations.

The government has also submitted additional funding for unmanned systems. Coastal reconnaissance and attack drones, along with small unmanned attack vessels, are to be developed and manufactured domestically.

Hsiao said government-produced and purchased drones — including civilian systems — must use entirely “non-red supply chains,” meaning supply chains free of Chinese components. The policy is intended to reduce security risks and dependence on China while expanding Taiwan’s domestic drone industry. CNA reported that the proposed defense package includes NT$55.9 billion for three unmanned-system programs.

Taiwan’s ultimate objective, Hsiao said, remains preserving peace and protecting the ability of its people to determine their own future.

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