The U.S. House of Representatives Has Passed the "Taiwan Protection Act," Which Will Impose Financial Sanctions on Aggressors.

Taiwan/Flag of the Republic of China. On January 11, 2023, at a military base in Kaohsiung, Taiwan‘s armed forces conducted a two-day routine exercise. (Annabelle Chih/Getty Images)

[People News] On February 9, the U.S. House of Representatives approved the "PROTECT Taiwan Act" with an overwhelming vote of 395 to 2. This legislation mandates that if Taiwan's security is threatened by actions from China, the U.S. must take all necessary measures to exclude China from the international financial system and organisations.

As reported by Newtalk, the "Taiwan Protection Act" was introduced by Republican Congressman Frank Lucas. The bill stipulates that if the safety, social, or economic systems of the Taiwanese people are endangered by the actions of the Chinese Communist Party, the U.S. should, to the fullest extent possible, exclude representatives of the Chinese Communist Party from international financial mechanisms and organizations such as the Group of Twenty (G20), the Bank for International Settlements (BIS), and the Financial Stability Board (FSB).

Before the vote, Lucas emphasised that if Taiwan were to be invaded, the U.S. response should be robust and include various sanctions and economic penalties. Thus, excluding China from international organisations must be considered as one of the options.

According to reports from the Dajiyuan, Taiwanese legislator Chen Guanting stated that this action signifies a transformation in the deterrence mechanism regarding Taiwan, which has shifted from a primary focus on military security to substantial checks and balances in financial and institutional aspects, carrying clear strategic importance for regional stability. Previously, discussions on deterrence within the international community primarily revolved around military enhancements and deployments. However, modern conflicts have evolved into cross-domain competitions, where the financial system, clearing mechanisms, and international capital flows act as strategic levers. By incorporating financial sanctions and institutional exclusions into the preemptive deterrence framework, the overall cost assessment of aggressive actions can be significantly increased.

He emphasised that such legislation serves not only as a political statement but also institutionalises the consequences and clarifies the costs, compelling potential aggressors to confront structural risks before making decisions, which is a crucial condition for effective deterrence.

Chen Guanting highlighted that Taiwan is situated at a critical juncture of the first island chain, and maintaining stability in the Taiwan Strait aligns with the shared interests of the democratic camp and the global supply chain. A series of bipartisan legislations promoted by the U.S. Congress in recent years, covering military cooperation, technology controls, and financial checks and balances, indicates a deepening institutional focus on Taiwan Strait security. 'Taiwan must continue to enhance its self-defence capabilities and social resilience while also strengthening cooperation with like-minded countries in the economic and financial security framework, ensuring that deterrence is present not only within weapon systems but also throughout the entire institutional network.'

Chen Guanting pointed out that when deterrence extends from military aspects to financial and institutional levels, it signifies that the international community's commitment to maintaining peace in the Taiwan Strait is gradually shifting from merely 'expressing support' to ensuring that 'both tools and means are effectively in place.'

Despite the 'Taiwan Protection Act' passing the House of Representatives with a significant majority, the bill will still be forwarded to the Senate for consideration. Once it is approved by the Senate, it will be sent to President Donald Trump for his signature. △