How Will the US Strike on Venezuela Impact Taiwan?
Geopolitics are not taking a breather in 2026, with early US military action in Venezuela last month. And tensions could stay high, especially in Asia, with implications for China and its views on Taiwan.
Geopolitical tensions remain elevated with the US decision to take military action in Venezuela and remove President Nicolas Maduro on January 3. While there are some immediate concerns, such as the impact on commodity markets as Venezuela is home to the world’s largest oil reserve, there are also serious geopolitical implications in Asia.
For the region, the most notable matter being closely observed is the subsequent effect on decisions by China – a strategic ally of Venezuela under Maduro – when it comes to any potential moves on Taiwan, which it considers a rogue province that is part of its territory.
«[T]he risks surrounding the situation in Venezuela pertain to nearly every facet, including political, operational, financial and geopolitical,» said Daleep Singh, vice chair and chief global economist, fixed income, at New Jersey-based PGIM, highlighting the second order effects of regional influence on Taiwan and the exacerbation of great power competition between the US and China.
Military and Psychological Factors
According to asset managers and banks, military and psychological factors are at play for consideration by Beijing.
«On the global stage, the events in Venezuela may prompt other powers, particularly China, to reassess their strategic calculations. While some speculate that this could accelerate tensions over Taiwan, the efficiency of the US military operation may give other nations pause before pursuing aggressive territorial ambitions,» according to a commentary by US asset manager Allspring.
«[T]he US action will have a bearing on Beijing's calculus on Taiwan. On the one hand, it can justify China’s potential actions. On the other, it makes the whole operation riskier given Trump’s unpredictability,» said a research noted by Alicia Garcia-Herrero, chief economist, APAC, Natixis CIB.
Emboldening North Korea and Myanmar?
In addition, Garcia-Herrero believes that US action in Venezuela could also affect other Asian countries that may view the new world order as one based on the «'law of the jungle' rather than the 'rule of law’».
«This could embolden Asian rogue states, like North Korea, with recent missile tests. It should also bring the attention to Myanmar’s junta, potentially escalating,» she added.
«All in all, Asian investors should closely monitor this event for three critical reasons. Markets’ indifference, tech-obsessed, is untenable; geopolitical encroachments on nodes like Taiwan may jolt a much stronger reaction, mandating diversification and hedges right now.»
