First, it sends a signal to China that the United States is not serious about defending Taiwan. The United States has long maintained a policy of “strategic ambiguity” about whether it would go to war to defend Taiwan. The CHIPS Act announces to the Chinese leadership (and to the Tainwanese, for that matter) that the United States is leaning against going to war to defend Taiwan, so it’s investing in alternative sources for chips. If the United States were 100 percent committed to defending the island democracy, why would it be looking for economic alternatives? Today, most analysts inside and outside of China believe that the People’s Liberation Army won’t have the capability for a cross-strait invasion until about 2027, but the more the United States signals that it’s not committed to opposing such an invasion, the easier it is for the People’s Liberation Army to imagine that they’d be fighting the Taiwanese alone. That makes war more, not less, likely.

The same logic applies to the rest of the world and forms the second, longer-term problem with the CHIPS Act. The less the world relies on the Taiwanese chip supply, the less it will care about the fate of that nation. Taiwan already lacks normal diplomatic relations with countries around the world because China often bullies other countries into downgrading their relations with Taipei. As a consequence, Taiwan struggles to forge liberal international trade relations. Reducing the world’s commercial interest in Taiwan will correspondingly reduce the world’s commitment to defend Taiwan against a much larger enemy.

The third problem with the bill is that it might actually work.