HONG KONG, May 22 (Reuters Breakingviews) – The truce between the world’s two largest economies remains intact following last week’s disaster-free summit between U.S. President Donald Trump and his Chinese counterpart Xi Jinping. But the bilateral meeting may ​also have set the stage for Taiwan to feature more heavily in the duo’s future talks.

Official accounts from both sides suggest ‌the two leaders agreed to little of substance on matters of trade. What most stood out was Xi’s uncharacteristically blunt tone and direct message regarding the democratically governed island claimed by Beijing. According to the Chinese readout, opens new tab, Xi reiterated that Taiwan is the most important issue in U.S.-China relations and warned that mishandling it would push bilateral ties to a “very dangerous ​place”.

Xi’s warning simply underscores his hardening stance on cross-Strait matters, but Trump’s subsequent comments to Fox News indicate a shift on the ​U.S. side: the president said he hadn’t decided whether to proceed with a $14 billion weapons sale to Taiwan, calling the ⁠deal a “very good negotiating chip” with China. Moreover, Trump also publicly questioned the merits of having U.S. forces “travel 9,500 miles to fight a war” – a ​departure from his predecessor Joe Biden’s assurances that American troops would defend Taiwan from a Chinese invasion.

Fresh uncertainty over Washington’s commitment to the island will ​play into China’s hand. Beijing has ramped up political and military pressure on Taiwan in recent years and rebuffed calls from President Lai Ching-te for talks, instead labelling him a “separatist”. Trump further raised the stakes on Wednesday by saying he would speak directly with Lai, an unprecedented move for a U.S. leader. Beijing may respond by ensuring the arms ​deals feature more heavily in future U.S.-China talks.

For Lai, his safest hedge would be to double down on the island’s so-called silicon shield. Taiwan is ​home to giants like the $1.8 trillion TSMC (2330.TW), opens new tab, which makes most of the world’s cutting-edge semiconductors vital in artificial intelligence. The assumption is that the global economic fallout from ‌any war ⁠in the chipmaking hub ought to deter a conflict from materialising.

At the same time, Lai can also step up efforts to boost defence spending: earlier this month, the opposition-controlled parliament approved a $25 billion supplementary defence package, well short of the $40 billion Lai sought which included funding for locally made drones. Under Trump, Taiwan will need to prepare for a narrower path ahead.

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