US Defense Secretary Pete Hegseth used his keynote at the Shangri-La Dialogue in Singapore on May 30, 2026, to urge regional partners to increase defence spending against China’s “historic military buildup” — while simultaneously describing US-China relations as “better than they’ve been in many years” and omitting any mention of Taiwan from his prepared remarks. The speech followed a Trump–Xi summit in Beijing on May 15, 2026, which produced language framing the relationship as a “constructive, strategic partnership,” and came days after a senior US official confirmed that arms sale approvals for Taiwan had been paused to prioritise munitions for operations in Iran.
The omission of Taiwan was not an oversight: when pressed in the Q&A, Hegseth said there was “no change” in the US position. The gap between that assurance and the operational reality of a paused arms pipeline is where regional anxiety now lives.
Washington is asking its Asian allies to spend more on defence against China while quietly pulling back one of the most concrete signals of its own commitment to the region’s most volatile flashpoint. Hegseth’s address at the 2026 Shangri-La Dialogue — his second consecutive appearance at the annual Singapore security forum — threaded a needle that may prove too fine: rallying partners around a shared threat while adopting diplomatic language that softens the very urgency he was invoking. The result is a strategic ambiguity that smaller nations in Southeast Asia, already wary of entrapment in great-power rivalry, are now left to interpret on their own. Vietnam’s President To Lam, speaking at the same forum, warned that the primary regional risk was “unchecked competition” where powerful nations act without restraint — a formulation that could describe Beijing, Washington, or both. The shift in tone from Hegseth’s 2025 address — in which he explicitly condemned Chinese aggression toward Taiwan and accused Beijing of seeking hegemonic power in Asia — is stark enough to demand explanation.
The details
Hegseth’s core argument in Singapore was that a Pacific dominated by a single hegemon would destabilise the regional balance of power, and that allies must invest accordingly. Yet the speech’s diplomatic register was markedly different from 2025. Taiwan — named explicitly in last year’s address as a target of daily Chinese harassment — did not appear in his prepared remarks at all. The three rhetorical dimensions that shifted most sharply between the two speeches are mapped in the data below.
The backdrop matters. The Trump–Xi summit of May 15, 2026, produced commitments to resume high-level military-to-military communications and establish working groups on maritime risk reduction, alongside the “constructive, strategic partnership” framing that Zhou Bo, a senior fellow at Tsinghua University‘s Center for International Security and Strategy and a retired senior colonel of the People’s Liberation Army, interpreted as Washington’s implicit recognition of China as a peer power in Asia. That language did not emerge by accident, and Hegseth’s speech echoed it.
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The arms question is harder to dismiss. A senior US official confirmed in May 2026 that approvals of additional arms packages for Taiwan under the Foreign Military Sales process had been paused, with Pentagon resources prioritised for Iran operations and escalation risks with Beijing under review. President Trump had previously described Taiwan arms sales as a “very good negotiating chip.” Hegseth, asked directly about Taiwan in the Q&A session, said future arms sale decisions rested with the president — an answer that confirmed the pause without resolving what it means.
China, for the second consecutive year, declined to send its defence minister to the Shangri-La Dialogue, dispatching instead a delegation led by a deputy chief of the Central Military Commission’s Office for International Military Cooperation. Ankit Panda, Senior Fellow at the Carnegie Endowment for International Peace, characterised the speech as “light on specifics” and argued it offered no clear pathway to prevent US-China competition from sliding into conflict, despite its emphasis on lethality and dominance. The full policy framework underpinning US commitments in the Indo-Pacific remains the 2022 US Indo-Pacific Strategy and the 2024 Indo-Pacific Defense Strategy, both of which explicitly support Taiwan’s self-defence — though neither anticipated the current diplomatic context. Details of the US policy architecture are available via the US Department of Defense Indo-Pacific Strategy report.
How Washington’s rebalancing reaches Western capitals
The broader structural force at work is not simply a diplomatic recalibration — it is a redistribution of deterrence costs. Bonny Lin of the Center for Strategic and International Studies has warned that using Taiwan arms as negotiating leverage with Beijing risks convincing allies that US commitments are conditional and reversible. Michael Green of the United States Studies Centre has argued that Washington’s ambiguity, if not paired with concrete reassurance measures, could encourage Asian partners to explore quiet accommodations with China. Elbridge Colby has gone further, contending that diverting resources to Iran while signalling caution over Taiwan directly undercuts a “priority theatre first” Indo-Pacific strategy.
The Taiwan Relations Act of 1979 obligates Washington to make defence articles available “in such quantity as may be necessary” for Taiwan’s self-defence — a statutory commitment that the current arms pause sits in uncomfortable tension with. The 1982 US-China Joint Communiqué separately commits Washington to gradually reduce the quality and quantity of arms sales to Taiwan over time, a clause Beijing has never stopped invoking. The gap between these two documents has always been managed through deliberate ambiguity; what has changed is who now appears to be exploiting that ambiguity, and in which direction. The question analysts are watching most closely is whether the next significant Foreign Military Sales notification for Taiwan arrives in coming months — a concrete sale would signal the pause is tactical; prolonged silence would confirm that Taiwan’s defence posture is being subordinated to US-China diplomacy and wartime priorities in Iran.
This story has direct consequences for Western actors that are not obvious from the headline. The dynamics around US overflight access and military cooperation in Southeast Asia are already shifting — Indonesia’s debate over US military overflight rights, explored in Indonesia’s contested overflight negotiations with Washington, illustrates how the reconfiguration of US forward posture is playing out at the country level across the Indo-Pacific. European manufacturers and logistics firms face heightened risk if ambiguity over Taiwan accelerates supply-chain shifts in semiconductors and advanced electronics. Insurers and shipping companies may reprice risk for South China Sea routes if signals from Washington and Beijing are read as eroding deterrence. That repricing would not wait for a crisis to materialise — it would happen the moment the market concluded the deterrent was no longer credible.
Beyond the headline
The power behind it
The structural driver is Washington’s need to reconcile finite military capacity with simultaneous great-power competition and active conflict. By softening rhetoric toward Beijing while asking allies to spend more, the US is effectively shifting part of the deterrence burden onto regional partners. That rebalancing of who pays, who risks, and who decides is the quiet redistribution of power beneath the summit soundbites.
The timing
This recalibrated tone arrives just after a Trump–Xi summit and amid US operations in Iran, when Washington has strong incentives to keep a lid on any Taiwan-related crisis. The same moment also coincides with several allies’ multi-year defence build-ups coming online, making it easier for the US to argue that others should now shoulder more of the visible deterrence posture while it manages multiple fronts.
What isn’t being said
Missing from the official speeches is how domestic politics on both sides of the Pacific constrain choices: US leaders face electorates wary of new wars, while Chinese leaders must avoid appearing weak on sovereignty. Also largely unspoken is the risk that using Taiwan security as a bargaining chip, even implicitly, could erode the very deterrent credibility that has helped prevent conflict in the Taiwan Strait for decades.
What Hegseth’s mixed message means for your exposure
With US strategic signalling toward Taiwan now running in two directions simultaneously, the practical implications depend on which sector of the Indo-Pacific picture you are watching.
- Western defence contractor with Indo-Pacific exposure
The US call for allies to increase military spending is a demand signal, but the arms-sale pause to Taiwan and the broader rebalancing of deterrence burden will reshape where procurement flows. Track whether Japan, Australia, and the Philippines accelerate autonomous capability investments — particularly in long-range strike, air defence, and maritime surveillance — as indicators of where demand is shifting. The US Department of Defense’s next Indo-Pacific posture review, expected within the coming year, will be the clearest signal of Washington’s own procurement priorities.
- US-based investor with APAC emerging market exposure
The mixed messaging on US-China relations introduces a new layer of geopolitical risk that is not yet priced into most emerging market indices. Track the next Foreign Military Sales notification for Taiwan: a significant sale would indicate the current pause is time-limited and tactical; its absence over the next two to three months would confirm a structural shift in US priorities that markets have not yet fully discounted. Review your national foreign ministry’s Indo-Pacific strategy documents — the EU’s 2021 Indo-Pacific strategy and the UK’s Integrated Review Refresh both assume continued US deterrence leadership in ways that may need revisiting.
- European logistics or shipping firm operating in the South China Sea
Insurers and risk analysts are already watching whether Washington’s softened deterrence signals translate into bolder Chinese gray-zone activity in the South China Sea. Re-evaluate your risk assessments for routes through the strait now, before any repricing event — the mechanism connecting US ambiguity to higher maritime insurance premiums is short and well-understood by underwriters. The US State Department’s Indo-Pacific and Taiwan fact sheets, revised when Washington adjusts its formal deterrence language, are worth monitoring as leading indicators of how the official posture is shifting.
- Policy advisor to a Southeast Asian government
Vietnam’s President To Lam named the problem publicly at the same forum where Hegseth spoke: unchecked great-power competition leaves smaller nations exposed. The practical question for your government is whether to accelerate autonomous defence investment now — while the US is still asking for burden-sharing — or to hedge diplomatically with Beijing while the US-China relationship finds its new equilibrium. The ASEAN platform remains the most credible multilateral venue for managing that hedge without triggering bilateral blowback from either Washington or Beijing.
Explainer
- Shangri-La Dialogue
- Shangri-La Dialogue. An annual Asia-Pacific security summit held in Singapore and organised by the International Institute for Strategic Studies since 2002. It brings together defence ministers, military chiefs, and security officials from more than 40 countries, making it the premier multilateral defence forum in the Indo-Pacific. Unlike formal treaty organisations, the Dialogue has no binding outputs — its significance lies in what officials choose to say, and equally in what they choose to omit, as Hegseth’s 2026 address demonstrated.
- Tsinghua University
- Tsinghua University. One of China’s two most prestigious research universities, located in Beijing, with a science and engineering heritage that has increasingly expanded into international relations and strategic studies. Its Center for International Security and Strategy has become a significant platform for Chinese analysts who engage with Western security discourse, sometimes offering interpretations that diverge from official government positions. Zhou Bo’s reading of Hegseth’s speech as implicit recognition of Chinese peer-power status reflects the kind of calibrated commentary the center produces for international audiences.
- Foreign Military Sales
- Foreign Military Sales. The US government-to-government programme through which Washington sells defence equipment, services, and training to foreign nations, administered by the Defense Security Cooperation Agency. Sales require a formal notification to Congress, making approvals — and pauses in approvals — publicly observable signals of US policy intent. The current pause in Taiwan packages is significant precisely because the FMS notification process is one of the most concrete, legally anchored mechanisms through which Washington demonstrates its commitment under the Taiwan Relations Act.
- Carnegie Endowment for International Peace
- Carnegie Endowment for International Peace. A Washington-based non-partisan think tank founded in 1910, with offices in Beijing, Brussels, Beirut, and New Delhi, making it one of the few Western policy research institutions with a sustained analytical presence inside China. Its Asia Program produces some of the most closely watched independent assessments of US-China-Taiwan dynamics. Ankit Panda’s characterisation of Hegseth’s speech as “light on specifics” carries weight in policy circles precisely because the Carnegie Endowment is read by the officials whose decisions it critiques.
