In October 1956, Britain, alongside France and Israel, attacked Egypt to regain control of the Suez Canal. Though initially successful, the operation collapsed under pressure from the United States and the Soviet Union. Within days, Britain was forced to retreat, its global stature diminished irreparably. The Suez Crisis was the moment an overstretched empire was forced to confront the limits of its power.

The US could face a similar inflection point in Taiwan. The lessons from Suez can be summarised in one phrase: beware imperial overreach – the pursuit of global commitments that exceed a nation’s capacity. Taiwan sits at the heart of the US-China rivalry, central to the regional balance of power and global semiconductor supply chains. The challenge ahead is to prevent the defence of Taiwan from becoming a new Suez, by focusing less on Beijing’s intentions and more on American capacity. This will involve shoring up Washington’s regional alliances, strengthening military-industrial capacity, recalibrating global commitments, and reining in the budget deficit.

Taiwan lies an ocean away from the United States, yet it may prove to be a crucial flashpoint in US-China relations. Xi Jinping has declared that ‘reunification’ with Taiwan is inevitable, while American leaders have signalled a willingness to defend the island’s status quo. Political scientist Graham Allison has described these dynamics as a classic Thucydidean rivalry – a structural, ideologically agnostic competition that raises the risk of confrontation.

Since the Second World War, no peer competitor has confronted America head-on, but this could change. Today, and in the foreseeable future, the American military remains preeminent, but the People’s Liberation Army (PLA) is undergoing a rapid modernisation. Coupled with Taiwan’s proximity to China and its remoteness from the United States, these factors put a range of outcomes on the table. America has lost in guerrilla warfare before, in Vietnam and Afghanistan, but it has not been defeated when wielding its full might in conventional warfare against a rival great power and ideological competitor.

For China, success would mean a breach of the encircling ‘first island chain’ and operational freedom in the South China Sea. As a result of such a move, China’s ideological legitimacy and prestige abroad would deepen. US allies in the region – such as Japan, Australia and the Philippines – would likely hedge and negotiate with Beijing, and China would make a significant step towards hegemony in East Asia, the world’s most economically and demographically dynamic region.

America’s wavering position in the international arena could prompt a run on the dollar and sell-off in US Treasuries, setting off a vicious cycle: elevated uncertainty for US leadership would drive interest rate payments upwards, worsening the debt burden and further eroding confidence in America’s global role. The US-built international system of rules, trade and alliances would be eroded with profound consequences for prosperity and national security at home.

Such a scenario would not be unprecedented. America’s failure to protect Taiwan could set off cascading consequences for the US, much as Suez did for Britain.

When Egyptian President Gamal Abdel Nasser nationalised the Suez Canal in October 1956, he knew he was taking a high-stakes gamble. The combined British, French, and Israeli response placed Nasser under acute pressure. Desperate, Egypt sank 40 of its own ships to block Suez, but defeat was only a matter of time.

Then, an unexpected lifeline appeared: Soviet leader Nikita Khrushchev threatened to intervene on Egypt’s side and launch missile attacks on Britain, France and Israel. Meanwhile, US President Dwight D. Eisenhower warned Britain that the United States would use its influence at the IMF to inflict severe financial strain if the British did not withdraw their troops. Pressured by both its strongest ally and chief adversary, Britain backed down and Prime Minister Anthony Eden resigned. Nasser had won.

Between 29 October and 8 November 1956, the Suez operation had been a tactical victory: the British were steadily advancing toward their objectives, bringing the Egyptian armed forces to the brink of collapse. Yet within ten days, Britain fell from being a wartime ‘Big Three’ power to a secondary role in the western alliance and world affairs.

The parallels between Suez and Taiwan are worth exploring.

First, both are deeply intertwined with nationalism. For Nasser, Suez was Egyptian territory meant for Egyptians, not British colonialists. Similarly, Beijing views Taiwan as inseparable from China’s national identity. Second, the United States today faces fiscal constraints similar to those confronted by Britain in 1956. Britain entered Suez with a debt roughly 125 per cent of GDP; the US ratio currently stands at 120 per cent and is trending upwards. Third, both Taiwan and Suez are distant chokepoints with economic and geopolitical importance that exceeds their physical size. In 1956, Suez was Britain’s gateway to the Persian Gulf, Asia and Africa, as well as a vital route for oil shipments overseen by British interests such as the Anglo-Persian Oil Company (later BP). The Taiwan Strait carries a large share of global container traffic, and Taiwan hosts TSMC, the world’s leading advanced-chip producer.

On the other hand, Britain in 1956 – significantly weakened by the Second World War and Indian independence – was far short of US capabilities today. It was also pressured simultaneously by its chief enemy and closest ally, whereas, in a Taiwan scenario Washington would probably find a largely supportive western camp, sharper pushback from revisionist states and ambivalence among nonaligned countries. Finally, Suez carried far lower nuclear risk compared to a crisis between two superpowers with secure second-strike capabilities.

The cases differ but nonetheless point to a cautionary tale about what happens when a powerful state overreaches, pursuing a mission it cannot sustain against rising external pressure and internal fatigue. That was Britain at Suez. It could be America over Taiwan.

Popularised by historian Paul Kennedy, imperial overreach refers to the phenomenon of an empire extending beyond its military and economic capacities, ultimately leading to its decline. When the balance between a state’s capabilities and commitments is breached, overreach exposes the gap – and exacts a cost. At Suez, Britain paid the price.

Should current trends persist, the US risks strategic overextension, maintaining global commitments against adversaries who are now more capable and determined than when those commitments were first made. There are a number of policies that the United States should pursue to prevent the task of defending Taiwan from becoming an act of overreach. They involve making choices as difficult as they are necessary.

First, it is important to double down on alliances. If there is one area where the United States decisively outperforms China, it is in the strategic depth that its global partnerships provide. Across the Quad, AUKUS, and NATO, partners have narrowed tech flows to China and deepened know-how sharing, while offering forward access that expands US operational depth. It is mutually beneficial to strengthen partnerships with allies unsettled by China’s hegemonic bid in East Asia. The aim is a robust web of alliances that deters aggression and provides mutual support.

Second, reduce exposure on other fronts. The United States needs to strategically reassess its hierarchy of priorities: which commitments are vital, which are secondary, and which can be recalibrated. This does not mean some regions are unimportant or should be denied aid altogether – only that others demand greater priority. Matching resources to a clear hierarchy of interests is essential to avoiding overreach.

In this regard, the Middle East should be an economy-of-force theatre with partner-led operations and clear ceilings on US deployments. In Europe, Washington should sustain NATO while shifting more responsibility to European capitals, including on Ukraine, with Washington retaining its coordinating role. The US should assure without overpromising, signalling support and creating contingency plans while declining commitments that would overstretch American power. Overall, its strategic tradeoffs should reflect that the Indo-Pacific is where the world’s strategic and economic centre of gravity has shifted over the past three decades. The more its commitments are aligned with interests, the less likely it is that Taiwan will become a trigger for overreach.

Third, America must rebuild the arsenal of democracy. Recent war games simulating a conflict over Taiwan suggest that the US could exhaust its long-range precision munitions in about a week. In the short term, the US must scale production to sustain its military for at least four weeks of high-intensity operations. Crucially, the US must keep its procurement processes competitive and flexible – minimising bureaucratic drag – and enable venture-backed newcomers to enter and compete on a level playing field with established firms.

In the long term, the US must restore the crucial parts of its industrial capacity in key strategic technologies by becoming a place where things are built quickly, reliably and at scale. That, in turn, requires attracting and retaining the world’s top engineers so the US draws on a global talent pool far larger than any single competitor’s. This can work hand in hand with allies: bring high-value manufacturing back home where feasible, co-produce with trusted partners, and build shared surge capacity.

Then there is the federal debt. As of 2024, interest payments have surpassed military spending, crowding out spending on defence readiness, procurement and research and development. While the debt-to-GDP ratio alone is not too worrisome for the issuer of the world’s reserve currency, structural factors like the costs of an aging population impose a stubbornly upward trend: The Congressional Budget Office projects spending on social security, federal health programmes, and net interest will rise from 14.2 per cent of GDP in 2025 to 19.6 per cent by 2055. Sooner or later, markets will ask the US to prove it can rein in the federal debt.

The US need not run surpluses tomorrow, or even soon, but it must signal a commitment to reverse peacetime deficits exceeding seven per cent of GDP and initiate serious bipartisan talks to address the problem. A credible debt-stabilisation path would lengthen the maturity of federal debt, broaden the tax base and modernise the Internal Revenue Service’s enforcement mechanisms. The underlying issue here is that political polarisation reduces the room for compromise in making hard choices. For those who claim this is impossible, the question remains: for how long can the world’s largest debtor remain the world’s greatest power?

Following Suez, an internally depleted and externally cornered Britain began a sharp descent from global preeminence, manifested in economic stagnation, colonial retraction and a diminished role in global affairs. Sometimes empires resist decline for a long time – and then suddenly succumb to it. Asking whether Britain was right to intervene in Egypt misses the point. Britain’s fate was shaped less by the headline decision at Suez than by the accumulation of choices that left it too weak to sustain its global role. The same lesson applies to the United States. The question is not only whether to defend Taiwan, but whether Washington can align strategic ends with means and avoid overreach.

The US should take heed. Taiwan need not be America’s Suez. Even if it is insoluble, the Taiwan issue is not unmanageable. A strong US remains the most potent guarantee for managing the world’s fiercest rivalry, and its most consequential relationship, and precluding the outbreak of a Chinese-American conflict.