# U.S. envoy: investors overpricing Taiwan conflict risk

> Michael DeSombre says markets are overestimating the chance of war across the Taiwan Strait, citing U.S. and Chinese deterrence.
- Title: U.S. envoy: investors overpricing Taiwan conflict risk · CNBC
- Summary: Michael DeSombre says markets are overestimating the chance of war across the Taiwan Strait, citing U.S. and Chinese deterrence. The U.S. assistant secretary…
- Keywords: michael desombre, taiwan, china, united states, military deterrence, tsmc, semiconductor manufacturing, business, finance, envoy, investors, overpricing
- Source: CNBC — https://cnbc.com/2026/10/09/taiwan-trump-china-militia-boat-tsmc-.html
- Author: Anniek Bao
- Published: 2026-10-09T01:10:47+00:00
- Read time: 1 min
- Topics: michael desombre, taiwan, china, united states, military deterrence, tsmc, semiconductor manufacturing, business, finance
## U.S. diplomat says markets mispricing Taiwan
Michael DeSombre, U.S. assistant secretary of state for East Asian and Pacific affairs, told CNBC investors are overestimating conflict risk across the Taiwan Strait.

> I actually think the most mispricing is with regard to Taiwan, where actually I think people are overpricing the risk of something happening across the Taiwan Strait.
## DeSombre: deterrence will prevent conflict
Both China and the U.S. do not want conflict and are able to deter it, DeSombre said. Concerns about Taiwan are priced at too high a level.

> Both China and the U.S. don't want conflict, and we're able to deter conflict.
## Beijing's twenty twenty-seven timeline unconfirmed
The U.S. government has indicated Beijing's directive for the People's Liberation Army to be ready for military action in Taiwan by twenty twenty-seven, though Beijing has never publicly confirmed this timeline.
## Xi is rational, DeSombre argues
Asked about plans to reunify Taiwan by twenty twenty-seven, DeSombre said Xi is a very rational actor who will realize it cannot be done without substantial consequences.

> To the extent that he realizes that it can't be done, or it can't be done without substantial consequences, it won't happen.
## China increases military presence near Taiwan
Beijing has sought to solidify its military presence near the island. A Chinese military boat was spotted with two vessels off Taiwan's Pacific coast for the first time in August.
## Taiwan's chip industry at stake
Taiwan is the world's leading manufacturer of cutting-edge computer chips. TSMC, the world's largest contract chipmaker, has invested tens of billions of dollars in facilities in Phoenix.
## Key takeaway

The U.S. assistant secretary of state for East Asian and Pacific affairs says investors are overestimating conflict risk in Taiwan, arguing deterrence will prevent Beijing from acting by twenty twenty-seven.