President Donald Trump recently signed into law the sweeping $901 billion National Defense Authorization Act (NDAA) for fiscal year 2026. While it covers a wide range of defense and security issues, several provisions have clearly struck a nerve in Beijing.

Under the new framework, U.S. companies and investors must report transactions that support certain high-risk technologies in China or other “countries of concern.” The Treasury Department is also granted new authority to directly block such deals.

Top law firm Latham and Watkins LLP described the new provisions as a reflection of current bipartisan support in Congress for outbound investment screening on national security grounds.

The NDAA also moves to further strengthen U.S. supply chains. It prohibits the Pentagon and intelligence agencies from contracting with Chinese genetic sequencing and biotechnology companies linked to China’s military or security services.

The act permits continued joint military training involving the United States, Taiwan, and regional partners in response to Beijing’s malign influence operations. The act also calls for expanded U.S.–Taiwanese coast guard cooperation and allows the deployment of U.S. military personnel to Taiwan to strengthen maritime security, enhance law enforcement coordination, and deter aggression.

Second, the arms sale reinforces U.S. alignment with Japan. After Japanese Prime Minister Sanae Takaichi said in November that a Chinese attack on Taiwan could constitute an existential threat to Japan—implying potential Japanese military involvement—Beijing reacted sharply with diplomatic pressure, economic retaliation, and military threats.

While Japanese leaders have long acknowledged that “a Taiwan contingency is a Japan contingency,” Beijing has been unwilling to tolerate the open statement of such a notion. By approving an unprecedented arms package for Taiwan, Trump underscored the U.S.–Japan alliance and signaled that Washington stands firmly with its regional allies.

Third, the move serves as a warning to Beijing not to misread U.S. policy through the lens of the Russia–Ukraine war. While Trump has pursued mediation efforts that could be seen as favorable to Moscow, the underlying objective is to end the conflict so the United States can focus its strategic resources on countering China. The Taiwan arms sale makes clear that Beijing should not assume it could emulate Russia’s actions without severe consequences.

Although the new strategy downplays ideological differences and emphasizes economic security, domestic governance, and a more selective global posture, it continues to identify the CCP as the primary strategic adversary. It places unprecedented emphasis on Taiwan and explicitly states that the United States will build a military capable of preventing aggression anywhere along the first island chain.

These developments underscore a key reality. The Trump administration will not allow the Chinese regime to seize Taiwan by force—a challenge that will define Trump’s second presidency. With many analysts viewing 2027 as a potential turning point for Beijing, deterrence is central to Washington’s strategy.

When considered together, the NDAA, the largest-ever Taiwan arms sale, and the National Security Strategy suggest that the United States is not retreating from its stance toward China, which explains why Beijing appears deeply unsettled.