Trump is backing away from defending Taiwan, which is bad news for Taiwan and good news for China.

• Trump refused to say if the US would defend Taiwan from a Chinese attack and is holding back billions in approved weapons.
• He said he does not want to travel 9,500 miles to fight a war and sounded sympathetic to China's claim on the island.
• This breaks Reagan-era promises that the US would arm Taiwan without asking Beijing's permission, weakening future presidents too.
• There may be a quiet trade: China stays out of Iran while the US looks the other way on Taiwan.
• US forces are stretched thin from the Iran conflict and ships off Venezuela, leaving little muscle to defend Taiwan if China moves.

Outlook: China will likely keep tightening pressure on Taiwan through patrols and political allies rather than invade, but the risk of a military grab is higher than it was a month ago.