Pacific Weekly #83
Good morning and happy Sunday,
Welcome back to another edition of Pacific Weekly. This one is big!
Reporting Period: January 12-18, 2026
Bottom-Line Up Front:
1. On January 15, the US Department of Commerce announced a trade deal with Taiwan. The deal includes investment in semiconductors, as well as updates to tariff rates. It is the largest trade deal between Taipei and Washington in history.
2. On January 16, the office of Canada’s prime minister confirmed a new strategic partnership with China. The partnership was announced during Carney’s visit to Beijing. It reinforces Canada’s adherence to the One China principle, and lays a framework for enhanced economic, diplomatic, and innovation cooperation.
3. Data analyzed by The New York Times shows how the Chinese Maritime Militia may mobilize in a conflict scenario. Analysts interpret these large-scale maneuvers as a framework for how Beijing could assert control or impose blockades in disputed waters. While not a formal naval blockade, the activity signals China’s ability to quickly organize civilian fleets to influence maritime environments and complicate naval operations.
4. On January 15, 2026, the U.S. House of Representatives confirmed it passed legislation for foreign military financing (FMF) for partners in the Indo-Pacific. The package, outlined by the House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party, allocates several billion dollars in grants, loans, and security support.
Point Of Interest: US Seizes Simulators From South Africa Bound For China
On January 15, the US Department of Justice confirmed that it seized two mission crew trainers (MCTs) from the Test Flying Academy of South Africa on its way to China (DOJ). The DOJ filed two forfeiture actions. The simulators, built under Project Elgar, reportedly mimic the capabilities of the US Navy’s advanced P-8 Poseidon anti-submarine hunting aircraft (DOJ). The delivery and use of the simulators could have significantly advanced China’s anti-surface warfare (ASW) capability.
US, Taiwan Reach Trade Deal
Summary
On January 15, the US Department of Commerce announced a trade deal with Taiwan. The deal includes investment in semiconductors, as well as updates to tariff rates. It is the largest trade deal between Taipei and Washington in history.
Findings
Announcement: On January 15, the US Department of Commerce announced that the American Institute in Taiwan (our de facto embassy there) signed a historic trade deal with the Taipei Economic and Cultural Representative Office in the United States (US Department of Commerce).
Semiconductors: Taiwanese semiconductor entities will make a direct $250 billion investment in American semiconductor, energy, and AI production capacity (US Department of Commerce). Taiwan will also provide $250 billion of credit guarantees for additional investments (US Department of Commerce). The US will build “world-class industrial parks” in the US to strengthen American next-generation technology production and innovation (US Department of Commerce).
Tariffs: The trade deal reportedly establishes a “predictable tariff framework” (US Department of Commerce). Reciprocal tariffs on Taiwanese goods will total no more than 15% (US Department of Commerce). There will be a 0% tariff on pharmaceuticals, aircraft parts, and natural resources (US Department of Commerce).
Why This Matters
The trade deal between Taipei and Washington is a win-win. For Taiwan, it is a basis for long-term stability and legitimacy. The deeper it can integrate its economic interests with the US markets, the more likely Washington is to formalize its interests in Taiwan and form security contingencies.
For the US, the investment helps to secure the semiconductor supply chain, which will hopefully give us the edge in the race for AI and other emerging technologies.
Xi Meets With Carney In Beijing, Both Celebrate New Strategic Partnership
Summary
On January 16, the office of Canada’s prime minister confirmed a new strategic partnership with China. The partnership was announced during Carney’s visit to Beijing. It reinforces Canada’s adherence to the One China principle, and lays a framework for enhanced economic, diplomatic, and innovation cooperation.
Findings
Announcement: On January 16, Canada confirmed it has reached a “new strategic partnership” with China following Prime Minister Carney’s visit to Beijing (Prime Minister of Canada). Carney met with President Xi Jinping, Premier Li Qiang, and Chairman Zhao Leji (Prime Minister of Canada).
Beijing Visit: Following Carney’s meeting with Xi in Beijing, the pair issued a joint statement. Of note, “Canada reaffirmed its long-standing commitment to its One China policy,” suggesting Canada would not enter a conflict to support US-backed Taiwan (Prime Minister of Canada). Carney and Xi, intent on expanding trade and bilateral diplomacy, signed the Canada-China Economic and Trade Cooperation Roadmap (Prime Minister of Canada).
Carney also recognized the China-authored Global Governance Initiative, which would see Chinese revisions to international governance frameworks and institutions (Prime Minister of Canada). The pair signed seven memorandums in total (Prime Minister of Canada).
Why This Matters
The trade framework and strategic partnership are being viewed as Canada’s diversification and shift away from the United States (BBC). Despite Carney calling China Canada’s “biggest security threat” nearly a year ago, he stated that the new partnership with China sets Canada up for “the new world order.”
From a realist perspective, the visit, deals, and memos make sense for Canada, but it leaves room for concern as Carney seems to be opening Canada to Chinese influence and partnership, while distancing itself from traditional Western positions (such as in the United Nations or by supporting Taiwanese sovereignty).
Under Trudeau, Canada had once invited the PLA to Canada for military training and allowed United Front activity in the Chinese diaspora. We may see similar activities in Canada’s future.
Analysis Depicts Mobilization Of Chinese Maritime Militia
Summary
Data analyzed by The New York Times shows how the Chinese Maritime Militia may mobilize in a conflict scenario. Analysts interpret these large-scale maneuvers as a framework for how Beijing could assert control or impose blockades in disputed waters. While not a formal naval blockade, the activity signals China’s ability to quickly organize civilian fleets to influence maritime environments and complicate naval operations.
Findings
Large-Scale Formations: The New York Times analyzed recent data and satellite imagery to observe 1,400 Chinese fishing vessels as they assembled into a formation across 200 miles in the East China Sea (The New York Times). One observed formation reportedly included upwards of 2,000 vessels (The New York Times).
Purpose: The formations are being assessed as acting as maritime barriers, blockades, or naval traffic disruptors (The New York Times). The reporting claims that the maneuvers were consistent with Chinese Maritime Militia (CMM) activities, suggesting the deployment of these vessels during a conflict scenario (The New York Times). These vessels, or the CMM, are not officially listed as military assets, which complicates retaliation.
Why This Matters
This is not new, but the scale and timing as we approach 2027 suggests these tactics will have a significant strategic role during an invasion of Taiwan or during conflict in the Indo-Pacific at large.
China’s ability to mobilize thousands of ostensibly civilian vessels into cohesive maritime formations shows it can shift toward non-traditional methods of controlling seas without overt naval aggression. These formations could be used to hamper foreign military movements, complicate freedom of navigation, or pressure rivals in a crisis over Taiwan or contested islands. If Beijing refines this capability, it lowers the threshold for intense standoffs short of open war, forcing regional partners and the U.S. to rethink how they monitor and respond to “civilian” fleets acting as extensions of state power.
US House Passes Foreign Military Financing, Includes Indo-Pacific Partners
Summary
On January 15, 2026, the U.S. House of Representatives confirmed it passed legislation for foreign military financing (FMF) for partners in the Indo-Pacific. The package, outlined by the House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party, allocates several billion dollars in grants, loans, and security support.
Findings
FMF Allocations: On January 15, the House of Representatives passed legislation to fund the US Department of State and Department of the Treasury (Select Committee on the CCP). The legislation includes:
$2.3 billion in grants and loans for Taiwan.
$100 million in financing for the Philippines.
$400 million for the “Countering PRC Influence Fund.”
$35.9 million for the American Institute in Taiwan (our de facto embassy).
$4 million to the US-China Economic and Security Review Commission on China.
Why This Matters
This legislation marks a notable expansion of U.S. security assistance to key Indo-Pacific partners at a time of sustained Chinese military assertiveness. Providing significant FMF to Taiwan and the Philippines strengthens allied defensive capabilities and sends a clear signal of U.S. commitment to regional deterrence. The inclusion of funding for counter-PRC influence efforts also acknowledges that competition with China extends beyond conventional military balance to economic and informational domains. By embedding these priorities in a broader appropriations bill, Congress is formalizing support that aligns U.S. foreign aid with strategic competition in the Indo-Pacific. Finally, this step increases pressure on China by demonstrating that U.S. partners will receive concrete support short of direct military intervention, which could alter Beijing’s risk calculations.
End Brief
That concludes this edition of Pacific Weekly.
Thank you for reading!
— Nick
This publication is an Open-Source Intelligence (OSINT) product and does not contain Controlled Unclassified Information (CUI) or Classified Information.