Supply Chain Diversification and Resilience Policies in the EU and Taiwan Under Global Economic Pressures

The contemporary global economic order is undergoing a paradigm shift from liberal trade rules toward protectionism and economic security. High fragmentation in high-tech sectors and dependencies within global value chains have become systemic vulnerabilities, often utilized as tools for political and economic coercion. Exposed by the COVID-19 pandemic, the war in Ukraine, and the escalating US-China rivalry, these vulnerabilities threaten the stability of economic development and social well-being. The central problem addressed is how state-level policies can effectively reduce these external dependencies and improve systemic resilience in highly integrated high-tech economies. This paper identifies and compares the specific practices, resources, and mechanisms employed by the European Union and Taiwan to strengthen their supply chains. By analyzing these two distinct entities, the study aims to determine which policy solutions mitigate economic coercion and which factors determine the success of diversification strategies in different geopolitical contexts. The study utilizes Program Theory to assess the transition from allocated resources (inputs) through specific actions to their resulting outcomes and systemic changes. Furthermore, it employs a "most different systems" comparative approach. This method allows for the identification of universal patterns of resilience by comparing the EU - a large-scale regulatory and economic union - with Taiwan - a technologically specialized island state. The analysis processes a wide array of qualitative and quantitative data, including, strategic and legislative documents (e.g. The EU’s Critical Raw Materials Act, Chips Act, and the Internal Market Emergency and Resilience Act (IMERA)), institutional data (e.g. reports from Taiwan’s Ministry of Economic Affairs and the Industrial Technology Research Institute), investment figures, trade statistics, individual in-depth interviews with supply chain stakeholders. The research argues that while both entities utilize state interventionism as a shield against coercion, they follow fundamentally different strategic paths. The EU is constructing a "regulatory fortress" focusing on regional reindustrialization (near-shoring) and internal raw material sovereignty. In contrast, Taiwan is weaving a "security net" by maintaining its most advanced technological core on the island while dispersing geographical risk through friend-shoring investments in allied jurisdictions like the US, Japan, and Germany. Comparing the EU and Taiwan demonstrates that while their paths to resilience run along different paths, in both cases the core of their strategies is expanding economic options and realizing operational readiness. The study also has some limitations: Some mechanisms are still in the implementation phase, which limits the ability to rigorously evaluate quantitative effects.