China just proved it doesn't need to fire a single bullet to bring Taiwan to its knees...
The superpower has long wanted to bring Taiwan back into its orbit. For years, experts have warned that it might do that through force.
And with just the 110-mile-wide Taiwan Strait between the two, the threat of a Chinese invasion is never far away.
Maybe you're picturing Chinese forces crossing the Taiwan Strait, then storming the island under a hail of missile fire. That could happen...
But that's not the only strategy in China's playbook.
It only needs to severely cripple the island – not subdue it. And it's taking steps in that direction...
China regularly patrols the Taiwan Strait, and it even simulated a blockade of the island last December. In its latest maneuvers, the Chinese coast guard and other ships expanded their operations around eastern Taiwan, the side farthest from the mainland... effectively encircling the island.
Taiwan's coast guard reported a record 244 sightings of vessels from the Chinese government in July – 4 times the number of sightings from the same time last year.
So far, China's armed forces haven't boarded any ships headed to Taiwan. But they have pressured merchant vessels to provide information about when they're entering and leaving Taiwanese ports.
China's coast guard answers directly to the nation's military commanders – it's not a civilian police force. So by ramping up its presence in the waters surrounding Taiwan, China is escalating toward a full maritime blockade.
That would be catastrophic for Taiwan.
You see, as an island nation, Taiwan imports nearly all its energy, including massive shipments of natural gas. A blockade would crush Taiwan's power grid and place immense economic pressure on Taipei.
And the fallout wouldn't stop at Taiwan's borders...
Taiwan is responsible for more than 90% of the world's advanced semiconductor chips. A prolonged disruption would send shockwaves through global supply chains for automobiles, electronics, AI, and even military equipment.
The U.S. can't allow that. Plus, it has previously committed to helping Taiwan defend itself. But American naval forces are already stretched thin by the conflict in the Middle East.
Fighting or deterring multiple threats at once requires immense scale. And the U.S. Navy isn't the fleet it once was.
At the start of last year, the Navy only had 296 battle-force ships. China had more than 370.
Washington recognizes this vulnerability.
To reclaim U.S. maritime dominance, Congress and defense planners are pushing for a massive naval expansion. This includes plans for a 450-ship fleet by 2031.
Money is going to flow into the shipbuilding industry in the coming years and decades. That's inevitable as tension builds in the Pacific.
The White House requested $65.8 billion in the 2027 fiscal year for shipbuilding, up 57% from fiscal 2026.
This should get investors excited...
Investing in a shipbuilder is a logical way to play this. But building warships is a low-margin, capital-intensive business.
My friend and colleague Joel Litman at our corporate affiliate Altimetry knows a better way to take advantage...
You see, every warship depends on thousands of specialized components. So the smaller companies making these them will earn a lot of money in the coming years.
These businesses aren't household names. And because they're so small, they have far greater upside than the massive shipbuilding companies. As trillions of dollars flow into America's defense systems, these stocks could see the largest gains.
Today is the last day to hear Joel's presentation on this fleeting opportunity. Click here to learn more.
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Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
September 30, 2026