Five Hidden Landmines for Asia-Pacific Businesses Under NDAA FY2026

Over the past two days, China’s military conducted large-scale “Justice Mission 2025” drills around Taiwan, drawing intense international media attention and renewed geopolitical anxiety. For many executives, the instinctive response is familiar:

This is a political or military issue. It doesn’t directly affect our business.

Under NDAA FY2026, that assumption is increasingly dangerous.

With U.S. national security policy now tightly intertwined with commercial activity, capital flows, and supply chains, regional military actions in the Asia-Pacific no longer remain abstract geopolitical events. They are rapidly translated into policy pressure, financial scrutiny, and operational risk.

Below are five hidden landmines that many Asia-exposed businesses are already standing on, often without realizing it.

Landmine 1）Treating Taiwan Risk as “Uncontrollable” Instead of Manageable

Many boards quietly assume that if a Taiwan crisis escalates, the impact will be systemic and unavoidable for everyone.

This assumption is wrong.

Under NDAA FY2026, the key differentiator is not whether a conflict occurs, but whose business structure becomes vulnerable first.

In periods of heightened tension:

• Some companies face early banking restrictions

• Some are pressured to “de-risk” before any shots are fired

• Others lose financing or transaction optionality well in advance of conflict
  

Geopolitical risk is no longer binary. It is structural.

Landmine 2）Underestimating the Amplification of Indirect China Exposure

Many companies believe they have already “de-risked from China”:

• No China subsidiary

• No China customers

• No manufacturing facilities in China

Yet hidden exposure often remains:

• Tier-2 or Tier-3 suppliers in China

• China-linked investors or minority shareholders

• Software development, data processing, or technical cooperation in Asia

Under NDAA FY2026, indirect exposure is increasingly treated as material exposure, especially during periods of geopolitical escalation.

What was once invisible can become highly visible overnight.

Landmine 3) Confusing “Operationally Viable” with “Politically Acceptable”

After military drills or geopolitical shocks, executives often reassure themselves with a simple metric:

Our supply chain is still functioning.

Under NDAA logic, this metric is incomplete.

The more relevant questions are:

• Will this supply chain remain acceptable to banks, insurers, and regulators?

• Will government customers or strategic partners reassess risk?

• Will political pressure force restructuring even if operations remain intact?
  

Operational viability does not guarantee political sustainability.

Landmine 4) Capital and Banking Risk Arrives Before Operational Disruption

History shows that financial pressure precedes physical disruption.

Under NDAA FY2026, combined with heightened Taiwan-related tension, companies are already seeing:

• Enhanced KYC and country-risk reviews

• More aggressive due diligence by lenders and investors

• Delays or renegotiation of financing terms

• M&A transactions paused “pending further clarity”
  

Many companies do not fail because operations stop. They fail because capital access tightens first.

Landmine 5) Boards Ask “Are We Compliant?” Instead of “How Many Options Remain?”

This is the most common and most dangerous blind spot.

Compliance is no longer a sufficient question.

The correct board-level question is:

If geopolitical pressure increases further, how many strategic options do we still have?

This includes:

• Supply chain substitution flexibility

• Ownership or governance adjustability

• Financing and settlement continuity

• Exit, isolation, or contingency pathways
  

Compliance without optionality is temporary comfort.

What the “Justice Mission 2025” Drills Really Represent

These drills are not an isolated military signal. They function as a stress test for:

• Policy reaction speed

• Capital market sensitivity

• Corporate structural resilience
  

Under NDAA FY2026, geopolitical events are no longer filtered slowly into business risk. They are translated almost immediately.

A Final Warning for Boards and Executives

The greatest danger is not conflict itself, but assuming risk does not apply until it is unavoidable.

Companies that surface and manage structural risk early retain control. Those that wait often discover their options shrinking under pressure.

In today’s environment, Asia-Pacific exposure is no longer just an operational decision, it is a board-level risk question.