The leak of the Pentagon’s classified “Overmatch Brief” has produced a familiar reaction. Headlines announce that China would defeat the United States in a war over Taiwan. Pundits conclude that American deterrence has failed. Some urge accommodation. Others demand vast new military spending. Both responses misunderstand what the assessment actually shows, and more importantly, what it does not. The central mistake is confusing the ability to impose costs with the ability to win a war. China may be able to seize Taiwan, an island roughly 100 miles from its coast. That does not mean China can win a war with...