What Would a War in Taiwan Cost the World?

The global economy would lose $2.5 trillion annually if the conflict surrounding Taiwan escalates, reports the Financial Times (FT).

Sources for the publication indicate that the U.S. State Department has commissioned the Rhodium Group analytical firm to assess the potential economic consequences of a blockade of the island by China.

Analysts have concluded that such actions would deal a significant blow to Taiwan's economy and create a domino effect on global markets. Southeast Asian economies would be the most affected.

Instability would arise in the semiconductor, automotive, server, computer, and mobile phone sectors.

At the same time, Chinese companies would lose the opportunity to attract funding, which would seriously harm the Chinese economy and also lead to a significant shock in global trade.

U.S. State Department representatives have already sent the study's findings to the European Commission and representatives of several European countries to illustrate the significant negative impact of escalation on the EU economy.

American authorities believe that this way they can strengthen international efforts to deter China.

Tensions surrounding Taiwan sharply escalated after U.S. House Speaker Nancy Pelosi's visit to the island on August 2-3, provoking criticism from Beijing.

On November 8, Taiwan’s leader Tsai Ing-wen stated that there is a real threat of invasion from China. She noted that this is no confusion, and authorities must be prepared for such developments.