China Attack On Taiwan Would Shatter Global Economy: Yahoo Finance
Russia’s invasion of Ukraine this year has roiled global energy markets and caused food shortages in some parts of the world.
Photo Insert: The Taiwanese Army conducting drills
The disruptions could intensify during the winter, with soaring energy costs causing a recession in Europe and weakening the economies of the US and many other nations. A broader and more devastating conflict remains possible, Yahoo Finance senior columnist Rick Newman warned.
A war involving China would be orders of magnitude worse. House Speaker Nancy Pelosi’s recent visit to Taiwan enraged China’s communist government, which has launched missiles over the island and conducted threatening military exercises meant to remind the world that China plans to annex Taiwan someday, whether peaceably or by force.
If that involved armed conflict, it would probably cause more damage to the world economy and global markets than any military confrontation since World War II. Unlike Russia or Ukraine, China’s powerhouse manufacturing sector is deeply linked with economies everywhere, including the US and Europe.
The seas around China and Taiwan are some of the busiest shipping lanes in the world.
Wartime disruption of all that commerce would be devastating. Before Russia’s invasion of Ukraine, for instance, US trade with Russia was $36 billion per year. Trade with Ukraine was $4 billion per year, for a total of $40 billion in direct trade jeopardized by the war.
US trade with China is $656 billion per year, including imports of consumer products in every American home and components in many goods assembled in the US.
American trade with Taiwan is $114 billion, and that includes some of the world’s most advanced semiconductors. Combined, US trade with China and Taiwan is 10 times US trade between Russia and Ukraine, and it involves products far more crucial to the US economy.
The same interdependencies exist between China, Taiwan, and most of the world’s advanced economies.