What happened
A potential Chinese blockade of Taiwan could lead to a global economic collapse, with estimated losses of $10 trillion. Chinese leader Xi Jinping has ordered the development of a Taiwan invasion capability by 2027. The US faces a test of resolve, with policymakers urged to take decisive action to deter Beijing.
China has been taking lessons from the Middle East, where Iran has successfully choked off the Strait of Hormuz. A similar blockade of the Taiwan Strait could have catastrophic consequences, including a 5% reduction in global output and a significant impact on the global tech industry.
Taiwan is a crucial player in the global tech industry, producing 92% of the world's most advanced logic chips. A blockade would trigger a global industrial supply shock, with severe economic consequences. The US is being urged to take immediate action to counter Beijing, including pre-positioning military assets, publishing a quarantine-indicator framework, and funding an emergency transfer authority to surge secure communications infrastructure to Taiwan.
