US envoy cautions that Taiwan Strait conflict could cause unprecedented global economic damage
The head of the American Institute in Taiwan, Raymond Greene, said at a defense forum that any war across the Taiwan Strait would have a larger economic impact than World War II. He spoke ahead of an upcoming US-China summit, calling it a chance to prevent miscalculations. Greene emphasized Washington's commitment to preserving peace in the Indo-Pacific through diplomacy and military presence.
Greene delivered his remarks at a Taipei defense forum, emphasizing that the upcoming meeting between Xi Jinping and Donald Trump could serve as a crucial checkpoint to prevent strategic errors. He stressed that Washington's approach combines high-level diplomacy with a strengthened regional military posture.
In response to perceived threats, Taiwan's leadership under William Lai has prioritized military modernization. The island's proposed defense budget for the coming year is set to cross the one trillion Taiwan dollar threshold for the first time, reflecting heightened security concerns.
A conflict in the Taiwan Strait could severely disrupt global supply chains, particularly in semiconductors and shipping, affecting economies worldwide. Businesses and investors may face heightened uncertainty as geopolitical tensions escalate. The upcoming summit could either de-escalate risks or highlight persistent divisions. Regional governments might feel pressured to align with major powers, potentially impacting their domestic stability and economic planning. The warning underscores how localized disputes may carry outsized consequences for international markets and everyday consumers.