US warns of economic disaster if China invades Taiwan

The takeover of chip manufacturer TSMC in the event of a Chinese invasion of Taiwan would result in a disaster for the US economy, US Commerce Secretary Gina Raimondo said during a speech in the House of Representatives, as quoted by REUTERS .

When asked about the consequences of a possible Chinese invasion, Raimondo noted that they would be “absolutely devastating.”

“The United States now purchases 92% of its advanced chips from TSMC,” explained the HEAD of the Ministry of Commerce.

In April, the United States announced the allocation of $6.6 billion to the American division of TSMC for the construction of factories in Arizona, as well as loans of $5 billion. In return, the Taiwanese company agreed to increase investments in its American enterprises from $40 billion to $65 billion and build a third plant in Arizona by 2030 . At one of the factories, TSMC will produce the most advanced 2-nanometer chips. Production is expected to begin in 2028.

TSMC is the main supplier of semiconductors to Nvidia and APPLE .

In March, Reuters noted that Chinese Prime Minister Li Qiang, speaking at the National People's Congress, omitted the phrase "peaceful reunification" with Taiwan, which he called for last year. This time, Li Qiang said that Beijing “will be firm in promoting the cause of Chinese reunification,” and used the usual formulation that the PRC will “resolutely oppose Taiwan independence.” Beijing in 2024 decided to increase its military spending by 7.2%, to a record $231 billion.

CHINA considers Taiwan its inalienable territory and regards any external support for the island's authorities, including visits by foreign delegations, as a violation of Chinese sovereignty.

Taipei, which declared its independence in 1949, strongly rejects the “one country, two systems” model that Beijing has promoted since the 1980s.

The United States, on the one hand, does not recognize Taiwan as an independent state, but on the other hand, it opposes Beijing’s threats to return the island by force and provides it with military support.

Taipei responded by calling on Beijing to “recognize the objective fact that neither side of the Taiwan Strait belongs to the other, abandon inflexible political thinking, and create favorable conditions for healthy and orderly exchanges and friendly interaction between the two sides of the Taiwan Strait through communication and dialogue without preconditions.” "

BLOOMBERG noted in January that a possible war over Taiwan could cost the world $10 trillion, which corresponds to about 10% of global GDP. In the event of a Chinese attack on the island and the participation of the United States in the conflict, which promised to defend Taiwan, the consequences for the global economy will be much more serious than from military actions in Ukraine and covid , Bloomberg pointed out.