Bloomberg Column: If Taiwan Strait is Blockaded, Global Impact Would Be Unbearable
A Bloomberg column warns that a Chinese blockade of the Taiwan Strait would disrupt 90% of the world's advanced semiconductors, potentially causing over $10 trillion in global economic damage and devastating tech industries worldwide.
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- 📰 Published: April 17, 2026 at 18:49
- 🔍 Collected: April 17, 2026 at 19:01 (12 min after Published)
- 🤖 AI Analyzed: April 18, 2026 at 21:59 (26h 57m after Collected)
Central News Agency
(CNA Reporter Hong Qi-yuan, Taipei, 17th) As US and Israeli strikes on Iran and Tehran's blockade of the Strait of Hormuz disrupt global energy supplies and impact the economy, Bloomberg News reports that if China were to blockade the Taiwan Strait, the global consequences would be almost unimaginable.
Bloomberg columnist Karishma Vaswani wrote that while the blockade of the Strait of Hormuz hurts the global economy, one should imagine a similar crisis in the Taiwan Strait. Governments and businesses should prepare for such a scenario in advance. If the Taiwan Strait is blockaded, the flow of about 90% of the world's advanced semiconductors would be cut off, which is critical for industries ranging from Artificial Intelligence (AI) and smartphones to automobiles and military systems.
China is observing how Iran and the US "weaponize" the Strait of Hormuz while weighing Beijing's options regarding Taiwan.
The situations in the Taiwan Strait and the Strait of Hormuz are not entirely identical; geographically, it is wider, allowing ships to seek alternative routes. However, its status in global maritime trade and the chip supply chain cannot be underestimated. Even a limited disruption would be enough to cause a ripple effect across the global economy.
Although the People's Liberation Army (PLA) has not ruled out a full-scale invasion of Taiwan, most strategic experts believe Beijing is more likely to pressure Taiwan through a blockade or a "quarantine" that unilaterally sets conditions for entering and exiting Taiwan, thereby avoiding the risks of an all-out war.
If Beijing decides to blockade or implement a quarantine on the Taiwan Strait, the impact would be hard to estimate. A 2022 report by the US think tank Rhodium Group pointed out that, even without considering the international community's reaction, a blockade of the Taiwan Strait alone could cost the global economy over $2 trillion (about NT$63 trillion).
A February report by Bloomberg Economics estimated that if a full-scale conflict broke out between the US and China over Taiwan, the global economy could suffer a $10.6 trillion loss in the first year alone, accounting for about 9.6% of the global GDP. This far exceeds the financial damage caused by the COVID-19 pandemic and the 2007-2009 financial crisis.
Vaswani stated that if the Taiwan Strait is blockaded, everyone would suffer, and China would not be immune. Taiwan is China's fifth-largest trading partner and a crucial supply base for China's electronics and manufacturing industries. Any blockade orchestrated by Beijing would not only isolate Taiwan from global markets but also make it difficult for China to acquire key components, posing a substantial challenge to its own economy.
However, Xi Jinping's calculations go beyond economics. Taiwan's existence challenges the narrative of the Chinese Communist Party's governing legitimacy and raises an uncomfortable question: If Taiwan can balance economic success with political freedom, why can't mainland China? This explains why Beijing continues to escalate pressure on Taiwan.
The article notes that China's frequent military exercises around Taiwan are not just military drills, but psychological deterrence tactics aimed at exhausting Taiwan and convincing its people that unification is an unstoppable force.
The risk of the Taiwan Strait facing a blockade or similar disruption is no longer a distant possibility. Preparing for this will require a fundamentally different mindset. The US and its allies must be ready to counter PLA pressure and withstand the subsequent economic shocks.
At the end of the article, Vaswani quoted from a new book by China researcher Eyck Freymann, stating that the US should coordinate with Taiwan and other allies to draft economic contingency plans to ensure the flow of critical supplies. For Taiwan, the top priority is resilience, both militarily and for civilian life. Taiwan also needs to strengthen its defenses while ensuring energy and other critical supplies can successfully arrive despite the pressure of a blockade.
The events in the Strait of Hormuz show that global choke points can be weaponized in a very short time, bringing severe global consequences. If passage through the Taiwan Strait is obstructed, the consequences will likely be equally uncontrollable. (Translated by: Hong Qi-yuan) 1150417
(CNA Reporter Hong Qi-yuan, Taipei, 17th) As US and Israeli strikes on Iran and Tehran's blockade of the Strait of Hormuz disrupt global energy supplies and impact the economy, Bloomberg News reports that if China were to blockade the Taiwan Strait, the global consequences would be almost unimaginable.
Bloomberg columnist Karishma Vaswani wrote that while the blockade of the Strait of Hormuz hurts the global economy, one should imagine a similar crisis in the Taiwan Strait. Governments and businesses should prepare for such a scenario in advance. If the Taiwan Strait is blockaded, the flow of about 90% of the world's advanced semiconductors would be cut off, which is critical for industries ranging from Artificial Intelligence (AI) and smartphones to automobiles and military systems.
China is observing how Iran and the US "weaponize" the Strait of Hormuz while weighing Beijing's options regarding Taiwan.
The situations in the Taiwan Strait and the Strait of Hormuz are not entirely identical; geographically, it is wider, allowing ships to seek alternative routes. However, its status in global maritime trade and the chip supply chain cannot be underestimated. Even a limited disruption would be enough to cause a ripple effect across the global economy.
Although the People's Liberation Army (PLA) has not ruled out a full-scale invasion of Taiwan, most strategic experts believe Beijing is more likely to pressure Taiwan through a blockade or a "quarantine" that unilaterally sets conditions for entering and exiting Taiwan, thereby avoiding the risks of an all-out war.
If Beijing decides to blockade or implement a quarantine on the Taiwan Strait, the impact would be hard to estimate. A 2022 report by the US think tank Rhodium Group pointed out that, even without considering the international community's reaction, a blockade of the Taiwan Strait alone could cost the global economy over $2 trillion (about NT$63 trillion).
A February report by Bloomberg Economics estimated that if a full-scale conflict broke out between the US and China over Taiwan, the global economy could suffer a $10.6 trillion loss in the first year alone, accounting for about 9.6% of the global GDP. This far exceeds the financial damage caused by the COVID-19 pandemic and the 2007-2009 financial crisis.
Vaswani stated that if the Taiwan Strait is blockaded, everyone would suffer, and China would not be immune. Taiwan is China's fifth-largest trading partner and a crucial supply base for China's electronics and manufacturing industries. Any blockade orchestrated by Beijing would not only isolate Taiwan from global markets but also make it difficult for China to acquire key components, posing a substantial challenge to its own economy.
However, Xi Jinping's calculations go beyond economics. Taiwan's existence challenges the narrative of the Chinese Communist Party's governing legitimacy and raises an uncomfortable question: If Taiwan can balance economic success with political freedom, why can't mainland China? This explains why Beijing continues to escalate pressure on Taiwan.
The article notes that China's frequent military exercises around Taiwan are not just military drills, but psychological deterrence tactics aimed at exhausting Taiwan and convincing its people that unification is an unstoppable force.
The risk of the Taiwan Strait facing a blockade or similar disruption is no longer a distant possibility. Preparing for this will require a fundamentally different mindset. The US and its allies must be ready to counter PLA pressure and withstand the subsequent economic shocks.
At the end of the article, Vaswani quoted from a new book by China researcher Eyck Freymann, stating that the US should coordinate with Taiwan and other allies to draft economic contingency plans to ensure the flow of critical supplies. For Taiwan, the top priority is resilience, both militarily and for civilian life. Taiwan also needs to strengthen its defenses while ensuring energy and other critical supplies can successfully arrive despite the pressure of a blockade.
The events in the Strait of Hormuz show that global choke points can be weaponized in a very short time, bringing severe global consequences. If passage through the Taiwan Strait is obstructed, the consequences will likely be equally uncontrollable. (Translated by: Hong Qi-yuan) 1150417