The US has warned European countries that a conflict over Taiwan would trigger a huge global economic shock, in an effort to step up contingency planning amid rising concern about military action in the Indo-Pacific.
The state department has shared research with partners and allies that estimates that a Chinese blockade of Taiwan would spark $2.5tn in annual economic losses, according to six people familiar with the material, which was commissioned from the research firm Rhodium Group.
The stark warning has been shared with European Commission and European government officials, as the US and partners begin to think about how they could use sanctions against China over any military action against Taiwan. Washington is using the report to stress to European countries that a Taiwan conflict would have significant implications for them.