A conflict over the Taiwan Strait could have significant implications for the global economy, according to a report by the Center for Strategic and International Studies (CSIS), a Washington-based think tank. The report, published on October 10, highlighted the lack of publicly available estimates of trade flows through the Taiwan Strait prior to its publication. Using a unique methodology, researchers found that in 2022, the strait accounted for more than one-fifth of global Beijing's Actions in South China Sea”>maritime trade
, equivalent to approximately $2.45 trillion.The researchers emphasized the immense importance of the Taiwan Strait to international commerce and warned about potential economic consequences if Beijing were to use force against Taiwan. They stressed that maintaining cross-strait stability is crucial for safeguarding international trade and called on Washington to work closely with allies and partners in this regard.
China’s communist regime has been threatening to seize Taiwan under its belief that it is a renegade province that should be united with mainland China. In March, Adm. John Aquilino, former head of U.S. Indo-Pacific Command, stated his belief that China would be ready to invade Taiwan by 2027.
The CSIS report also highlighted how a conflict in the strait would disrupt shipping routes and lead to delays and price increases for consumers worldwide. It revealed that China was most dependent on the strait among all countries studied, with approximately $1.3 trillion worth of goods passing through it in 2022.
Japan and South Korea were identified as two key U.S. allies most affected by disruptions in the strait based on their trade data from 2022. Japan relied on the strait for 25 percent of its exports and 32 percent of imports amounting nearly $444 billion while South Korea depended on it for 23 percent of exports and 30 percent of imports totaling around $357 billion.
Australia was also deeply reliant on the strait in terms of exports; nearly 27 percent or $109 billion worth passed through it in 2022—83 percent being iron ore, coal, and liquefied natural gas.
The CSIS report further analyzed different scenarios where Beijing could impose either a quarantine or blockade against Taiwan using its Coast Guard vessels or stopping imports such as oil, natural gas, or coal respectively.
In addition to Asian countries like Japan and South Korea heavily relying on this vital waterway for their trade needs last year; BRICS nations (excluding China), Oman Saudi Arabia Iraq Kuwait Qatar Yemen all utilized it significantly too; G7 nations like Japan topped users list followed by United States which had billions worth going through this route last year; African countries including Democratic Republic Congo Gabon Eritrea Angola were top users too according to CSIS’ findings.