A Bloomberg report warns that a blockade of the Taiwan Strait could disrupt about 90% of the world’s advanced semiconductors, impacting global economies and major tech sectors like AI, smartphones, autos, and defense.

Beyond economics, Taiwan’s thriving democracy and economic success challenge Beijing’s narrative, affecting risk assessments amid rising tensions.

Analysts say economic pressure scenarios such as blockade, quarantine, or inspection regimes are more likely than a full invasion due to lower military risk, though they would still cause substantial economic damage.

Experts urge governments and companies to prepare crisis-response plans, bolster supply-chain resilience, and ensure the uninterrupted flow of critical goods as disruption risks rise.

Earlier estimates put potential losses from a blockade at over $2 trillion when considering international reactions, with China also suffering economically as Taiwan is a major trading partner and electronics supplier.

The Taiwan Strait sits at the heart of global trade and tech supply chains; even limited disruption would quickly impact global production and financial markets.