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In this analysis
US officials increasingly describe a Taiwan conflict in economic terms: a shock so severe that it would dwarf ordinary recessions and disrupt the technological foundations of the global economy. That is true, and not sufficient reassurance.
What happened
Reuters reported that the de facto US ambassador in Taipei warned a cross-Strait conflict would be disastrous, while Taiwan continues increasing defence spending and Beijing maintains its sovereignty claim.
The argument
Mutual economic pain can deter rational actors, but security dilemmas are powered by different calculations: credibility, identity, military windows and fear of future weakness. The fact that a war would be ruinous does not make it impossible.
The strongest counterargument
Deep interdependence, nuclear risk and the scale of semiconductor disruption all create powerful incentives for restraint. Leaders know they would inherit chaos rather than a clean victory.
What happens next
Deterrence will depend on military balance, crisis communication and whether Washington and Beijing can prevent symbolic political disputes from becoming tests of resolve.
Editorial note
This article separates sourced reporting from analysis. The factual record is linked below; judgments and conclusions are State & Power's editorial analysis.