Why are Donald Trump’s prices all about Taiwan

In a world already shaken by economic shocks – from the pandemic to radical prices – there is a scenario that would eclipse them all: a Chinese invasion of Taiwan.

It is the hypothetical Ben Thompson floats in the last edition of Stratechery, a newsletter widely followed by initiates of the technological industry.

An invasion would not only be a military conflict; It would be a systemic rupture in the global economic order which underlies everything, from iPhones to inflation forecasts.

Thompson believes that China would prevail militarily. The greater history does not concern which controls Taipei – it is what is happening when the most essential supply chains in the world are broken. Taiwan is not just any island; It houses TSMC, the company responsible for the manufacture of the most advanced semiconductors of the land. Remove this and the curls of the modern technological ecosystem – by taking the digital infrastructure of daily life.

This is so important that there is even a theory quietly discussed among global security experts that Taiwan could threaten to destroy his giant chips factory as a means of dissuading China from invigorating.

Thompson argues that, no matter who wins militarily, the economic result is the same: China, the world factory, is actually cut. The release of the Taiwan chip disappears. Global trade is decreasing. Inflation increases. Market tank.

Remember that the chaos of the supply chain covers 2020 or the agitation of the Trump’s pricing barrage last week – now magnifies this impact in an exponential way.

“A war against Taiwan,” wrote Thompson on Monday, “would be ashamed of all these elements.”

Related stories

Business Insider tells the innovative stories you want to know

Business Insider tells the innovative stories you want to know

Is war the only answer to reset the system?

Of course, it is not clear if or when, China would invade Taiwan. And even if that invades, he would be confronted with challenges, according to the defense writer Michael Peck.

But what is particularly striking is Thompson’s framing: war might not just break the system – it could be the only means of reset he. The economic order of the post-second world war, restarted by Bretton Woods and supervised by the entry of China into the world markets, shows its age. The United States has exchanged industrial capacity for cheap products and hot air balloon deficits. American manufacturing jobs have disappeared, elongated supply chains and the economic resilience of the American Heartland has widened. (These are the areas where the anti-worldization message of JD Vance really resonates, by the way.)

Trump’s prices – clumsy, politically dividing and economically painful – could always be preferable to wait for a war forces change. As Thompson notes, the current system cannot be fixed without stomach for hard compromises, and America does not seem to want to take the blow until it is forced.

We therefore return to the question of Taiwan – if China invades, or how much we come. The careful path, suggests Thompson, can be to bring China closer to economic interdependence, bets sharing prosperity can delay or prevent disasters. But if this bet fails, the cost will not only be measured in GDP – it will be in decades of lost stability, broken industries and a new world order forged not in peace, but in fire.