New York Times: Sanctions on China will be devastating to the world
China’s recent military exercises around Taiwan highlight the risk of a breakdown in U.S.-China relations, according to the New York Times.
The New York Times believes that the possibility of China invading Taiwan could lead to a global economic crisis that exceeds the effects of the Corona pandemic, according to a report issued by a committee in the US House of Representatives, which indicates the United States’ lack of an emergency plan to confront the economic repercussions of a potential conflict with China.
The New York Times called on the next US administration, in cooperation with Congress and allies, to develop a clear plan to confront any crisis related to Taiwan, to avoid exposing allies such as Japan, South Korea, Australia and the Philippines to economic coercion.
The New York Times notes that comprehensive economic sanctions against China could be devastating to the global economic system, given China’s central role in supply chains.
The New York Times’ warnings come as voices are rising calling on Washington to develop a positive vision to confront any crisis related to Taiwan, including coordination with central banks to provide liquidity during crises, and the establishment of an economic security cooperation council to support member states.
Likewise, the United States and its allies should work to secure the vital products they depend on from China, and take gradual steps to reduce dependence on non-vital Chinese goods.
According to the New York Times, this vision won’t be easy to implement, given the possibility of Chinese responses, including the punishment of foreign companies operating in China.
However, building a comprehensive economic security framework will be an effective defense against disruption to trade and financial markets.
Congressional hearings should be held on the economic impact of any potential confrontation over Taiwan, and legislation should be put in place to be implemented in the event of a crisis.
