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Taiwan risks may eventually catch up with Wall Street

Wall Street doesn’t seem to care what China says about Taiwan these days. Instead, it focuses on what companies are saying about earnings and what the Fed is doing with interest rates. But deteriorating US-China relations over Taiwan could catch up with Wall Street.

Angered by US House Speaker Nancy Pelosi’s visit to Taiwan, China has stepped up its threats over the future of its breakaway province in recent days. For example, in a Global Times article published on Tuesday, Beijing threatened to speed up the process of reunification with Taiwan.

“There are many options on the table for China to speed up the reunification process,” the Post said. “This could include military targets in Taiwan, as the PLA did in the previous cross-strait crisis, enforcing new laws for national reunification, allowing military aircraft and ships into ‘airspace’ and ‘water areas’ controlled by Taiwanese authorities. of the island and the ending of the tacit ceasefire with the Taiwanese military.”

As a manufacturer of technology products designed and developed in the United States, Japan and Europe, Taiwan is at the heart of the global technology supply chain. As a result, rising tensions in the island economy will disrupt the operations of US tech giants and the US economy. And it will raise the prospect of a Russo-Ukrainian conflict that could draw in the US and its allies.

All of these scenarios could wreak havoc on Wall Street, especially the tech giants that rely on Taiwanese companies like Taiwan Semiconductor to manufacture semiconductors.

But traders and investors don’t seem to be paying as much attention to these threats as US stocks trade on economic fundamentals rather than Beijing’s threats about Taiwan.

So why is Wall Street not taking China’s threats seriously? Because there is nothing new. China’s threats and warnings to the US and its allies about Taiwan and the South China Sea are almost daily. They are more intended to intimidate the people of Taiwan and the countries around the South China Sea than anything more serious.

However, Chuck Flint, founder and president of Flint Consulting, with extensive experience on Capitol Hill and in US-China relations, thinks Wall Street should keep an eye on the risks posed by growing tensions between China and China China and the US in relation to Taiwan surrendered. “There are two risks specific to Wall Street tech stocks as a result of escalating tensions over Speaker Pelosi’s visit to Taiwan,” he said International business hours in an email.

“First, Taiwan Semiconductor Manufacturing Company (TSMC) is the most valuable chipmaker in the world as it accounts for over 50% of the global market share. Chips are used in everything from smartphones and medical devices to military applications if TSMC’s operations on Wall Street were hampered by Chinese aggression. The second risk is the long-term public relations damage done to Chinese tech companies. They are increasingly perceived as under Beijing’s thumb, and escalating cross-strait tensions by the CCP will only further diminish their appeal to Wall Street investors.”

And that would no doubt get Wall Street’s attention.


A Wall Street sign in front of the New York Stock Exchange

Photo: Reuters / Carlo Allegri

https://www.ibtimes.com.au/taiwan-risks-could-eventually-catch-wall-street-1837074?utm_source=Public&utm_medium=Feed&utm_campaign=Distribution Taiwan risks may eventually catch up with Wall Street

Fry Electronics Team

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