Taiwan tensions raise risks in one of busiest shipping lanes

The standoff between the US and China over Taiwan has thrown a spotlight on growing risks to one of the world’s busiest shipping lanes — even a minor disruption could ripple through supply chains.

The Taiwan Strait is the primary route for ships passing from China, Japan, South Korea and Taiwan to points west, carrying goods from Asian factory hubs to markets in Europe, the US and all points in between.

Almost half of the global container fleet and a whopping 88% of the world’s largest ships by tonnage passed through the waterway this year, according to data compiled by Bloomberg.

Any actions over Taiwan that affect the strait would be another blow to global shipping. Supply chains, which have been reeling since the start of the pandemic, have been struggling to recover this year from lockdowns in China’s cities and Russia’s invasion of Ukraine.

The Taiwan Taiex Shipping and Transportation Index slumped as much as 3.2% on Tuesday, among the worst-performing sub-indexes in Taiwan’s benchmark stock index. Taiwanese carrier Evergreen Marine Corp. dropped as much as 3.7%.

Taiwan has long been a flash point between the US and China, and tensions have been exacerbated by US House Speaker Nancy Pelosi’s expected visit on Tuesday. China regards Taiwan as part of its territory and has promised “grave consequences” in response to a visit by the No. 3 US official.

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