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Taiwan Strait Conflict Would Be Disastrous, Top US Diplomat Warns — AI-generated representative image: A US diplomat addresses a defence forum in Taipei amid discussion of Taiwan Strait stability.

Editorial Team

US envoy in Taipei says a Taiwan Strait clash would hurt the global economy more than World War II ahead of the Xi Jinping visit to Washington.

The top United States diplomat in Taipei has warned that any conflict across the Taiwan Strait would have a bigger impact on the global economy than World War II, delivering the assessment just weeks before Chinese President Xi Jinping is expected to travel to Washington.

Raymond Greene, director of the American Institute in Taiwan, made the remarks while speaking at a defence forum in Taipei on Wednesday, framing the upcoming US-China summit as an opportunity to avoid misunderstandings and miscalculations.

The warning underscores the high economic and strategic stakes surrounding Taiwan, an island China claims as its own territory but which is governed democratically and rejects Beijing's sovereignty claims. Greene's remarks highlight how a potential conflict in the Taiwan Strait could ripple far beyond the region, affecting global supply chains and the world economy.

His comments come as both Washington and Taipei signal deepening defence cooperation, raising the profile of the Taiwan issue ahead of a high-level meeting between the leaders of the world's two largest economies.

Key Points From the Defence Forum

Greene said there was no topic more timely or important than how to secure peace in the Taiwan Strait, and he outlined three priorities for the United States under the Trump administration.

Preserving peace in the Indo-Pacific has been made one of the top US priorities, including "vigorous" diplomacy especially at the highest levels.
The United States is reinforcing its presence and partnerships in the Asia Pacific to maintain what Greene called a "favourable regional balance of power."
Washington is supporting Taiwan's efforts to enhance its ability to defend itself, which Greene described as especially relevant to the forum's discussion.

US-Taiwan Relations and Regional Tensions

While the United States, like most countries, has no formal diplomatic relations with Chinese-claimed Taiwan, it remains the democratically governed island's most important international backer and arms supplier. This informal relationship, conducted through the American Institute in Taiwan, has long been a source of friction between Washington and Beijing.

Xi Jinping is expected to travel to the United States later this month to meet with President Donald Trump, a summit that Greene described as an opportunity to further advance a relationship of strategic stability based on fairness and reciprocity.

Taiwan's Defence Spending Increase

Taiwanese President William Lai Ching-te's administration has made stepped-up defence spending and military modernisation priorities, citing the threat level from China. The government, which rejects Beijing's claims to the island, has budgeted defence spending for next year to exceed 1 trillion Taiwan dollars, equivalent to about $31.76 billion, for the first time.

"Beyond the human toll, any conflict across the Taiwan Strait would have a bigger impact on the global economy than the second world war," Greene said.

What Comes Next

Attention now turns to the expected summit between Xi Jinping and President Trump later this month. Greene indicated the meeting offers a chance to build strategic stability and reduce the risk of miscalculation between the two powers. No official date for the visit has been confirmed in the available remarks.