US warns Europe a conflict over Taiwan could cause global economic shock

The US has warned European countries that a conflict over Taiwan would trigger a huge global economic shock, in an effort to step up contingency planning amid rising concern about military action in the Indo-Pacific.

The state department has shared research with partners and allies that estimates that a Chinese blockade of Taiwan would spark $2.5tn in economic losses, according to six people familiar with the material, which was commissioned from the research firm Rhodium Group.