How Tsmc and US-China Tensions May Dictate Fate of Global Economy

The effects of such a halt would be "economically devastating," says Martijn Rasser, a former senior intelligence officer at the CIA who is now a security and technology expert at the Center for a New American Security, a left-leaning think tank.

"You'd be looking at trillions of dollars in economic losses," he told Insider. The US National Security Council agrees, and in July the US commerce secretary said the US would face a "deep and immediate recession" if American businesses no longer had access to these chips.

Some experts have speculated that, in the event of an invasion, the chip-manufacturing facilities would be intentionally destroyed so China couldn't access them. In a US Army journal article published in December, the academic Jared McKinney described this strategy as the "broken nest" — another way to put it is mutually assured destruction.

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