Ready or Not: Are American multinationals prepared for the Taiwan contingency?

Threading that needle might not be so simple if a major crisis is brewing in the strait. Emily Kilcrease, a senior fellow and director of the Energy, Economics and Security Program at the Center for a New American Security, notes that ‘gray zone scenarios’ —where China imposes a quarantine or seizes Taiwan’s outlying islands — would be particularly challenging for multinational companies to respond to.

“They will probably have legal and operational flexibility to continue their operations in and with China,” she says, “but they will have to decide whether, when and how to ramp down.”

Indeed, any serious confrontation over Taiwan will have a long and deep reach into the global economy. One report suggests an additional $3 trillion in costs if the U.S. and its G7 allies sanction China’s banking system and significant trade and financial flows in a maximalist approach.

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