Taiwan, Trade, and Sea Power: The Economic Catastrophe We Can’t Ignore

210728-N-FO714-1033 TAIWAN STRAIT (July 28, 2021) The Arleigh Burke-class guided-missile destroyer USS Benfold (DDG 65) transits the Taiwan Strait while conducting routine underway operations. Benfold is forward-deployed to the U.S. 7th Fleet area of operations in support of a free and open Indo-Pacific. (U.S. Navy photo by Mass Communication Specialist 1st Class Deanna C. Gonzales)

Introduction

In a recent Senate Armed Services Committee hearing, Senator Tom Cotton posed a sobering question to Admiral Samuel Paparo, commander of U.S. Indo-Pacific Command: What would happen to the global economy if China attacked or invaded Taiwan?

The answer, echoed by both military and civilian experts, is nothing short of catastrophic.

Investor Ken Griffin warned that a rupture over Taiwan could send the world into “great depression circumstances.” Ian Easton of the Naval War College has long warned of China’s ability to disrupt global trade and exploit vulnerabilities in the Indo-Pacific. The U.S. Navy and our allies cannot afford to treat these concerns as hypothetical.

Why Taiwan Matters to the Global Economy

Taiwan is not only a leading global manufacturer of semiconductors—it is also a key node in international shipping. Roughly one-third of the world’s trade passes through the South China Sea. Any disruption caused by Chinese military action—especially a blockade or invasion of Taiwan—would choke critical sea lanes and sever the supply chains that power everything from cars to smartphones to critical defense systems.

What Ken Griffin Got Right

In January 2024, Griffin put it bluntly:

“If there were a rupture around Taiwan, it would be catastrophic to both the Chinese and to the American economy.”

Griffin wasn’t talking about market jitters—he was warning about supply chain collapse, capital flight, manufacturing shutdowns, and global financial panic. These effects wouldn’t just hit Wall Street—they would impact farmers, truckers, teachers, and service members alike.

Sea Power Is Economic Poweruh

This is why Americans for a Stronger Navy continues to sound the alarm. The U.S. Navy isn’t just a military force—it’s a shield for global commerce. Sea power ensures stability in the Indo-Pacific and protects the economic lifelines that Americans depend on.

Today’s tools of deterrence extend beyond warships. Ships, drones, AI—they all play a critical role in keeping trade flowing and conflict at bay. Without continued investment in these technologies and the people who operate them, our economy and our alliances remain vulnerable.

Blockade drills and military posturing by China are not symbolic—they are preparation. And we must respond with strategic clarity, industrial readiness, and unwavering public support for naval strength.

Conclusion: Americans Deserve to Know

This isn’t just a military issue—it’s an economic one. The American people deserve to understand what’s at stake, and what it means to be unprepared.

If we fail to invest in our fleet, fortify our alliances, and educate the public, we risk more than just ships—we risk our prosperity.

#StrongerNavy | StrongerNavy.org | #Taiwan | #SeaPower | #EconomicSecurity | #INDOPACOM | #USNavy | #ShipsDronesAI

Strengthening America’s Maritime Future: A Wake-Up Call for Action

Bill Cullifer, Founder
Bill Cullifer, Founder

At Americans for a Stronger Navy, we have long advocated for a robust maritime strategy that includes both a stronger U.S. Navy and a revitalized civilian maritime industry. Our commitment to this cause is rooted in a belief that America’s strength at sea is indispensable to its national security, economic stability, and global leadership.

Recently, the U.S. Trade Representative (USTR) released findings from an investigation into China’s dominance in the shipbuilding, maritime, and logistics sectors, revealing practices that undermine fair competition and threaten American interests. This news reaffirms the urgency of revitalizing our shipbuilding industry—a call echoed by U.S. legislators like Senator John Garamendi and others who are leading efforts to rebuild our maritime capabilities.

What the Investigation Found

The USTR investigation, launched in response to petitions by five unions, highlights how China’s aggressive industrial policies have positioned it as a global leader in shipbuilding. According to USTR Katherine Tai, China builds over 1,700 ships annually—dwarfing the fewer than five built by the United States. The report emphasizes that Beijing’s practices displace foreign firms, foster dependencies, and create significant economic and security risks for the U.S.

Quoting Katherine Tai:
“Beijing’s targeted dominance of these sectors undermines fair, market-oriented competition, increases economic security risks, and is the greatest barrier to revitalization of U.S. industries.”

Why This Matters

America’s maritime industry was once the backbone of our global influence and security. Today, it is a shadow of its former self, leaving us vulnerable to external dependencies. The decline of U.S. shipbuilding not only erodes our military readiness but also jeopardizes our economic security, particularly in the face of escalating geopolitical tensions with China.

The implications extend beyond shipbuilding. Logistics, supply chains, and the broader maritime ecosystem are critical to ensuring that America can sustain its global commitments and respond to crises effectively. As Alliance for American Manufacturing President Scott Paul aptly noted:
“Failing to take decisive action will leave our shipbuilding capabilities at the mercy of Beijing’s persistent predatory market distortions.”

Legislative Efforts to Revitalize U.S. Shipbuilding

Amid these challenges, leaders like Senator John Garamendi are working to reverse the tide. Garamendi, alongside Senators Mark Kelly and Todd Young, recently introduced the SHIPS for America Act—a comprehensive, bipartisan effort to rebuild the U.S. shipbuilding industry and expand the U.S.-flagged fleet. Key provisions of this legislation include:

  • Establishing a national maritime strategy and a White House Maritime Security Advisor.
  • Expanding the U.S.-flagged fleet by 250 ships over the next decade.
  • Rebuilding the shipyard industrial base with tax credits, financial incentives, and funding for workforce development.
  • Strengthening regulations to ensure government-funded cargo is transported on U.S.-flagged vessels.

These efforts align closely with our own calls for a balanced strategy that integrates the needs of both the Navy and civilian maritime industries.

What Needs to Be Done

The USTR’s findings, combined with the SHIPS for America Act and related initiatives, offer a roadmap to reclaim America’s maritime leadership. However, this will require decisive action from policymakers, industry leaders, and the American public. We need to:

  • Invest in shipbuilding infrastructure and workforce development.
  • Expand the U.S.-flagged fleet to reduce dependence on foreign shipping.
  • Foster innovation in shipbuilding technologies to compete globally.
  • Unite bipartisan support for maritime legislation that prioritizes national security and economic resilience.

A Call to Action: Wake Up, America!

The stakes have never been higher. As we outlined in our recent open letter, the decline of America’s maritime capabilities is not just an industry problem—it’s a national security crisis. For too long, we have allowed complacency to erode our standing as a maritime power. It’s time to wake up.

We urge you to contact your representatives and demand support for legislation like the SHIPS for America Act. Share this message with your community, and join us in advocating for a stronger Navy and a revitalized civilian maritime industry.

America’s future at sea depends on it. Let’s make it happen.

Credit to AFP for their reporting on the USTR investigation and to the Alliance for American Manufacturing for their continued advocacy.

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