U.S. House Speaker Nancy Pelosi’s visit to Taiwan last week raised more than just eyebrows. The Chinese government was practically apoplectic, and the rage continued even after she left. South Asian news agency ANI reported Wednesday morning that China flew 27 fighter jets into Taiwan’s air defense zone.
The imminent danger is that Chinese President Xi Jinping might use the occasion of Pelosi’s visit to make a grab for Taiwan, making good on its long-standing claim to the island.
If China chooses to take a page out of the U.S. playbook for how to react to a geopolitical threat, it could wreak havoc on the U.S. and global economies. As a source for many of the world’s most in-demand raw materials, China could cut production and exports, impose export taxes, or redirect its anger to foreign companies with operations in China. Companies like Tesla Inc. (NASDAQ: TSLA).
This post first appeared on 24/7 Wall St.