Fragmentation of global trade leads to sub-optimal outcomes

The tensions near Taiwan go up at a time when the relations between Russia and the US and its allies are at rock bottom

Last week, the relations between China and the United States worsened following the visit of Nancy Pelosi, the Speaker of the US House of Representatives, to Taiwan. An angry China conducted live-fire drills around Taiwan and even fired some missiles into the exclusive economic zones in the waters of Taiwan and Japan. How will these developments affect global trade?

The military drills around Taiwan have forced shipping lines to reroute the voyages of the ships in one of the world’s busiest waterways. The disruptions can impact supply chains and result in delays in reaching the cargo to its destinations. Taiwan said