US warns Europe Taiwan conflict could bring in annual economic losses

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The United States has warned European nations that the conflict over Taiwan would take a huge toll on the global economy and its annual economic losses could reach $2.5 trillion, The Financial Times reported on Friday, citing sources familiar with the matter.

The US State Department has shared with the European Commission and European government officials research commissioned from the research firm Rhodium Group. Thus, it warned them of the "significant implications" the conflict over Taiwan could lead to, according to sources cited by the newspaper.

At the same time, the US attempts to find a way to use sanctions against China in the event of any military action against Taiwan, the report said. The US and the EU had begun talks on preparation for possible conflict over Taiwan, two officials told Financial Times.

However, some officials from the US and Europe believe that global economic damage from the Taiwan conflict is "necessary to rally international support for deterring China," the report said.

In September, Chinese President Xi Jinping allegedly told his military that he wants to take control of Taiwan by force by 2027, according to David Cohen, the deputy director of the US Central Intelligence Agency.

In response, the Chinese Embassy in Washington said in a statement that it expresses strong dissatisfaction and opposition to President Joe Biden's continued statements that the United States would defend Taiwan from Chinese forces.

Biden said during an interview with CBS News that US forces would defend Taiwan if China carried out an attack against the island.

Read: War between China, Taiwan unlikely, but US could change things: Expert

The situation around Taiwan escalated following US House Speaker Nancy Pelosi's visit to Taipei in August. Taiwan has been governed independently since breaking away from mainland China in 1949. China considers Taiwan part of its territory and opposes any direct official foreign contacts with the island.

Pelosi's visit led China to announce ending cooperation with the United States on a number of issues such as climate change, anti-drug efforts, and military talks.

Although the US officially claims to support the One China Policy, it has long maintained unofficial relations with Taipei, including the supply of arms to the island.

In response to another visit to Taiwan, China announced new military maneuvers surrounding Taiwan, as a team of US politicians met with the island's leader only weeks after Pelosi's provocative trip. 

The secret two-day visit came as Beijing launched warships, missiles, and fighter jets into the waters and skies surrounding Taiwan.