Detailed close up of the national flag of China waving in the wind on a clear day


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The U.S. is considering several versions of a package of sanctions against China to deter it from invading Taiwan, with the island nation pressuring the European Union to do the same, according to Reuters.

The news outlet, citing sources familiar with the discussions, noted that the talks in Washington and Taipei’s lobbying of the EU were in the early stages and likely stem from continued aggressive military actions taken by China since U.S. lawmakers, including House Speaker Nancy Pelosi, started visiting Taiwan early last month.

In August, Pelosi met with several leaders from Taiwan’s semiconductor industry, including Taiwan Semiconductor (NYSE:TSM) Chairman Mark Liu.

The sources added that the sanctions under discussion would go beyond already enacted measures of restricting access to sensitive technologies such as semiconductors and telecom equipment.

If China were to invade Taiwan, it would further disrupt global supply chains, particularly for semiconductors, as the country is home to Taiwan Semiconductor (TSM), the world’s leading semiconductor foundry.

Taiwan Semiconductor (TSM) makes chips for a vast number of clients, including Apple (AAPL), Nvidia (NVDA), Advanced Micro Devices (AMD) and others.

Earlier this week, it was reported that the Biden administration was looking to increase the restrictions of selling semiconductor equipment to China.

Intel (NASDAQ:INTC) Chief Executive Pat Gelsinger recently said he did not believe that China would invade Taiwan in the next five years, echoing a similar sentiment from officials in the Biden administration.

In August, Taiwan Semiconductor’s (TSM) Liu told CNN that “nobody can control [Taiwan Semiconductor] by force,” adding that it would be “nonoperable” if it were taken by military force or invasion due to its “sophisticated manufacturing facilities.”

China claims Taiwan as its own territory and the U.S. has operated under a longstanding “One China” policy.

However, the visit by Pelosi and other lawmakers from both sides of the aisle have spurred the country to step up war games in recent weeks, including firing missiles over the island and flying warships over the Taiwan Strait median line.

Reuters added that talks of sanctions on China started after Russia invaded Ukraine but have taken on additional urgency following the Chinese reaction to Pelosi’s visit, two sources added.

The U.S. is taking a similar approach to what happened earlier this year before Russia invaded Ukraine by attempting to get Europe and parts of Asia on the same page.

However, Germany, the EU’s largest economy is “wary” according to one of the sources, given its relationship with China.

All 27 members of the EU have formal diplomatic relations with China, but not with Taiwan.



Image and article originally from seekingalpha.com. Read the original article here.

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