What if China blockades Taiwan and chokes the chip supply?
Single chain: a Taiwan blockade severs ~90% of leading-edge logic, so TSMC/Nvidia/ASML and the whole semi sleeve gap lower and the VIX-led delever hits Nasdaq hardest. No clean historical analogue exists — the 2018-19 trade war and 2025 100%+ tariff peak are pale proxies; the supply shock here is physical, not tariff, so the hit is deeper and stickier. Transmission: China is the buyer of those chips too, and Taiwan funds itself via the export surplus, so a blockade is mutually destructive — markets will fade a quarantine faster than an invasion.
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The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. China imposes a naval quarantine/blockade around Taiwan, threatening the global chip supply. The trigger decomposes into signed root‑shocks — Geopolitical risk ▲ · Semiconductor supply risk ▲ · Trade tension ▲ — which propagate through our causal graph to the markets below.