Disputes In South China Sea Could Disrupt Trade Lanes, Lead To War, Experts Say

By Noi Mahoney of FreightWaves

Territorial confrontations in the South China Sea pitting several Asian nations against China have entered a perilous phase that could possibly lead to a war involving the U.S., experts say.

China has claimed virtually all of the South China Sea for decades, but the country’s assertiveness in the region has steadily increased the past several years, resulting in heightened tensions with nations including the Philippines, Vietnam, Taiwan and Brunei.

Krista Wiegand, a professor at the University of Tennessee, said the U.S. has no direct claims of sovereignty or unique maritime rights in the South China Sea, but the waterway nevertheless is a place where war could break out between the U.S. and China.

Wiegand is the director of the Center for National Security and Foreign Affairs at the Howard J. Baker School of Public Policy and Public Affairs at the university. She is a specialist in territorial and maritime disputes, maritime law, and East Asian security.

“If the U.S. were to get involved in any kind of war with China, it would most likely be over Taiwan,” Wiegand told FreightWaves in an interview. “But at the same time, there is a possibility of an accident or some kind of crisis happening in the South China Sea. For example, if a U.S. vessel has a collision with a Chinese naval vessel or there’s a missile shot at a U.S. destroyer ship or frigate, that would certainly lead to some kind of crisis that might escalate. Nobody wants a war, obviously, including China, but they definitely want the South China Sea, and there’s a possibility that the war might happen.”

The 1.3 million-square-mile sea in the Western Pacific Ocean contains some of the busiest trade routes in the world.

The South China Sea stretches from Singapore and the Strait of Malacca in the southwest to the Strait of Taiwan in the northeast and sits between China, Taiwan, the Philippines, Indonesia, Vietnam, Thailand, Brunei, Cambodia and Malaysia.

Researchers at Duke University calculated that total trade through both the South China Sea and the East China Sea — which lies between China, North and South Korea, and Japan, is worth $7.4 trillion per year. 

About 24% of global maritime trade passed through the South China sea in 2023, according to the United Nations’ 2024 review of maritime transport.

The South China Sea’s share of global seaborne trade volume per commodity in 2023 included crude oil (45%), propane (42%), cars (26%) and dry bulk (23%).

Exports from China to both the U.S. and Mexico have shown strong growth the past five years. The trade route for goods from China to North America passes either through the South China or the East China Sea.

As of Thursday, twenty-foot equivalent units moving from China to the U.S. are about 10% lower year over year compared to 2023, but are more than 40% higher y/y compared to 2022, according to the SONAR Inbound Ocean TEUs Volume Index.

The South China Sea may also hold valuable undiscovered resources, such as oil and natural gas, according to the U.S. Energy Information Administration (EIA). 

In 2023, the U.S. Geological Survey reported the South China Sea may contain up to 9.2 billion barrels of untapped petroleum and other liquids, and up to 216 trillion cubic feet of natural gas, according to a recent EIA report.

China’s disputes in the South China Sea include territories that fall within a country’s economic exclusion zones (EEZ), such as the Philippines. An EEZ is a maritime area where a coastal state has the right to explore, exploit, conserve and manage natural resources, according to the United Nations.

In 2016, the Permanent Court of Arbitration at The Hague ruled in favor of the Philippines in a case opened in 2013 against China. The court of arbitration said China’s claims in the South China Sea had no legal basis.

Wiegand said the Permanent Court of Arbitration and other international organizations made it clear that China did not have any solid claims to owning all of the South China Sea.

“There are some historic claims that may have legitimacy, but at the same time, the United Nations Convention of the Law of the Sea, which China signed and ratified, along with most other countries in the world, with the exception of the U.S. and a few others, is very clear about the maritime boundaries of countries,” Wiegand said. “China’s claims or maritime features about islands in the waters of countries like Vietnam and the Philippines that fall under their control … those are completely illegitimate.”

Hasim Turker, an international security expert based in Istanbul, said if the U.S. gets drawn into the South China Sea conflict, it will most likely be through its treaty with the Philippines or to help Taiwan or other nations.

“The U.S. has substantial strategic interests in the South China Sea, centered around maintaining freedom of navigation and enforcing international maritime norms,” Turker told FreightWaves in an email. “This is not just about economic stakes, but also about reinforcing the rules-based international order. Regular Freedom of Navigation Operations (FONOPs) are a clear expression of Washington’s intention to challenge China’s expansive claims. These operations are designed to assert that the waters in question remain open to all nations, according to the United Nations Convention on the Law of the Sea (UNCLOS) — even though the U.S. itself has not formally ratified the treaty.”

In August 2023, ships belonging to China and the Philippines accused each other of causing collisions in a disputed area of the South China Sea.

Philippine authorities said a Chinese Coast Guard ship carried out “dangerous blocking maneuvers” that caused it to collide with a Philippine vessel carrying supplies to troops, according to a statement on CNN.

In June, China and the Philippines blamed each other for causing a collision in the South China Sea near the contested Second Thomas Shoal, with the Philippines saying its armed forces would resist Beijing’s actions in the disputed waters, according to Reuters.

U.S. Ambassador to the Philippines MaryKay Carlson condemned China’s “aggressive, dangerous” maneuvers near the Second Thomas Shoal in a post on X in June.

In September, authorities in China and the Philippines agreed to a temporary deal after the countries had repeated collisions near the shoal. However, the Philippines said the deal might not be permanent.

The U.S. and the Philippines have a long history of cooperation, officially starting in 1951 with the U.S.-Philippines Mutual Defense Treaty. The treaty requires both nations to support each other if another party attacks either country.

“The likelihood of armed conflict in the South China Sea remains significant due to ongoing tensions, frequent confrontations, and increased militarization,” Turker said. “Incidents like the August 2023 underscore the persistent risk of military escalation. These confrontations reflect a broader pattern of assertive behavior by China, involving the deployment of coast guard vessels, maritime militia, and military assets to enforce its claims over disputed waters.”

Turker, a former commander in the Turkish navy, is the author “European Security and Defense Policy” (2007) and “Towards the New Cold War: Rising China, the U.S., and NATO,” (2019). He was also the academic coordinator and senior researcher at the Bosphorus Center for Asian Studies, an independent think tank based in Ankara, Turkey.

“Frequent incidents … demonstrate how easily low-intensity confrontations can occur, especially given the dense presence of military, coast guard, and civilian vessels in contested waters, which increases the likelihood of accidental or deliberate escalation,” Turker said. “This risk is compounded by China’s militarization of artificial islands, where airstrips, missile systems, and surveillance infrastructure have been constructed. These moves have prompted other claimants to bolster their defenses, leading to a more volatile environment.”

Turker said U.S. involvement would significantly escalate the situation in the South China Sea, particularly if military assets are deployed.

“This would not only raise tensions in the region, but could also lead to direct military confrontation with China — a scenario neither side desires, given the stakes involved. A U.S.-China conflict would have global repercussions, impacting trade, regional alliances, and the geopolitical balance of power. The specter of a broader war looms if such an incident escalates beyond a controlled, localized response, especially if U.S. allies like Japan or Australia are drawn in to support collective security efforts in the Indo-Pacific,” Turker said.

While a war breaking out in the South China Sea is a strong possibility, each country also has reasons for keeping the peace, he added.

“Several factors deter the escalation of limited skirmishes into a full-scale war in the South China Sea. The economic costs of a major conflict are substantial, as a war would disrupt critical trade routes, affecting global supply chains and damaging regional economies, including China’s, which heavily depends on maritime commerce,” Turker said. “Regional stability remains a priority for Southeast Asian nations, which, despite their assertive territorial claims, generally favor diplomatic solutions to maintain economic stability and avoid the risks associated with a prolonged conflict. The possibility of a broader confrontation involving major powers, such as the U.S. and its allies, is another significant deterrent. A full-scale war could draw these external actors into the conflict, raising the stakes to a regional or even global level, a scenario that all parties are keen to avoid.”

Wiegand said while she hopes there is a diplomatic solution to the territorial disputes in the South China Sea, it will be difficult to quell China’s rising ambitions.

“The problem is that the Philippines tried a diplomatic solution through the arbitration case, and China refused to even show up to the courts; they didn’t even send representatives,” Wiegand said. “Vietnam has tried negotiations multiple times, and China just refuses to back down, and they just keep repeating the same claim: These are our territories, these are our waters. There’s only so much you can do diplomatically. For the other countries, they’re kind of stuck until China makes a move. It’s really at a standstill right now, and unfortunately, I think the status quo is just going to be a continuation of China maintaining its claims, maintaining the control of the islands, controlling the waters. It’s really up to the other disputing countries, whether they want to really pressure China any further to try to overturn that status quo. That’s a very difficult thing to do diplomatically.”