US surpasses China to become Taiwan's top export destination
TOI World Desk | TIMESOFINDIA.COM | Jul 01, 2025, 00:41 IST
( Image credit : TIL Creatives, TOIGLOBAL )
Taiwan's economic landscape is undergoing a significant transformation as the United States has surpassed China to become its leading export destination, driven by surging demand for AI and ICT products. This shift reduces Taiwan's economic reliance on China amid rising geopolitical tensions.
In a major shift for Taiwan's economy, the United States has officially surpassed China to become the island’s leading export destination. According to Chiou Jiunn-rong, an economics professor at National Central University, this marks a significant change in the global trade landscape.
The announcement follows Taiwan's record export numbers for May, which totaled a staggering USD 51.74 billion. The surge was primarily driven by an increasing global demand for artificial intelligence (AI) products, along with growth in information and communication technology (ICT) and the audio/video sectors. Notably, the US accounted for 30% of Taiwan's total exports in May, outpacing both China and Hong Kong, which together made up just 27.2%.
This is a stark departure from Taiwan's previous export patterns, which once saw over 40% of its exports flow to China. Chiou emphasized that this shift, while positive for Taiwan, also reduces the economic and geopolitical risks that came with such heavy reliance on China. Given the current global supply chain realignment and rising tensions between the US and China, Taiwan's pivot to the US market could signal broader changes in the global economic order.
One of the key advantages of exporting to the US, Chiou noted, is access to a high-income market, which demands more sophisticated products. In comparison, deepening trade ties with China, especially following the 2010 Economic Cooperation Framework Agreement (ECFA), had raised concerns over wage suppression and job losses due to China's more competitive production costs.
Meanwhile, the ongoing political tensions between Taiwan and China have continued to escalate. Taiwan's president, William Lai, in a series of speeches, underscored the island's determination to maintain its sovereignty amid growing military and diplomatic pressure from Beijing. On June 21, Taiwanese military forces detected 12 Chinese aircraft near the island, with eight of them entering Taiwanese airspace. This marks a clear indication that Beijing is maintaining its military presence in the region.
Lai, addressing a gathering in Hsinchu, also pointed out that Taiwan faces what he called "identity warfare" from China, which persistently claims Taiwan as part of its territory. He further criticized Beijing’s attempts to influence Taiwanese artists and media outlets into aligning with the narrative that Taiwan is a part of China.
Refuting China's claims, Lai reminded the public that Taiwan has a separate political and cultural history, emphasizing that the Republic of China (ROC) predates the People's Republic of China (PRC) by over 40 years. He also criticized Beijing's use of economic coercion, particularly in its efforts to attract Taiwanese entrepreneurs, suggesting that China’s ongoing economic challenges contradict the image of prosperity it tries to project.
Taiwan has long maintained its commitment to peace, as evidenced by its aid to China during natural disasters. However, President Lai warned that Beijing's exploitation of Taiwan’s goodwill was part of a broader strategy to undermine the island's democratic values and sovereignty.
The growing tension between the two sides, coupled with Taiwan's economic pivot towards the United States, suggests a potential realignment in both trade and geopolitics. If China continues to lose influence over Taiwan, it could signal a new global economic order, with the US taking a central role in shaping Taiwan's future trade and diplomatic relations.
This shift is not just a milestone in Taiwan’s trade patterns but also a symbolic victory for US-Taiwan relations. With global dynamics at play and China’s hold on Taiwan weakening, the coming months could see further changes in how the island engages with both major powers.
The announcement follows Taiwan's record export numbers for May, which totaled a staggering USD 51.74 billion. The surge was primarily driven by an increasing global demand for artificial intelligence (AI) products, along with growth in information and communication technology (ICT) and the audio/video sectors. Notably, the US accounted for 30% of Taiwan's total exports in May, outpacing both China and Hong Kong, which together made up just 27.2%.
This is a stark departure from Taiwan's previous export patterns, which once saw over 40% of its exports flow to China. Chiou emphasized that this shift, while positive for Taiwan, also reduces the economic and geopolitical risks that came with such heavy reliance on China. Given the current global supply chain realignment and rising tensions between the US and China, Taiwan's pivot to the US market could signal broader changes in the global economic order.
One of the key advantages of exporting to the US, Chiou noted, is access to a high-income market, which demands more sophisticated products. In comparison, deepening trade ties with China, especially following the 2010 Economic Cooperation Framework Agreement (ECFA), had raised concerns over wage suppression and job losses due to China's more competitive production costs.
Meanwhile, the ongoing political tensions between Taiwan and China have continued to escalate. Taiwan's president, William Lai, in a series of speeches, underscored the island's determination to maintain its sovereignty amid growing military and diplomatic pressure from Beijing. On June 21, Taiwanese military forces detected 12 Chinese aircraft near the island, with eight of them entering Taiwanese airspace. This marks a clear indication that Beijing is maintaining its military presence in the region.
Lai, addressing a gathering in Hsinchu, also pointed out that Taiwan faces what he called "identity warfare" from China, which persistently claims Taiwan as part of its territory. He further criticized Beijing’s attempts to influence Taiwanese artists and media outlets into aligning with the narrative that Taiwan is a part of China.
Refuting China's claims, Lai reminded the public that Taiwan has a separate political and cultural history, emphasizing that the Republic of China (ROC) predates the People's Republic of China (PRC) by over 40 years. He also criticized Beijing's use of economic coercion, particularly in its efforts to attract Taiwanese entrepreneurs, suggesting that China’s ongoing economic challenges contradict the image of prosperity it tries to project.
Taiwan has long maintained its commitment to peace, as evidenced by its aid to China during natural disasters. However, President Lai warned that Beijing's exploitation of Taiwan’s goodwill was part of a broader strategy to undermine the island's democratic values and sovereignty.
The growing tension between the two sides, coupled with Taiwan's economic pivot towards the United States, suggests a potential realignment in both trade and geopolitics. If China continues to lose influence over Taiwan, it could signal a new global economic order, with the US taking a central role in shaping Taiwan's future trade and diplomatic relations.
This shift is not just a milestone in Taiwan’s trade patterns but also a symbolic victory for US-Taiwan relations. With global dynamics at play and China’s hold on Taiwan weakening, the coming months could see further changes in how the island engages with both major powers.