Taiwanese visits to mainland China topped 3 million in 2025, still below pre-Covid levels

In 2025, Taiwanese visits to mainland China reached 3.24 million, a 17% increase compared to 2024, according to Taiwan's Tourism Administration. However, this figure remains 20% lower than pre-pandemic levels in 2019. The slow recovery is attributed to ongoing cross-strait tensions, including a ban on group tours to the mainland since 2020, and a preference among Taiwanese travelers for destinations like Japan and South Korea. Political tensions have risen since Taiwanese leader William Lai Ching-te took office in 2024, further impacting cross-strait travel. These factors have significantly disrupted tourism between Taiwan and mainland China in recent years.

Taiwanese leader William Lai Ching-te is urging public support for a stalled special military budget of NT$1.25 trillion (US$40 billion). The budget has been repeatedly blocked by opposition parties, causing concern that crucial weapons deliveries could be delayed. Lai warns that the deadlock could also lower Taiwan's priority in the US arms supply chain, especially as Washington pressures Taipei to demonstrate its commitment to self-defense. He emphasized that increased defense spending is essential for security and regional stability. Lai called on lawmakers to substantively review the budget bill when the legislature reconvenes on February 24.

In February 2026, the United States and Taiwan finalized a trade agreement aimed at reducing tariffs and boosting trade. Taiwan agreed to purchase approximately $85 billion worth of US energy, aircraft, and equipment. In return, the US will lower the general tariff rate on Taiwanese goods from 20% to 15%, aligning it with rates for South Korea and Japan. The agreement will see Taiwan eliminate or reduce 99% of its tariff barriers, granting preferential access to US goods like auto parts and dairy. The US will exempt various Taiwanese products, including chalk and pineapples, from tariffs. Taiwanese President Lai Ching-te hailed the deal as pivotal, securing exemptions for around 2,000 Taiwanese products and aiming to increase the competitiveness of Taiwanese goods in the US market.

In late 2025, the Trump administration and Taiwan signed a trade agreement aimed at reducing Taiwan's tariff barriers. Under the deal, Taiwan will eliminate or lower tariffs on 99% of its goods. The agreement, facilitated by the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United States, sets Taiwan's export tax rate to the US at 15% or the "Most Favoured Nation" rate. The US remains reliant on Taiwan for computer chip production, contributing to a significant trade imbalance. The signing, attended by officials from both sides, precedes President Trump's planned visit to China in April, signaling a potential strengthening of US-Taiwan economic ties.

As of January 2026, Taiwan's economy is experiencing significant growth fueled by advancements in artificial intelligence. Companies like TSMC and Foxconn are key players in this AI-driven expansion. However, this economic boom is shadowed by concerns of a potential economic bubble. The island nation also faces ongoing threats from China, adding geopolitical uncertainty to its economic outlook. Asia Vital Components (AVC) Chairman Spencer Shen discussed these issues in an interview, highlighting both the opportunities and risks facing Taiwan's AI-powered economy. The article provides a snapshot of Taiwan's economic landscape amidst technological advancements and external pressures.