US imports more from Taiwan than China for first time in decades

The US imported more from Taiwan than China for the first time in decades as US President Donald Trump’s tariffs reshape trade flows, while a global boom in artificial intelligence fuels demand for tech products.

US purchases of goods from China plunged almost 44 per cent in December from 2024 to US$21.1 billion (S$26.8 billion), Commerce Department data showed on Feb 19.

By contrast, shipments from Taiwan more than doubled in the same period to US$24.7 billion.

The soaring Taiwanese shipments to the US reflect the huge expansion in supplies of chips and servers for AI companies, which has completely changed the self-ruled island’s trade profile and propelled its near US$1 trillion economy into one of the world’s fastest growing.

In 2023, Taiwan exported more to China than to the US or anywhere else. But in 2025, the surge in goods going from the island across the Pacific Ocean was roughly double that going across the narrow Taiwan Strait.

While Chinese exporters have increasingly diversified from the US due to the much higher tariffs imposed on them by Mr Trump, Taiwanese firms have taken the opposite tack, with the US taking almost a third of Taiwan’s total exports in 2025.

Even as China’s exporters have succeeded in escaping Mr Trump’s tariffs by making deeper inroads into markets beyond the US or routing goods via third countries, direct trade between the world’s two largest economies has seen a steep decline. 

The latest data also showed the limits of Mr Trump’s efforts to balance out global trade. The US ran a US$12.7 billion trade deficit in December with China, a gap that trailed only the European Union, Taiwan, Vietnam and Mexico.

For the full year, the deficit with China fell US$93.4 billion to US$202.1 billion in 2025, while it more than doubled to almost US$147 billion with Taiwan.

Taipei’s Ministry of Finance said exports have been buoyed by surging demand for the island’s tech products, with shipments of “information, communications and audiovisual products” to the US in December rising 200.7 per cent from 2024.

Last week, Taipei signed a trade deal with Washington that would lower the “reciprocal” tariff rate to 15 per cent from 20 per cent, while semiconductor products could be shipped to the US duty-free under specific quotas.

The trade pact and optimism over the AI boom prompted the statistics bureau in Taipei to sharply upgrade its estimate of gross domestic product growth in 2026 to 7.71 per cent from 3.54 per cent. BLOOMBERG