Taiwan is making the most of the U.S.’s policy of “strategic ambiguity,” even as President Trump’s stance raises concern for some in Taipei.

Taiwan has sharply raised its economic growth forecast for 2025 to 7.37 per cent, the fastest rate in 15 years, as roaring demand for artificial intelligence continues to boost its electronics exports.

Gross domestic product is expected to expand 3.54% in 2026, according to a statement from the statistics bureau in Taipei on Friday. That compares with the previous forecast of 2.81% back in August. Exports were projected to grow 6.32% for the year, versus an earlier call of 2.19%.

For proof that an economy can thrive even under constant military threats from a powerful neighbor and amid US President Donald Trump’s sweeping global tariffs, look no further than Taiwan.

The remarks come amid the two countries’ worst diplomatic crisis in years, after the Japanese prime minister said a Chinese attack on Taiwan could trigger a military response from Tokyo.

Several civic groups in Taiwan held a rally outside the "Legislative Yuan" on November 28, 2025 to denounce regional leader Lai Ching-te for pushing a $40 billion special arms-pur

The budget will be allocated over eight years as part of the island's strategy to deter a China's threats of invasion

The New Zealand navy's largest ship, the oiler HMNZS Aotearoa, made a rare transit through the sensitive Taiwan Strait earlier this month, Defence Minister Judith Collins told Reuters.

Taiwan’s President Lai Ching-te has announced a special $40 billion budget for arms purchases, including to build a Taiwan Dome, an air defense system with high-level detection and interception capabilities,

Last week, Tokyo’s top defense official toured Japan Self-Defense Force (JSDF) and Coast Guard facilities across the southwestern islands – including a base located 70 nautical miles away from Taiwan.