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Taiwan's deepening economic and security integration with the US, marked by a major trade deal and TSMC's expansion, is met with escalating political condemnation and military pressure from China, with Japan's Sanae Takaichi emerging as a key third-party provocateur.
January 2026
Week of Jan 26, compared to 12-week average
No deviations this week.All weeks this month are quiet.
Taiwan's economy is surging on a landmark US trade deal and TSMC's record performance. The US-Taiwan trade agreement lowers tariffs and boosts chip investment, while TSMC reports record profits and plans major spending on AI chips, sparking a Wall Street chip rally. China's export ban targeting Japan's military serves as a disruptive counterpoint.
Cross-strait politics are dominated by a diplomatic firestorm triggered by Japan's Sanae Takaichi. Takaichi's claim that the Japan-US alliance would 'collapse' if Tokyo ignored a Taiwan crisis prompted fierce rebuttals from Chinese FM spokespersons, who denounced her remarks as illegal and exposing right-wing ambitions. The US-Taiwan trade deal was separately denounced by the mainland as a 'sellout pact'.
Security tensions remain high with routine PLA monitoring of US transits and Taiwan advancing its indigenous defense capabilities. The PLA Eastern Theater Command deployed assets to monitor US vessels in the Taiwan Strait, while Taiwan completed the first undersea trial for a domestically made submarine and tested its first domestically built attack submarine. A Chinese drone also conducted a 'provocative' flight over a South China Sea island.
Societal focus is split between public health action and a high-profile legal case concerning online speech. The government is moving to combat hantavirus after a fatal case, while internet figure Chen Chih-han was indicted over livestream comments, drawing online support as he firmly denies the charges.