Taiwan
Current trend: Holding · Category: World · Last updated: August 28, 2026
Current situation
Military and diplomatic tensions remain elevated while economic and security ties with the U.S. continue. China shows a consistent tendency to display military might when it feels Taiwan expresses independence. They have recently established a record number of naval patrols around Taiwan. That may become more of an issue now that Taiwan has expressed an interest in dramatically increasing its defense budget, which would need approval of the U.S. (since the U.S. would be selling it most of the arms). They are particularly interested in ramping up production of drones to counter China, without relying on Chinese components. Taiwan is a critical provider of semiconductor chips, which has become an inseparable part of the growth of the U.S. economy.
Why we're watching
Taiwan sits at the center of semiconductor production and U.S.-China relations. Its declared independence has been a sore spot for mainland Chinese, and a military campaign by China to take Taiwan is considered one of the world's highest-risk events.
What to watch for next
Military exercises, Political developments, Diplomatic breakthroughs
Signal history
- 2026-08-28 — Taiwan’s legislature approved a plan to spend over $7 billion on drones over the next six years to deter a potential attack by China. The goal is to develop a drone supply chain that does not rely on Chinese components. China leads the world in drone development and manufacturing. It's difficult for militaries to quickly expand their drone fleet without relying to some extent on Chinese components, so many of them are struggling to ramp up production of drones to fight this new type of war.
- 2026-08-25 — Taiwan prosecutors indicted nine people, including employees of Nvidia and Super Micro, over involvement in the illegal export of artificial intelligence servers to China. Over half of servers that were supposed to be installed in Taiwan were exported and delivered to Chinese customers Taiwan has tightened export controls to keep advanced technology from reaching China as it continues to assert its independence. China has stepped up its investment in high technology in a race to match or beat the U.S., and this move from Taiwan will further irk the Chinese.
- 2026-08-20 — The government said the budget includes around $35.2 billion for defense, and special budgets for buying arms from the U.S. President Trump has pushed for more military spending by Taiwan. The budget serves as a reminder of the government’s determination to strengthen the island’s defenses against China. The proposal is just that, a proposal, and needs approval by the legislature and by the U.S. (since the U.S. would be selling it many of the required arms). This is no sure thing, as Trump balances a fraught relationship with Chinese leader Xi Jinping ahead of a proposed September visit.
- 2026-07-30 — China puts the ‘squeeze’ on Taiwan with new patrols While China regularly patrols the Taiwan Strait - separating coastal China from the main island of Taiwan – this marks the first time the patrols have moved east of Taiwan in such quick succession.
- 2026-07-24 — PLA conducts live-fire drills in Taiwan Strait The drill comes days after the Taiwanese leader said Taiwan was “not subordinate to the People’s Republic of China" as Beijing continues to show aggression after perceived sleights by Taiwan.
- 2026-07-16 — Taiwan and US to jointly produce drone Suggests continued independence support (at least stated) by the U.S.