Taiwan’s exports for April fell short of expectations, primarily due to weakened demand from China. Despite this, the United States saw a record surge in shipments, a trend that is expected to continue, according to the Finance Ministry.

What Happened: The island’s exports increased by 4.3% year-on-year to $37.5 billion in April, marking the sixth consecutive month of growth, reported Reuters. This figure, however, fell short of the 10.2% forecast in a Reuters poll and the 18.9% gain in March.

Despite the overall slowdown, exports to the U.S. surged to a record high, driven by strong demand for artificial intelligence-related products. The U.S. saw an 81.6% increase in Taiwanese exports, reaching $10.2 billion. This is a significant rise from the 65.7% surge in March.

On the other hand, exports to China, Taiwan’s largest trading partner, dropped by 11.3% year-on-year to $11.3 billion. This is a significant decline from the 1.3% decrease in the previous month.

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The Finance Ministry anticipates a 7% to 10% year-on-year increase in exports for May, citing the demand for new technologies reliant on AI and high-performance computing as potential offsets to the global economy’s challenges, such as high interest rates and geopolitical tensions.

Why It Matters: The recent surge in U.S. shipments is a continuation of a trend that began earlier in the year. In March, the U.S. overtook China as Taiwan’s largest export market for the first time in over 20 years. This shift was attributed to the increased demand for Taiwanese exports, particularly in the tech sector.

Despite the ongoing geopolitical tensions, Taiwan has remained confident in the continuity of U.S. support. This confidence was expressed by Taiwan’s foreign ministry, which highlighted the bipartisan support for Taiwan, regardless of the outcome of the next presidential election.

China’s stance on Taiwan has also been a significant factor in the region’s economic dynamics. In April, China called for more pragmatic military relations with the U.S., emphasizing the sensitivity of the Taiwan issue. This call was made by the Chinese defense minister during a phone call with U.S. Secretary of Defense Lloyd Austin.

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