The hidden partnership: Navigating the Russia-Taiwan commercial relations
Although Russia considers Taiwan part of the People’s Republic of China (PRC), while Taipei condemned Russia’s invasion of Ukraine and joined the West in imposing sanctions, the two sides continue to maintain close economic ties at an unofficial level. Taiwan remains dependent on Russian imports in several strategically important sectors, and since 2022 trade in these areas has increased. For Taiwan, energy and infrastructure are matters of national security, and it is therefore prepared to disregard its rhetorical support for Western sanctions and import Russian oil products as well as iron and steel. For Russia, Taiwan is one of the few remaining buyers willing to pay in hard currency. This relationship is politically uncomfortable for both parties, to the extent that neither is eager to acknowledge it publicly.
Unofficial ties: Establishing relations (1991-2014)
After the establishment in 1992 of the Moscow-Taipei Coordination Commission on Economic and Cultural Cooperation (MTC), bilateral trade between Russia and Taiwan expanded gradually. Taiwan’s exports to Russia grew from several tens of millions of dollars at the beginning of the decade to approximately US$200-300 million by the early 2000s, while Russian exports surpassed US$1 billion by the mid-1990s.
In the 2000s, relations continued to develop: the Taiwan-Russia Association was established, and Taiwan participated in the 2012 Asia-Pacific Economic Cooperation (APEC) Forums in Vladivostok. It also concluded credit agreements and reached arrangements on imports of oil and fertilisers. Russian exports to Taiwan exceeded $3 billion by 2012–2013, while Taiwan strengthened its position as a supplier of electronics, semiconductor components, and industrial equipment to the Russian market.
The development of these ties did not imply a revision of Russia’s position on the Taiwan question. Throughout the 1990s and 2000s, Moscow formally adhered to the ‘One China’ principle, while cooperation with Taiwan was conducted exclusively through commercial channels.
Taiwanese exports to Russia in 1992-2014 were made up primarily of products with high added value. More than half consisted of electronics and IT products, highlighting the technology-intensive character of Taiwanese industry. Russian exports to Taiwan, by contrast, consisted almost exclusively of raw materials and semi-finished products. The main export categories were iron and steel products (around 46% of exports); energy resources, including diesel fuel, bituminous coal, naphtha, and LNG (approximately 30%); non-ferrous metals, primarily nickel, aluminium, copper, and titanium (about 14%); and chemicals and rubber (around 7%).
The trade balance consistently favoured Russia. Taipei needed Russian raw materials far more than Moscow needed Taiwanese technology and consumer goods. Against the backdrop of the Russia-Ukraine conflict that began in 2014 and Russia’s so-called ‘pivot to the East’, the two sides continued to expand their trade relations.
The New Normal: The First Sanctions Era (2014-2021)
Western sanctions in response to Russia’s aggression against Ukraine pushed Moscow to accelerate its search for economic partners in Asia. Taiwan, with its defence policy based on close alignment with the US, found itself compelled to take into account the political consequences of deepening cooperation with Russia.
Russia-Taiwan economic relations followed a trajectory similar to that of Russia’s relations with a number of other Asian economies. The annexation of Crimea in 2014 led to a short-term decline in bilateral trade,1 which was followed by a gradual recovery as businesses adapted to the new restrictions. By 2017, bilateral trade had resumed its growth, and by 2021 the value of Taiwanese exports to Russia had reached $1.32 billion.
By 2021 electronics shipments from Taiwan to Russia had reached $450 million, exceeding the 2014 level. The main categories were now data storage devices, computer components, display and signal parts, integrated circuits, and networking equipment. This reflects a shift in Russia’s strategy for procuring computing infrastructure, which may have been driven by efforts to strengthen government control of online activity and isolate the Russian internet from the rest of the world, as well as by the gradual transition to a wartime economy.
Russian exports to Taiwan increased from $3.65 billion in 2014 to $5.01 billion by 2021. The most significant transformation was the dramatic growth of LNG exports: their value grew from $40 million in 2014 to $1.15 billion in 2021. LNG emerged as a major export category after the imposition of sanctions, driven by the launch of the Yamal LNG project in 2017 and Taiwan’s growing demand for imported natural gas as it phased out nuclear energy. Coal remained one of the most stable export categories, never falling below $430 million annually and reaching $1.18 billion by 2021. At the same time, exports of metallurgical materials, including semi-finished steel products and pig iron, more than doubled. Russia also significantly expanded its exports of caprolactam, an industrial chemical used to produce Nylon 6, a synthetic polymer.
At the beginning of 2022, Russia-Taiwan economic relations remained resilient despite Russia’s increasingly close alignment with the PRC and the absence of significant progress in diplomatic relations between Moscow and Taipei. Over the previous eight years, businesses on both sides had learned to operate under sanctions.
Escalation and Adaptation: The Second Sanctions Era (post-2022)
On 24 February 2022, Taiwan's Ministry of Foreign Affairs spokesperson stated: “We strongly condemn Russia’s violation of Ukraine’s sovereignty and its destabilisation of regional and global peace and stability. Taiwan is willing to participate in efforts that contribute to the peaceful resolution of disputes.” On 25 February 2022, Taiwan joined western economic sanctions against Russia. It began planning to seek new LNG suppliers after the expiry of its contract with the Gazprom-controlled Sakhalin-2 consortium in March. The contract was not renewed.
However, Taiwanese trade statistics for individual commodities after February 2022 reveal a complex picture. In several strategically important areas, Taiwan’s dependence on Russian imports increased. The most striking example was naphtha, a key feedstock for petrochemical production. Imports grew from $859 million in 2021 to $2.2 billion in 2025, making it the largest category of Taiwanese imports from Russia. The authorities did not place restrictions on naphtha imports. While state-owned enterprises phased out purchases of Russian energy products, private companies continued to import Russian naphtha throughout the post-2022 period. Diesel fuel imports began to increase from 2023 onwards and, as of early 2026, diesel remains the only petroleum product still being imported from Russia and listed in publicly available Taiwanese trade data.
In five categories — naphtha, diesel fuel, caprolactam, and two types of semi-finished steel (higher-carbon steel for demanding industrial uses, and rectangular steel slabs used to make sheets and other rolled products) — Russia accounts for more than 25% of Taiwan’s imports, making it an important supplier for several sectors of Taiwanese industry and rendering rapid substitution difficult.
Russia accounts for 55.9% of Taiwan’s naphtha imports ($2.2 billion out of $3.94 billion), while the Persian Gulf states account for a further 38.1%. An additional factor is that some shipments formally originating from the Persian Gulf states may, according to the Centre for Research on Energy and Clean Air, consist of Russian naphtha re-exported through terminals in the UAE. Reuters reports that Russian naphtha has increasingly been routed through storage hubs such as Fujairah, where cargoes may be blended and resold into Asian markets. In that case, Russia’s actual share of Taiwan’s naphtha imports would be greater than is indicated by customs statistics.
A high degree of concentration is also evident in Taiwan’s diesel fuel imports. Russia accounts for 34.5% of imports ($354 million out of $1.03 billion), making it Taiwan’s second-largest supplier after South Korea.2 Although South Korea remains Taiwan’s largest supplier of diesel fuel, it has almost no domestic oil production and depends on imported crude oil to utilise its refining capacity. After 2022, Asian refineries’ reliance on Russian oil increased, and some of the diesel fuel which they produced subsequently entered the Taiwanese market. As a result, Taiwan’s effective dependence on Russian oil may be higher than customs statistics indicate.
Old Dependencies, New Channels: High-Tech Import Networks
In 2022, TSMC (Taiwan Semiconductor Manufacturing Company), Taiwan’s largest semiconductor manufacturer, announced that it would comply with all new export-control regulations governing trade with Russian companies and would cease supplying chips to Russia.
Over the following four years, the volume of high-tech exports from Taiwan to Russia indeed declined by a factor of 7.4, falling from $600 million in 2021 to $77 million in 2025. This primarily affected electronics, semiconductors, integrated circuits, and computing equipment. The largest decline occurred in 2022, when export volumes fell by 41%. Taiwanese companies began scaling back exports almost simultaneously with European and American manufacturers, immediately following the introduction of sanctions and the tightening of export controls.
The most significant decline was in exports of semiconductors and integrated circuits. For Taiwanese manufacturers, this is a particularly sensitive category since the industry depends directly on American technology and equipment, and on access to Western markets. The risk of violating sanctions-related restrictions proved far greater for them than for producers of industrial machinery. By 2025, direct exports of integrated circuits and microchips to Russia had virtually stopped.
Taiwanese trade statistics record the immediate destination of goods but do not identify their final recipient. To assess the possible restructuring of trade routes after 2022 requires examining export dynamics to third countries. Of particular interest are the EAEU countries (particularly Kazakhstan and Kyrgyzstan), the UAE, and Hong Kong. After 2022, all of these countries substantially increased their imports of computing equipment, electronic components, integrated circuits, and telecommunications equipment from Taiwan. Although such data do not by themselves confirm re-exports to Russia, they point to a broader problem: with hundreds of restricted product categories, many of which consist of small, low-value components, enforcement becomes particularly difficult once goods pass through different jurisdictions. None of the countries discussed below joined the sanctions regime, and the shipments were handled by commercial trading companies, not governments.
Imports of Taiwanese electronics (HS categories 8471-8542) into Kyrgyzstan — an economy the size of a mid-tier Russian region — grew eightfold in two years, from $0.78 million in 2021 to $6.85 million in 2023, a pace not attributable to domestic demand alone. In parallel, exports of integrated circuits from Kyrgyzstan to Russia rose from $0.66 million in 2022 to $13.53 million in 2023, before falling to $1.33 million in 2024 — a timeline that maps onto the tightening of secondary sanctions and growing pressure on transit jurisdictions — and then partially recovering to $4.84 million in 2025. In absolute terms, these are modest sums; their significance lies less in their scale than in what they suggest about how quickly small trading networks can adjust to new restrictions.
Imports in the same HS categories into Kazakhstan grew from $24.3 million in 2021 to $90.2 million in 2023 — a similar pattern to Kyrgyzstan's, but at a larger scale. The most telling shift was in imports of computers and servers (HS 8471), which jumped from $4.6 million to $55.7 million in two years, a more than tenfold increase. Exports of integrated circuits to Russia followed a similar trajectory: $0.25 million in 2021, $18.3 million in 2022, $15.6 million in 2023. After the US applied direct pressure on Kazakhstan to uphold sanctions on Russia, the response was swift: imports of computing equipment collapsed to $6.9 million in 2024, and exports of integrated circuits to Russia fell to just $0.4 million. By 2025, import flows had partially recovered to $42.6 million, though with a more diversified structure.
Imports of Taiwanese electronics into the UAE increased from $336.2 million in 2021 to $559.6 million in 2025, expanding at a modest 16-19% annually. In 2025, overall imports remained virtually flat, yet imports of integrated circuits increased 4.3-fold and printed circuit boards nearly twelvefold, while shipments of finished devices declined. Components, unlike finished products, are much harder to trace to an end user.
Hong Kong is the world’s largest re-export hub for electronics, and high trade volumes there, by themselves, prove nothing. Yet here too, after 2022, growth was concentrated in categories sensitive to sanctions-related restrictions: imports of electronics from Taiwan increased from $54.3 billion in 2021 to $64.9 billion in 2025. Exports of integrated circuits from Hong Kong to Russia remained incomparably larger than those from the Central Asian transit economies: $208.2 million in 2022, $307.9 million in 2023, $172.0 million in 2024, and $189.9 million in 2025. There were neither dramatic surges nor collapses in the level of exports, but a steady flow that persisted throughout the period.
Taken together, these cases point less to any single country acting as a re-exporter to Russia than to the structural ineffectiveness of the sanctions regime itself. Hundreds of dual-use product categories are restricted, many of them small, low-cost components that can easily be considered part of ordinary commercial trade, so that controlling their movement becomes practically impossible once they pass through other jurisdictions.
Beneath the Guardian Mountain: Taiwan's Strategic Contradictions
Trade between Taiwan and Russia presents far too nuanced a picture for it to be possible to conclude simply that sanctions either worked or failed. Where sanctions targeted specific, easily identifiable categories of goods (finished electronics, semiconductors, and dual-use products), they largely achieved their intended objective. Direct exports of high-tech products to Russia declined almost sevenfold.
However, trade in commodities that are essential to Taiwan's industrial base, including naphtha for the petrochemical industry which supplies the semiconductor production chain, coal and diesel for energy-intensive manufacturing, and steel billets and caprolactam for domestic industry, barely declined: these products were never subject to direct sanctions or import controls. As noted above, between these two extremes are exports of low-value small components and parts that are particularly difficult to monitor because they are easily re-exported.
This pattern reflects choices Taiwan has made about its own economic security. As it turns out, these choices partly reflect the need to maintain trade relations with Russia. This persistence can be explained by three mutually reinforcing factors.
TSMC alone accounts for roughly 6% of Taiwan's GDP and nearly half of its stock-market capitalisation; in public discourse it is known as ‘The Guardian Mountain’. Since Taiwanese chips are embedded in supply chains across the global economy, Taiwan’s security strategy rests partly on this dependence, known as the Silicon Shield: the idea that the world's leading technological economies have a direct stake in the island's stability. Maintaining this approach requires keeping the industry's cost base competitive, which is one reason why energy policy in Taiwan is treated as a national security question rather than a purely economic one.
This question has grown more pressing because of a second factor: an initiative called the non-Red supply chain, which seeks to end Taiwan’s reliance on Chinese components and infrastructure, in part by relocating manufacturing capacity from mainland China back to Taiwan. Relocated factories need more electricity, and, since Taiwan has been shutting down nuclear plants at the same time, discounted Russian coal and naphtha have helped to cover the resulting energy gap.
A third factor is politics. Taiwan's position has been complicated by the unpredictable behaviour of the United States, which is still the island's main security guarantor, but is increasingly inconsistent in its commitments. This gives Taipei an added incentive to keep other relationships open, including with Russia.
Over the past several years, many supply chains have been adapted to Russian raw materials, while the logistical and production arrangements built around them would require substantial time and investment to replace. Even as government regulation becomes more restrictive, Taiwanese companies are continuing to cooperate with Russian partners through overseas subsidiaries and intermediary firms.
Sanctions are typically assessed by their most visible indicators: how sharply they reduce trade volumes, or how many banks are cut off from the international financial system. By these measures, sanctions on Taiwan-Russia trade look like a case of partial success. A more useful test, however, is not how much trade was reduced by, but which forms of trade continue, and why. In Taiwan's case, trade has persisted in categories tied to industries and infrastructure that Taiwan treats as matters of national security. Not surprisingly, a sanctions regime reaches its limits when it conflicts with the essential interests of the participating countries.