Images showed an injured passenger carried away on a stretcher, with her head and neck in a brace, while others gathered suitcases and bags in a tilted, derailed carriage as some walked on the roof of the train to leave the tunnel.
The crash took place at about 09:00 local time (01:00 GMT). The inner wall of one carriage was pushed all the way into the adjacent seat.
The limited express train was carrying almost 500 passengers when it went off the rails in a tunnel along the island's eastern coast.
The Taiwan Railways Administration said that it has launched an investigation.
"Our train crashed into a truck", one man said in a video on Taiwan television, according to Reuters.
Pictures published by local newspaper UDN showed the front of the train inside the tunnel had been pulverised into a twisted mesh of metal.
Taiwan's mountainous east coast is a popular tourist destination, and the railway line from Taipei down the east coast is renowned for its tunnels and a route that hugs the coast just north of Hualien where the crash occurred.
Taiwan President Tsai Ing-wen said, "I instructed fire departments, police and other organizations to engage in the rescue operation".
The crash came on the first day of the four-day Tomb Sweeping Festival, an annual religious holiday when people travel to their hometowns for family gatherings and to pay their respects at the graves of their ancestors. "We will continue to do everything we can to ensure their safety in the wake of this heartbreaking incident".
Taiwanese Premier Su Tseng-chang said the Railways Administration would be required to immediately conduct checks along other track lines to "prevent this from happening again".
Officials said the accident could have been caused by a maintenance vehicle sliding down an embankment and striking the train before it entered the tunnel near the coastal city of Hualien. They were treating minor wounds and offering lunches.
In 2018, 18 people died and 175 were injured when a train derailed in northeastern Taiwan, in the island's worst rail disaster in more than three decades.
"The top priority now is to rescue the stranded people", it said in a statement.
In 1991, a collision in western Taiwan killed 30 people and another crash a decade earlier also killed 30.
"If there is a request from the Taiwan side regarding support, we want to consider possible assistance", he said.
Taiwan's extensive rail system has undergone substantial upgrades in recent years, particularly with the addition of a high-speed line connecting the capital Taipei with west coast cities to the south.
Reportedly, the Taroko Express is one of the fastest train services in Taiwan and typically travels at around 80 miles per hour.
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