US representatives can already travel to democratic Taiwan and Taiwanese officials occasionally visit the White House, but meetings are usually low profile to avoid offending China, AFP wrote.
The "Taiwan Travel Act", which Trump signed on Friday following its passage in the US Congress, encourages visits between US and Taiwanese officials "at all levels".
Washington cut formal diplomatic ties with Taiwan in 1979 in favor of Beijing under the "one China" policy. But it maintains trade relations with the island and sells it weapons, angering China.
China sees Taiwan as a renegade province and has long stated its desire for reunification.
Chinese Foreign Ministry spokesman Lu Kang said the bill's clauses, while not legally binding, "severely violate" the one China principle and send "very wrong signals to the 'pro-independence' separatist forces in Taiwan."
"China is strongly opposed to that," Lu said in a statement issued on Saturday.
"We urge the US side to correct its mistake, stop pursuing any official ties with Taiwan or improving its current relations with Taiwan in any substantive way," he said.
The new US law describes Taiwan as "a beacon of democracy" in Asia, and states that "Taiwan's democratic achievements inspire many countries and people in the region."
Trump's signature, announced late on Friday — when the White House usually tries to bury news — comes amid increasing tensions between the mainland and the self-ruled island.
Beijing has cut off official communications with Taipei because President Tsai Ing-wen refuses to acknowledge the democratic island as part of "one China."
The travel act also comes amid trade tensions between the United States and China as Trump mulls fresh measures that have raised fears of a tit-for-tat trade war.