Tsai revealed her plans Tuesday in an exclusive interview with CNN's Matt Rivers while aboard her presidential plane, saying she wanted to "complete" her vision for Taiwan.
"It's natural that any sitting president wants to do more for the country and wants to finish things on his or her agenda," Tsai said.
Tsai was the first woman to be elected leader of the self-governed democratic island in 2016, sweeping to power amid promises to overhaul the economy and lessen Taiwan's reliance on mainland China.
But two years later, her Democratic Progressive Party (DPP) suffered bruising losses during local elections in 2018, prompting her to resign as chairwoman of the party. Across the island, her party lost by almost 10% of the vote.
Since then, she has faced calls from senior members of her own party to not seek re-election. But despite the criticism, Tsai told CNN she is "confident" in her ability to win.
"This is something I have prepared for," said Tsai. "It's again another challenge. Being president, you're not short of challenges. At good times you have challenges of one sort, and in bad times you have challenges of another sort."
Strained relations with Beijing
Despite being self-governed since the end of China's civil war in 1949, Beijing still views Taiwan as a renegade province and part of the People's Republic of China.
Tsai's predecessor, Ma Ying-jeou, forged close ties with Beijing and even met with Chinese President Xi Jinping in a historic 2016 meeting in Singapore.
But relations turned frosty following the election of Tsai, whose party has historically advocated for self-determination.
The Chinese government, under Xi, has turned up the pressure on Tsai and her administration both economically and politically.
Since 2016, the Chinese military has regularly conducted large-scale military exercises around the island, including sailing the Liaoning aircraft carrier through the Taiwan Strait.
The Taiwan military has responded with anti-invasion drills, including a massive show of force on Taiwan's west coast on January 17.
In a January speech, Xi made a renewed call for Taiwan to rejoin mainland China, telling it to embrace "peaceful reunification" and warning independence was a "dead end."
But in her own New Year's address, Tsai told Beijing to "face the reality of the existence of the Republic of China," the official name for Taiwan.
"Respect the commitment of the 23 million people of Taiwan to freedom and democracy," she said.
Domestic issues
Despite the strained ties, Tsai said cross-strait relations weren't a key factor in her party's setback at last year's elections.
Tsai said she blamed her party's bruising defeat on what she calls a difficult reform agenda she has pushed since taking office.
Her efforts to promote pension reform and push for equal rights for the island's LGBT community have become divisive issues in Taiwan, fueling protests across the island.
"You get attacks, you get criticism, the people don't feel the result of the reform so much when you've just started," Tsai said.
Tsai will face a difficult re-election bid and could be forced to fend off challengers both in her own party and the Kuomintang (KMT), the main opposition party that traditionally favors closer relations with mainland China.
Some polls have Tsai down as much as 30% against potential Kuomintang presidential nominee Eric Chu, who she defeated in 2016.
Asked if there was anything she regretted from her first term in office, Tsai said she felt she had spent too little time talking with voters in her first two years in power.
"I spent too much time in managing the government affairs and I spent a lot of time making foreign visits to our diplomatic allies," she said. "Many people thought I was a bit detached from them."
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