Taiwan Announces $40B Defense Budget to Boost Deterrence Against China
Taiwan Unveils $40 Billion Defense Budget to Counter Rising Threat From China
Taiwan announced a $40 billion supplementary defense budget to strengthen its ability to deter China, President Lai Ching-te said on Wednesday. The move comes as Beijing intensifies military and political pressure, while Taipei rejects China’s territorial claims. The new package, worth T$1.25 trillion, is part of Taiwan’s long-term plan to increase defense spending to 5% of GDP by 2030, in line with U.S. calls for the island to boost its own security investments.
Speaking at the presidential office, Lai said history shows that compromising in the face of aggression leads only to “enslavement.” “There is no room for compromise on national security,” he said. “This is a struggle between defending democratic Taiwan and refusing to become ‘China’s Taiwan’.”
The U.S. welcomed the announcement. A State Department spokesperson said the new budget strengthens Taiwan’s self-defense, while the de facto U.S. ambassador in Taipei, Raymond Greene, emphasized support for Taiwan’s “rapid acquisition of critical asymmetric capabilities.”
What the Budget Covers
Defense Minister Wellington Koo said the budget — spanning 2026 to 2033 — will fund:
- Missiles
- Drones
- Taiwan’s new “T-Dome” air defense system
In 2026 alone, defense spending is expected to reach 3.32% of GDP, the highest level since 2009. The proposal must still pass Taiwan’s opposition-controlled parliament.
Opposition Concerns
Kuomintang (KMT) chairwoman Cheng Li-wun urged caution, saying Taiwan must avoid escalating tensions and stressing that its people “love peace.” She did not say whether the KMT would vote against the budget. Tensions are also rising in the region. Japan recently warned that a Chinese attack on Taiwan could trigger Japanese military action. Lai criticized Beijing for issuing “multifaceted threats” toward its neighbors.
China’s Reaction
China’s Taiwan Affairs Office accused Taiwan of wasting resources and letting “external forces” influence its decisions. “This will only plunge Taiwan into disaster,” spokesperson Peng Qingen said.
Role of the United States
The U.S. is legally required to provide Taiwan with defensive arms. Since President Donald Trump took office, Washington has approved only one new arms sale — a $330 million package for fighter jet parts. However, U.S. officials told Reuters earlier this year that arms sales to Taiwan are expected to accelerate to levels exceeding Trump’s first term.
Lai said Taiwan’s partnership with the United States remains “rock-solid,” and noted that Trump recently reaffirmed that “Taiwan is Taiwan.”
He added that only the people of Taiwan can decide their future. Beijing continues to refuse talks, calling Lai a “separatist.”
Taiwan Plans $40B Military Spending Increase to Counter China
