1. What defense spending increase is Taiwan’s president proposing?
President Lai Ching-te announced a $40 billion supplementary budget to purchase weapons and upgrade military capabilities. He plans to increase Taiwan’s defense spending from its current level to 3.3% of GDP by next year, with a commitment to reach 5% of GDP by 2030, marking the largest sustained military investment in Taiwan’s modern history.
2. Why is Taiwan ramping up military spending now?
Taiwan is responding to what Lai calls Beijing’s “unprecedented military buildup” and increasing provocations across the Taiwan Strait and Indo-Pacific region. U.S. sources have indicated that China’s military has been tasked with being invasion-capable by 2027, prompting Taiwan to accelerate its defensive preparations including development of a “T-Dome” air defense system to counter Chinese drones, missiles and warplanes.
3. What political obstacles does President Lai face in passing this budget?
Taiwan’s Legislative Yuan is controlled by the opposition Kuomintang (KMT) party, which takes a less confrontational stance toward Beijing than Lai’s Democratic Progressive Party and has previously held up budget approvals. To work around this constraint, Lai is reportedly planning to include Coast Guard funding under “Ocean Affairs” and categorize other expenditures as defense spending, similar to practices in other countries.
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4. How does this budget proposal fit into U.S.-China-Taiwan relations?
The announcement comes at a complicated time, as U.S.-China relations have warmed significantly following meetings between President Trump and Chinese President Xi Jinping, with a trade-war truce holding and Trump planning a state visit to China in April. While Washington has been demanding Taiwan increase defense spending, some U.S. officials like Deputy Undersecretary of Defense Eldridge Colby have suggested Taiwan should spend around 10% of GDP on defense, far exceeding Lai’s 5% commitment.
5. What role is Japan playing in Taiwan’s defense posture?
Japan is increasingly supporting Taiwan’s security, with Defense Minister Shinjiro Koizumi making a high-profile visit to Yonaguni, Japan’s island closest to Taiwan, to highlight fortification efforts along the strategic Ryukyu island chain. These islands, positioned between Japan and Taiwan, could present obstacles to any Chinese naval attempt to encircle or attack Taiwan from the north, with Lai publicly expressing appreciation for Japan’s support through what media dubbed “sushi diplomacy.”
Read more: Taiwan to muscle up defense spending by $40 billion
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