Taiwan announces $40-B budget for purchases of precision missiles
TAIPEI—Taiwan’s President Lai Ching-te on Wednesday announced a special $40-billion budget for arms purchases, including to build a Taiwan Dome, an air defense system with high-level detection and interception capabilities, as the US pressures the island to increase its defense spending.
The budget will be allocated over eight years, from 2026 to 2033, and comes after Lai already pledged to raise defense spending to 5 percent of the island’s gross domestic product (GDP), as part of an ongoing strategy amid China’s threats of invasion.
“China’s threats to Taiwan and the Indo-Pacific region are escalating,” Lai said on Wednesday. “Recently, various types of military intrusions, maritime gray zones and disinformation campaigns have been occurring in Japan, the Philippines and around the Taiwan Strait, causing deep unease and distress to all parties in the region.”
‘Self-defense’
“Taiwan, as the most important and most critical part of the first island chain, must demonstrate our determination and take on a greater responsibility in self-defense,” he said, referring to the string of islands stretching from Japan’s East China Sea islands through the Philippines in the Pacific Ocean.
Currently, Taiwan has set an increase in its defense budget to 3.3 percent of its GDP for 2026, allocating $949.5 billion New Taiwan Dollars ($31.18 billion). US President Donald Trump has demanded Taiwan raise its defense spending to as much as 10 percent of GDP, a proportion well above what the United States or any of its major allies spend.
Taiwan, a self-ruled island, is claimed by China. In recent years, China has deployed warplanes, navy ships and drones toward the island on a daily basis in military exercises as part of its efforts to exert pressure.
Lai had previewed the announcement in an op-ed for the Washington Post on Wednesday, saying the special budget would be used to purchase arms from the United States. He told reporters on Wednesday, however, that the budget has nothing to do with the government’s ongoing tariff negotiations with the US.
‘Psychological warfare’
Wellington Koo, Taiwan’s minister of national defense, said on Wednesday the $40 billion is an upper limit for the special budget and that it will be used to buy precision-strike missiles and toward the joint development and procurement between Taiwan and the US of equipment and systems.
