Currently, Taiwan has set an increase in its defense budget to 3.3% of its GDP for 2026, allocating $949.5 billion New Taiwan Dollars ($31.18 billion). U.S. President Donald Trump has demanded Taiwan raise its defense spending to as much as 10% of GDP, a proportion well above what the U.S. 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 U.S. He told reporters Wednesday, however, that the budget has nothing to do with the government’s ongoing tariff negotiations with the U.S.
Wellington Koo, Taiwan’s minister of national defense, said 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 U.S. of equipment and systems.
Lai also said his government would focus on finding ways to increase its defense against Beijing’s “psychological warfare” as China attempts to “weaken our unity.” He said the government will monitor and increase public awareness of China’s interference attempts during major events and elections.
Lai also commented on an escalating feud between China and Japan, which started after Japan’s conservative leader said the country might get involved militarily if China makes a move against Taiwan. The remarks incensed Beijing. Lai said Japanese Prime Minister Sanae Takaichi ‘s comments appeared to be focused largely on the stability of the region.
“We hope China can understand that each country in the Indo-Pacific region has a responsibility to its peace and stability, and that we especially hope China, as a major power in the region, would also demonstrate the responsibilities of a major power,” Lai said. “Instead, it has continued to raise threats and attacks toward neighboring countries. This is not the way a responsible major power acts.”
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AP writer Huizhong Wu reported from Bangkok.
Taijing Wu And Huizhong Wu, The Associated Press
