Taiwan Approves $40bn Military Boost to Counter China

Taiwan announced plans to submit a proposal for an additional $40 billion in defence spending over eight years, as the island works to strengthen its deterrence posture amid heightened tensions with China. President Lai Ching-te said the objective was to ensure Taiwan maintained a high level of joint combat readiness by 2027, a timeline that U.S. officials have previously highlighted as a potential window for Chinese military action.

The island has steadily increased defence spending over the past decade as Chinese military activity in the region intensified. The new plan, unveiled by Lai in a news conference and an opinion piece, emphasizes long-term security and the development of advanced protective systems, including the multi-layered “T-Dome” air defence structure.

Lai reiterated that Taiwan has never been ruled by Beijing and emphasized the need to reinforce its defensive capabilities to safeguard its democratic system. The announcement came as Japan and China were engaged in a diplomatic dispute following comments by Japanese Prime Minister Sanae Takaichi, who suggested Japan might intervene militarily if China attacked Taiwan.

The United States welcomed the new spending proposal, urging political parties on the island to build consensus around national defence. Lai clarified that the funding plan is independent of ongoing tariff negotiations with the United States, stressing that it is solely intended to reinforce Taiwan’s capacity to deter aggression.

Earlier in the month, Washington approved $330 million worth of parts and components in its first military sale to Taiwan since Trump returned to office. The Taiwanese government had already proposed NT$949.5 billion (about $30 billion) for next year’s defence budget, representing 3.32 percent of GDP, with plans to raise it to more than five percent by 2030. However, the new eight-year spending package may face resistance in Taiwan’s parliament, where the opposition Kuomintang—favoring closer ties with China—holds significant influence and has previously criticized defence increases.

Lai nonetheless insisted that Taiwan remains committed to peace, stating that no country will be more determined to protect the island’s future than its own people.