Taiwan’s President Lai Ching-te on Wednesday announced a special US$40 billion budget for arms purchases, including to construct a Taiwan Dome, an air defence system with high-level detection and interception capabilities, as america pressures the island to extend its defence spending.
The budget shall be allocated over eight years, from 2026 to 2033, and comes after Lai already pledged to lift defence spending to 5 per cent of the island’s GDP, as a part of his strategy amid China’s threats of invasion.
“China’s threats to Taiwan and the Indo-Pacific region are escalating,” Lai said Wednesday. “Recently, various forms of military intrusions, maritime gray zones and disinformation campaigns have been occurring in Japan, the Philippines and across the Taiwan Strait, causing deep unease and distress to all parties within the region.”
“Taiwan, as an important and most important a part of the primary island chain, must display our determination and tackle a greater responsibility in self-defence,” he said, referring to the string of islands stretching from Japan’s East China Sea islands through the Philippines within the Pacific Ocean.
Currently, Taiwan has set a rise in its defence budget to three.3 per cent of its GDP for 2026, allocating $949.5 billion Taiwan dollars ($31.18 billion). U.S. President Donald Trump has demanded Taiwan raise its defence spending to as much as 10 per cent of GDP, a proportion well above what the U.S. or any of its major allies spend.
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Taiwan, a self-ruled island, is claimed by China. Lately, China has deployed warplanes, navy ships and drones toward the island each day in military exercises as a 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 could be used to buy arms from the U.S. He told reporters Wednesday, nevertheless, that the budget has nothing to do with the federal government’s tariff negotiations with the U.S.
Wellington Koo, Taiwan’s defence minister, said Wednesday the $40 billion is an upper limit for the special budget and that it’ll be used to purchase precision-strike missiles and toward the joint development and procurement between Taiwan and the U.S. of apparatus and systems.
Lai also said his government would concentrate on finding ways to extend its defence against Beijing’s “psychological warfare” as China attempts to “weaken our unity.” He said the federal 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 began after Japan’s conservative leader said the country might become involved militarily if China makes a move against Taiwan. The remarks incensed Beijing. Lai said Japanese Prime Minister Sanae Takaichi’s comments seemed to be focused largely on the soundness of the region.
“We hope China can understand that every country within the Indo-Pacific region has a responsibility to its peace and stability, and that we especially hope China, as a serious power within the region, would also display the responsibilities of a serious power,” Lai said. “As a substitute, it has continued to lift threats and attacks toward neighboring countries. This will not be the best way a responsible major power acts.”
© 2025 The Canadian Press