Taiwan’s President William Lai Ching-te rolled out a 2026 budget proposal on Thursday that included a massive 22.9 percent increase in defense spending, bringing Taiwan’s total outlay to over three percent of its Gross Domestic Product (GDP) for the first time since 2009.
According to Premier Cho Jung-tai, the 2026 budget includes $31.27 billion in defense spending in U.S. dollars, bringing Taiwan up to 3.32 percent of GDP.
Proposed uses for the additional funding include new jet fighters, stronger naval defenses, and more money for the Coast Guard, which has not previously been included as part of Taiwan’s defense budget. More funding was allocated for veterans’ benefits, which were also not part of the defense budget until now.
“This is another concrete demonstration to the world and to our people of our determination and ability to safeguard national sovereignty and security, maintain stability and security in the Indo-Pacific region, and fulfil our shared responsibilities to the world,” said Cho.
President Lai noted the new budget would bring Taiwan up to the defense standards specified by the North Atlantic Treaty Organization (NATO). NATO’s current spending target is actually for five percent of GDP, which member states are supposed to reach by 2035.
President Donald Trump has been pushing hard for Taiwan to spend more on defense and to purchase more military equipment from the United States. Arms sales to Taiwan declined sharply under President Joe Biden, although Taiwan’s military budget increased overall to meet growing threats from China.
Bloomberg News on Thursday saw the huge new Taiwanese defense budget as an effort to “placate Trump,” who has “questioned the self-ruled archipelago’s commitment to protecting itself from China.”
Bloomberg noted that Lai touted the spending increase on social media by saying that “Taiwan fully demonstrates its determination to enhance self-defense,” which alludes to Trump’s criticism.
Last month, the Trump administration “strongly urged” Congress to increase appropriations for Taiwan to roughly $1 billion.
“Taiwan’s ability to credibly defend itself is vital for deterrence in the Indo-Pacific and important for safeguarding United States personnel in the event of a contingency,” the administration argued.
Read the full article here