Taiwan’s cabinet has approved a NT$550 billion special funding package to harden the island’s defenses and economy, earmarking NT$150 billion for new patrol vessels, drones, and intensified reserve and one-year conscription training, while also directing cash handouts and industry support to cushion tariff shocks. The move underscores President Lai Ching-te’s push to deter mounting military pressure from China as Taipei targets defense outlays of 5% of GDP by 2030.

Defense Outlays, Drones And Ships

The cabinet said the resilience package includes NT$150 billion dedicated to “boosting the self-ruled archipelago’s defenses,” listing patrol ships and unmanned systems among procurement priorities. “The spending would help increase our combat readiness,” Defense Minister Wellington Koo told reporters, adding it would also bolster reserve training and the one-year mandatory service that Taiwan extended in 2024.

Strategic Context And Signals From Beijing And Washington

President Lai has made readiness central to his administration, following Taiwan’s most expansive annual drills in July. Beijing views the island as its territory and has warned it could use force; Chinese Defense Minister Dong Jun told his US counterpart this week that attempts to back Taiwan’s independence “would fail.” The US remains Taiwan’s main security partner, and Washington has pressed Taipei—like NATO allies—to invest more in its own defense. Lai said last month overall military spending is expected to reach 5% of GDP by 2030, with the government proposing NT$949.5 billion for next year, a 23% rise from 2024.

Economic Cushion And Political Path Ahead

Beyond defense, the cabinet folded NT$236 billion of cash handouts into the plan and set aside support for sectors hit by new US tariffs. Officials said the package will be financed via prior surpluses and some debt issuance. The measures still require legislative review, where an opposition bloc holds a slim majority—raising the prospect of debate over scale, composition and timelines before the plan can take effect.