President Lai Ching-te framed the plan as essential to raising deterrence and accelerating U.S. arms purchases. He said the new spending is intended to inject uncertainty and greater cost into Beijing’s calculus.

The government aims to push defense spending to 5% of GDP by 2030, marking a structural shift after years of incremental increases.

Major Budget Surge Signals Strategic Shift

The government introduced a US$40 billion supplementary package intended to modernize forces and expand an asymmetric defense posture.

Current planning raises next year’s defense allocation to T$949.5 billion (about US$30.25 billion), equivalent to 3.32% of GDP, the first time the threshold surpasses 3% since 2009.

Officials said the increase will support new U.S. systems and enhance Taiwan’s ability to blunt or delay a cross-strait assault.

“Bolster Deterrence” Against Heightened Pressure

Lai said the objective is to “bolster deterrence” by imposing greater risks and uncertainties on any potential military action.

He emphasized that Taiwan rejects Beijing’s sovereignty claims, while warning that sustained air and naval drills have elevated operational strain on the island’s forces.

The budget aims to expand capabilities tailored to impose costs on an invasion, including dispersed systems and survivable platforms.

U.S. Support and Limited Arms Transfers

Although political ties remain unofficial, Washington is legally required to support Taiwan’s self-defense. So far under the current U.S. administration, only one arms package—valued at US$330 million for fighter-jet and aircraft components—has been approved.

Lai publicly thanked the U.S. for continued backing and described its broader security posture as rooted in “peace through strength.”

Dialogue Offers and Strategic Realities

Lai reiterated an openness to cross-strait dialogue but stressed that “democracy and freedom remain non-negotiable.”

Beijing has repeatedly dismissed his overtures, labeling him a “separatist.” Analysts say the new spending trajectory places Taiwan on a path toward unprecedented readiness as it navigates the Indo-Pacific’s increasingly contested environment.