Taiwan’s opposition-controlled parliament has passed the national budget after freezes and cuts observers say could alienate U.S. President Donald Trump, amid increasing Chinese pressure on the island democracy.
Newsweek reached out to Taiwan’s Foreign Ministry and the U.S.’s de facto embassy in Taipei with emailed requests for comment.
Why It Matters
The Republic of China, Taiwan’s official name, retreated to the island after its defeat by Communist forces in 1949. Taiwan functions as a sovereign state with its own government, military, and diplomatic relations. Beijing views the island as a breakaway province and has been ramping up military, economic, and political pressure on the island in recent years.
The U.S. is Taiwan’s top weapons supplier but maintains a decades-old policy of “strategic ambiguity,” keeping China guessing about whether it would step in directly if Taiwan were attacked. Comments made by Trump on the campaign trail, including a suggestion Taipei should pay Washington for defense, have raised questions about his commitment to the island.
What To Know
The opposition coalition—comprising the Kuomintang party and the smaller Taiwan People’s Party—NT$3.1 trillion ($95.6 billion) on Tuesday passed the national budget after shaving a record 6.6 percent off the $95.6 billion proposed by President Lai Ching-te.
They also froze nearly 40 percent of the country’s regular defense budget, half the budget for its new Indigenous submarine program, and one-third that would fund a new drone manufacturing park.
Taiwanese soldiers with a CM-34 armored vehicle take part in a drill at the Hukou base in Hsinchu on January 7. Taiwanese soldiers with a CM-34 armored vehicle take part in a drill at the Hukou base in Hsinchu on January 7. I-hwa Cheng/AFP via Getty Images
The budget submitted by the Lai administration in August marked a defense budget increase of just 2.45 percent, down from the 2.5 percent allotted last year.
Vice Minister of Defense Po Horng-huei said the freeze would hamper the military’s efforts to answer China’s near-daily provocations, which include warplane sorties into the island’s air defense identification zone and coast guard patrols within restricted waters of Taiwan’s outlying Kinmen island.
For years, many in Washington have called on Taiwan to signal a greater commitment to its own self-defense, urging it to significantly boost spending on weapons of asymmetric warfare such as cruise missiles.
“Taiwan’s meager defense spending is doubly problematic because, despite progress in formally adopting an asymmetric strategy, the bulk of the spending still goes to big-ticket items like fighter jets and warships that are expensive and extremely vulnerable to PLA (People’s Liberation Army) strikes,” Elbridge Colby, now Trump’s nominee for undersecretary of defense for policy, wrote last year.
What People Are Saying
Bonnie Glaser, managing director, U.S. Indo-Pacific Program’s German Marshall Fund:
“Taiwan lawmakers risk alienating Donald Trump with defense funds freeze.”
Lai Ching-te, Taiwan president:
“As Taiwan faces an increasingly complex international landscape, the government should allocate more resources to support the military and strengthen Taiwan’s foreign relations.”
“Without sufficient funding to continue reforms and enhance Taiwan’s defense capabilities, not only would the international community doubt Taiwan’s resolve for self-defense, the safety and security of all citizens would be at risk.”
Kuomintang, Taiwan’s main opposition party:
“The KMT fully supports budgets for critical infrastructure, national security, and public welfare. Freezing budgets isn’t deleting them—agencies are required to provide detailed and responsible reports to justify spending. Let’s ensure taxpayer money is used where it matters.”
What’s Next
Taipei is awaiting delivery of approximately $20 billion in U.S. arms sales approved by Congress, according to estimates from the Cato Institute.
U.S. intelligence officials, including CIA Director Bill Burns, believe Xi has instructed the People’s Liberation Army (PLA) to be capable of moving against Taiwan by 2027.
During Secretary of State Marco Rubio went further during his confirmation hearing last week, warning he believes Xi will pull the trigger “before the end of the decade” unless the costs of such an operation are dramatically increased.
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