Taiwan plans to boost defense spending above 3% of GDP
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Taiwan's Premier Cho Jung-tai announced a proposed 2026 defense budget of NT$949.5 billion, exceeding 3% of GDP, in response to growing US pressure for increased military spending.
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M1A2T Abrams main battle tanks are prepared for a military live-fire shooting training in Hsinchu County, Taiwan, Thursday, July 10, 2025. (AP)
Taiwan’s premier said Thursday that the government is preparing to raise its 2026 defense budget to exceed three percent of GDP as the island comes under pressure from the United States to commit more resources toward its security.
Premier Cho Jung-tai stated that the newest increase was "another concrete demonstration to the world and the people of Taiwan of our resolve and ability to safeguard national sovereignty and security."
The proposed budget still requires approval from the opposition-controlled parliament before it can take effect, with Taiwan’s cabinet setting aside NT$949.5 billion (US$31.1 billion), equal to 3.23% of GDP, for defense spending next year, as Cho explained at a news conference.
"Our total defence budget is calculated using NATO's model and standards, including the budget for... the coast guard," the prime minister added.
Cho said that the total expenditure for 2026 has been set at just over NT$3 trillion, marking an increase of NT$110 billion, or roughly 3.8%, compared with 2025.
Tariffs direct defense policy
President Lai Ching-te has earlier pledged to raise defense spending to above 3% of GDP as the United States pressed the island, along with other governments worldwide, to dedicate more resources to their own security.
The announcement comes as Taipei works to secure an agreement with US President Donald Trump’s administration for reduced tariffs on Taiwanese exports to the United States. Earlier in August, the US president imposed a 20% tariff on Taiwanese imports to the US as part of his sweeping tariff policy on the entire world.
The China-friendly Kuomintang party, which controls the island’s legislature with backing from the Taiwan People’s Party, trimmed the Lai government’s 2025 budget, which had initially planned to raise defense spending to a record NT$647 billion, or around 2.5% of GDP.
Although Taiwan has a domestic defense industry and has been modernizing its equipment, it would be outmatched in a conflict with China and depends significantly on US arms sales to strengthen its security capabilities.
