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Taiwan’s Lai Unveils $40 Billion Multi‑Year Defense Plan to Deter China

Parliamentary approval is uncertain given KMT control of the budget.

Overview

  • Lai Ching‑te announced the plan in a Washington Post op‑ed, saying the goal is to increase the cost and uncertainty of any Chinese decision to use force.
  • The package would fund significant new U.S. weapons purchases and accelerate programs such as the T‑Dome multi‑layer air defense system to strengthen Taiwan’s capabilities.
  • Lai set a target for a high level of joint combat readiness by 2027, underscoring a near‑term focus on preparedness.
  • For 2026 the government proposes NT$949.5 billion in defense spending, equal to 3.32% of GDP, with a stated aim of reaching 5% by 2030.
  • The Kuomintang, led by chair Cheng Li‑wun, has opposed the higher outlays and holds sway over finances, while the U.S. recently approved a $330 million arms sale and urged parties in Taipei to find common ground on defense.