Taiwan plans extra $40 billion in defence spending to counter China

Thursday, November 27, 2025 -Taiwan is moving decisively to bolster its defense with a $40 billion supplementary budget announced by President Lai Ching-te. 

The package, set to run from 2026 to 2033, aims to strengthen Taiwan’s military with missiles, drones, and the new T-Dome air defense system, signaling an urgent response to escalating threats from China. 

Lai emphasized that national security leaves “no room for compromise,” framing the spending as critical to defending Taiwan’s sovereignty, freedom, and democratic values.

The announcement follows calls from Washington for Taiwan to increase its own defense spending, echoing U.S. pressure on European allies to bolster their militaries. 

For 2026 alone, Taiwan plans $30.3 billion in defense outlays, reaching 3.32% of GDP, surpassing a key threshold not crossed since 2009. Defense Minister Wellington Koo described the budget as part of an “asymmetric” military strategy, designed to make Taiwan’s smaller forces agile and capable of delivering a concentrated, targeted response.

The move has drawn strong reactions abroad. The U.S. State Department and de facto ambassador in Taipei welcomed the plan, highlighting its role in strengthening deterrence and maintaining regional stability. 

Domestically, opposition voices warn of economic burdens and call for caution, but Lai remains firm, presenting the plan as essential for Taiwan’s future security in the face of persistent pressure from Beijing.