Taiwan's government has proposed an 18% increase in defense spending for 2027, bringing the budget to NT$1.1225 trillion ($31.41 billion) and surpassing 1 trillion New Taiwan dollars for the first time.
The increase will fund drones, missiles, and other military modernization as Taiwan faces China's intensifying military and political pressure.
President Lai Ching-te has embraced U.S. calls for higher defense spending, but the budget still requires approval from Taiwan's opposition-dominated parliament, which has a track record of delays and approving only part of what the government requests.
What happened
Taiwan's government proposed an 18% increase in defense spending for 2027, raising the budget to NT$1.1225 trillion ($31.41 billion) — exceeding 1 trillion New Taiwan dollars for the first time. The increase will fund supplementary spending on drones and missiles, areas where the government previously could not secure parliamentary approval.
Why it matters
The move responds to China's ramped-up military and political pressure, which Beijing uses to assert its claim over Taiwan — a claim Taipei rejects. President Lai Ching-te has also embraced U.S. calls for Taiwan to spend more on defense, mirroring Washington's pressure on Europe. The budget will exceed 3% of gross domestic product, signaling a major commitment to military modernization.
What to watch
Taiwan's opposition-dominated parliament must approve the budget. The same parliament passed this year's spending only after months of delays, and approved just $25 billion in extra defense funds in May — roughly two-thirds of what the government sought — excluding money for domestic programs like drones. The opposition says it will not write blank checks, though it has stressed support for defense spending.
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Taiwan's proposed 18% increase in defense spending reflects a sharpening strategic challenge. China operates almost daily in the waters and skies around Taiwan and has been deploying new tactics, such as coastguard patrols off Taiwan's east coast. The government has positioned military modernization — including domestically developed submarines — as a core policy platform in response to what it describes as a rising threat from Beijing. This week Taiwan completed its annual Han Kuang military drills, which simulated breaking a potential Chinese maritime blockade; China's Defense Ministry dismissed the drills as a "wasteful charade." President Lai's embrace of U.S. pressure for higher defense spending parallels Washington's calls on European allies to increase military budgets. However, Lai faces a structural constraint: Taiwan's opposition-dominated parliament has already shown it will not rubber-stamp defense proposals, having approved only roughly two-thirds of the government's request in May and delayed this year's budget for months before final passage.
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