Taiwan Proposes Record $35 Billion Defense Budget as China Pressure Grows

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Taiwan’s government has proposed a record defense budget of about **NT$1.12 trillion ($35 billion) for 2027**, marking the first time its planned military spending has surpassed the NT$1 trillion threshold as Taipei seeks to strengthen its defenses against growing pressure from China.

The proposed budget represents an **18% increase** from the 2026 proposed budget. Government figures put defense spending at around **3.93% of Taiwan’s 2025 GDP**, up from about 3.23% this year, according to The Wall Street Journal. The package includes funding related to the coast guard, military pensions and special budgets for U.S. arms purchases.

President Lai Ching-te had previously pledged to raise defense spending to **5% of GDP by 2030**. He said earlier this week that next year's defense budget would exceed NT$1 trillion for the first time and described investment in national defense as an investment in peace.

Rising pressure from China

The proposed increase comes as China continues to exert military and political pressure on Taiwan.

Beijing claims Taiwan as part of its territory and has not ruled out using force to bring the island under its control. Chinese military aircraft, coast guard ships and other vessels regularly operate around Taiwan, while Beijing periodically conducts large-scale military exercises.

Taipei's strategy is to make any potential Chinese attack more difficult and costly by strengthening its military capabilities and improving its ability to respond to a possible invasion.

Taiwan recently intensified its annual **Han Kuang military exercises**, incorporating more reservists and civilians and placing greater emphasis on realistic scenarios involving a potential Chinese attack.

A message to Washington

The budget increase also comes amid pressure from the United States for Taiwan to spend more on its own defense.

Washington does not maintain formal diplomatic relations with Taipei but remains Taiwan's main informal military backer and arms supplier. Under U.S. law, Washington is required to provide Taiwan with the means to defend itself.

The proposed budget therefore signals to Washington that Taipei is increasing its own contribution to regional security and is prepared to spend more on U.S.-supplied weapons.

But purchasing those weapons depends on U.S. approval. The Wall Street Journal reported that Trump has withheld approval for a **$14 billion arms package**, describing Taiwan arms sales as a “very good negotiating chip” with China.

That creates uncertainty over how quickly the additional spending can translate into new military capabilities.

Domestic political challenge

The proposal must also pass Taiwan’s opposition-controlled legislature, where defense spending has already faced political resistance.

Taiwan’s legislature only recently approved the government's 2026 budget after a record **266-day delay**, according to AP. Opposition lawmakers have repeatedly challenged or reduced military spending requests from Lai’s administration.

The same political divisions could therefore complicate approval of the proposed record defense budget.

The China-U.S. factor

The spending plan also comes at a sensitive moment in U.S.-China relations.

Chinese President Xi Jinping is expected to visit the White House in September, with further meetings between Trump and Xi potentially following. The Wall Street Journal said this could create additional pressure on Washington over Taiwan arms sales as Trump seeks to manage relations with Beijing.

For Taiwan, the proposed budget represents both a military investment and a strategic signal: Taipei wants to strengthen its ability to deter China while demonstrating to the United States that it is prepared to shoulder more of the cost of its own defense.

The immediate test, however, will be whether the opposition-controlled legislature approves the record spending plan and whether Washington authorizes the weapons Taiwan intends to purchase.

Taiwan is proposing its largest-ever defense budget at a time of heightened Chinese military pressure and strong U.S. demands for greater burden-sharing. The size of the increase signals a significant shift toward greater self-defense, but political resistance in Taipei and uncertainty over U.S. arms approvals could determine how much of that spending becomes actual military capability.