Taiwan’s government has unveiled a special budget bill that would allocate NT$550 billion (about $18 billion) to strengthen the island’s resilience amid U.S. tariffs and mounting Chinese threats. The cabinet‑approved plan targets industries hit by a 20 percent U.S. tariff and provides financial assistance to individuals, while also earmarking funds for defense upgrades. These upgrades include purchasing coast‑guard patrol boats, developing drones, and modernising the military’s command and control systems.
Defence Minister Wellington Koo said the funding will “increase our combat readiness” and “ensure operational resilience” as Chinese pressure on the island intensifies. In recent years, China has escalated grey‑zone harassment and military intimidation toward Taiwan, prompting heightened vigilance. Taiwan lives under the constant threat of invasion, with China claiming the self‑ruled island as its territory and warning it will use force to seize it.
Although Taiwan has increased military spending over the past decade, it remains heavily reliant on the United States for deterrence. President Lai Ching‑te has pledged to raise defence spending to 5 percent of GDP by 2030, with the 2026 defence budget projected to reach 3.32 percent of GDP. The proposed $18 billion allocation still requires approval from the opposition‑controlled parliament before it can take effect.
The budget move reflects Taiwan’s effort to reduce dependence on the United States and bolster its own defence capabilities. As Chinese threats grow, these resilience and defence measures are seen as crucial for preserving Taiwan’s sovereignty and security. The outcome of the bill’s approval and the implementation of its provisions will be closely watched both domestically and internationally, as Taiwan navigates its complex relationship with China and the United States.
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