Taiwan’s Premier Cho Jung-tai addressed concerns on Wednesday regarding the possibility of raising defense spending to 10 percent of the island’s gross domestic product (GDP), stating that such an increase is “impossible” within the current financial framework. This assertion comes amidst growing calls from the United States for Taiwan to enhance its military expenditures as tensions escalate in the region, particularly between China and the United States.
Taiwan, a self-ruled democracy that China considers part of its territory, faces increasing military pressure from Beijing, which has not ruled out the use of force to achieve its aims. The U.S., as Taiwan’s primary ally and arms supplier, has been vocal in its support for bolstering Taiwan’s defense capabilities. During a recent parliamentary session, an opposition lawmaker questioned the feasibility of raising defense spending to an estimated NT$2.6 trillion (approximately $78.88 billion), equivalent to 10 percent of Taiwan’s projected GDP. Cho responded firmly, indicating that the proposed budget increase is beyond the current budget’s scope.
The government’s current projection for the 2025 GDP stands at around NT$26.88 trillion. However, significant budget cuts in early January by the opposition-controlled parliament saw the total planned budget for 2025 trimmed down to approximately NT$2.9 trillion, a reduction from an initial proposal of NT$3.1 trillion. The opposition bloc has thus far resisted calls to revisit these budgetary constraints, complicating the government’s defense planning.
Former U.S. President Donald Trump had previously advocated for Taiwan to uplift its military budget to 10 percent of GDP during his campaign last year, a sentiment echoed by Elbridge Colby, a senior defense adviser involved in a Senate hearing this month. Premier Cho acknowledged the continuing request from U.S. officials but reiterated the limitations within Taiwan’s financial capabilities, stating, “At this stage, the Republic of China absolutely does not have the capacity to compile a defense budget of NT$2.6 trillion.”
The Taiwanese government had already earmarked a record NT$647 billion for defense spending in 2025, representing about 2.5 percent of the GDP. However, challenges to fulfilling this aim have emerged as some defense initiatives have faced cuts or freezes. Notably, a 50 percent freeze has been placed on spending allocated for Taiwan’s submarine program and the development of a drone industry park, raising concerns among lawmakers.
President Lai Ching-te’s administration has expressed apprehensions that the budget reductions could significantly impair Taiwan’s governance capabilities and pose risks to its security. He has indicated a commitment to prioritize “special budgets” to surpass a 3 percent defense spending threshold as a demonstration of Taiwan’s resolve for self-defense.
As the situation evolves, the backdrop of increased military drills by China and frequent incursions of warplanes and naval vessels near Taiwan continues to heighten tensions in the Taiwan Strait, making the need for a robust defense strategy more pertinent than ever.
