Taiwan’s government announced a sweeping $18 billion plan aimed at strengthening the island’s economic resilience and military defenses in the face of mounting Chinese pressure. The cabinet approved a special budget bill on Thursday, though it still requires approval from the opposition-led parliament before it can be enacted.
The NT$550 billion ($18 billion) package is designed to support industries affected by the U.S. 20% tariffs, alongside direct financial aid for citizens. A significant portion NT$150 billion is earmarked for defense upgrades, including purchasing additional coast guard patrol boats, expanding drone capabilities, and enhancing military command and control systems.
Defence Minister Wellington Koo stressed the urgency of the funding, saying it will “increase our combat readiness” and bolster “operational resilience” amid what he described as intensified grey-zone harassment and military intimidation by China.
“In recent years, China’s actions have grown increasingly aggressive,” Koo said. “We cannot ignore these threats. We must remain vigilant and prepared.”
Taiwan continues to face the persistent threat of invasion from China, which claims the island as its territory and has repeatedly threatened to use force to achieve reunification. While Taiwan has boosted military spending steadily over the past decade, it still relies heavily on U.S. support to deter potential Chinese aggression.
Last month, President Lai Ching-te outlined plans for defense spending to reach five percent of Taiwan’s GDP by 2030, with the 2026 defense budget expected to increase to 3.32% of GDP as part of the island’s ongoing efforts to strengthen its security posture.
