Taiwan unveils $40bn defence surge aimed at building an “unassailable” island

Taiwanese President William Lai Ching-te has announced a $40bn defence budget spread over eight years, saying the goal is to move closer to “the vision of an unassailable Taiwan, safeguarded by innovation and technology”.

The plan comes as Taipei continues to ramp up military spending under growing pressure from the Trump administration, which has pushed the island to invest more heavily in deterrence against a possible Chinese attempt to seize control.

Speaking in Taipei on Wednesday, Lai said Taiwan’s military aimed to achieve a “high level” of joint combat readiness against China by 2027, a year US officials have previously flagged as a potential window for Chinese military action.

“The ultimate goal is to establish defence capabilities that can permanently safeguard democratic Taiwan,” Lai said.

His announcement lands amid heightened regional tension, with Japan and China locked in a diplomatic row after Japanese Prime Minister Sanae Takaichi suggested Tokyo could intervene militarily if Taiwan were attacked, a scenario Beijing vehemently opposes as it continues to claim the island as its own territory.

The US welcomed the move. Raymond Greene, Washington’s top envoy in Taiwan, said he “welcomes” the spending plan and called on rival political parties to “find common ground” on strengthening defences.

Lai said the additional funds would support new US arms purchases and boost Taiwan’s capacity for asymmetrical warfare, but stressed the move was not linked to ongoing tariff negotiations with Washington. Instead, it was meant to “demonstrate Taiwan’s determination to defend” itself.

The plan follows US approval earlier this month of $330m in parts and components in the first military sale to Taiwan since Trump returned to office.

While Lai has pledged to raise defence spending to more than 3 percent of GDP next year and 5 percent by 2030, Trump has demanded it rise as high as 10 percent, a level far above what the US or its allies spend.

For next year, the government has proposed defence spending of 949.5bn New Taiwan dollars ($30bn), or 3.32 percent of GDP. The newly announced plan exceeds earlier estimates and will be directed in part towards accelerating development of the “T-Dome”, a multi-layered air defence system Lai says will push Taiwan closer to becoming “unassailable”.

Beijing has not welcomed the shift. Peng Qingen of China’s Taiwan Affairs Office accused Taipei of letting “external forces” dictate its decisions.

At home, Lai faces political resistance. Parliament is controlled by the opposition Kuomintang, which advocates closer ties with China and has voiced scepticism over the scale of the defence budget. Party chair Cheng Li-wun has warned that Taiwan simply “doesn’t have that much money”.