Taiwan Proposes Record $35.2 Billion Defense Budget for 2027

The government of Taiwan proposed a record-high defense budget of 1.1225 trillion Taiwan dollars (approximately $35.2 billion) for 2027. This represents an 18% increase over the previous year and marks the first time the budget has exceeded the 1 trillion threshold, pushing military spending to roughly 3% of the island's GDP.

Lai Ching-te aims to raise defense spending to 5% of GDP by 2030, modeling the approach after NATO. The funds are earmarked for military modernization, including drones, missiles, the Coast Guard, and an indigenous submarine program. The proposal follows intensifying military and political pressure from China and calls from the United States for Taiwan to increase its self-defense expenditures.

The budget now faces a potentially difficult review by an opposition-controlled Legislative Yuan. Lawmakers have previously delayed budgets and are currently deadlocked over funding for unmanned aircraft and boats, with the Kuomintang party proposing spending caps that the government argues would hinder force development.

International reactions highlight the strategic stakes. U.S. President Donald Trump has described arms sales to Taiwan as a negotiating tool with China and has previously withheld a $14 billion arms package. Meanwhile, Japanese Prime Minister Sanae Takaichi stated that Japan would intervene if China invaded Taiwan.