Taiwan will raise its defence budget to more than three per cent of GDP in 2026. Premier Cho Jung-tai announced the move on Thursday. The decision comes as China’s military pressure continues to rise and Washington pushes Taipei to invest more in its security.
Cho said the increase was “another concrete demonstration to the world and the people of Taiwan of our resolve and ability to safeguard national sovereignty and security.” The new budget must still pass the opposition-controlled legislature before it becomes law.
Big Jump in 2026 Budget
Budget papers show Taiwan plans to spend US$31.1 billion on defence in 2026. This equals 3.32 per cent of GDP, which is 22.9 per cent higher than in 2025. The figure includes Coast Guard Administration spending and military retirement benefits. These were not counted in last year’s budget.
Cho first gave several 3.23 per cent at the press briefing. Later, officials clarified the correct number was slightly higher. “Our total defence budget is calculated using NATO’s model and standards,” Cho explained.
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Taiwan’s overall government spending for 2026 will be just over NT$3 trillion. This is a 3.8 per cent increase compared to 2025.
Analysts See Gaps
Military analyst Chieh Chung from the Association of Strategic Foresight said the real core defence budget would be 2.84 per cent of GDP if pensions and coast guard costs are excluded.
“As for Washington’s reaction, I think it will welcome Taiwan’s move to increase its defence budget, but it is still far from what they would be satisfied with,” he said.
US Pressure & Politics at Home
President Lai Ching-te has already promised to push defence spending above three per cent. This matches US calls for allies to do more for their defence.
At the same time, Taipei is negotiating with the US President Donald Trump’s administration for tariff relief. Earlier this month, Trump placed a 20 per cent tariff on Taiwanese goods as part of his trade war strategy. Talks are still going on.
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Domestic politics may also slow the plan. The China-friendly Kuomintang (KMT) controls the legislature with support from the Taiwan People’s Party. In 2025, the KMT cut some defence allocations. Analyst Chieh noted that a KMT-backed increase for military personnel benefits is missing in the 2026 plan. This could cause friction in budget debates.
Chance Hsu, the KMT’s assistant director of international affairs, said the party supports more defence spending. But he stressed that Taiwan should focus on manpower shortages, asymmetric warfare, and modern training.
Facing China’s Military Power
Taiwan has increased local defence production and bought advanced weapons in recent years. Still, it remains heavily dependent on US arms sales.
Experts warn that in a full-scale war with China, Taiwan would still be weaker even with increased spending. Beijing maintains its territorial claims to Taiwan and has threatened to annex it militarily.
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