Taiwan has announced a massive $40 billion supplementary defence budget, signalling its firm resolve to protect its sovereignty as tensions with China continue to escalate. President Lai Ching-te revealed the T$1.25 trillion package on Wednesday, describing it as a critical step to safeguard the island’s future. He stressed that history shows compromise in the face of aggression only leads to “enslavement.”
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Speaking at the presidential office, Lai asserted that national security leaves no space for concessions. He said Taiwan’s freedom, democracy, and sovereign identity form the foundation of the nation, and cannot be negotiated under external pressure. Lai first outlined the plan in an op-ed for the Washington Post a day earlier.
Our security, our democracy—our responsibility. Today I announced major initiatives to safeguard peace in the Taiwan Strait, including a landmark special defense budget of US$40 billion. This multi-year package will vastly enhance #Taiwan‘s asymmetric capabilities. pic.twitter.com/b3pUM4SJyg
— 賴清德Lai Ching-te (@ChingteLai) November 26, 2025
The president emphasized that Taiwan’s challenge is not merely ideological but existential. “It is a struggle between defending democratic Taiwan and refusing to submit to becoming ‘China’s Taiwan’,” he remarked. China, which claims Taiwan as its own territory, has intensified military and political pressure over the past five years, actions Taiwan strongly rejects.
Responding from Beijing, China’s Taiwan Affairs Office accused Taipei of yielding to foreign influence. Spokesperson Peng Qingen criticised Taiwan for spending heavily on defence instead of improving domestic welfare and economic development, warning that such policies would “plunge Taiwan into disaster.” He said Taiwan was using funds to curry favour with external powers, particularly the United States.
Taiwan’s president to propose $40 billion in extra defence spending as the democratic island seeks to deter a potential Chinese invasionhttps://t.co/lLw5A1T4Ky pic.twitter.com/HmNP7HkALq
— AFP News Agency (@AFP) November 26, 2025
Under growing calls from Washington to strengthen its self-defence capabilities, Taiwan has been steadily increasing its annual military spending. Lai aims to raise defence expenditure to 5 percent of GDP by 2030. Government figures show that in 2026, spending will reach T$949.5 billion, or 3.32 percent of GDP — the highest since 2009.
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The United States, though without formal diplomatic ties to Taiwan, is legally bound to support the island’s defence needs. However, since President Donald Trump took office, only one new arms sale — a $330 million package for aircraft parts — has been approved.