Taiwan Proposes Record $35 Billion Defense Budget for 2027

Taiwan's government has proposed a record defense budget of 1.12 trillion Taiwan dollars ($35 billion) for 2027, marking a significant escalation in the island's efforts to counter China's military pressure. The proposed spending represents an 18% increase over last year's budget and would push defense outlays above 3% of Taiwan's estimated GDP for the first time.

The proposal comes as China continues to assert its sovereignty claims over Taiwan through regular military deployments, including aircraft, coast guard ships, and other vessels near the island. Beijing has also conducted large-scale military exercises and has not ruled out the use of force to bring Taiwan under its control.

Taiwan's President Lai Ching-te had previously pledged to raise defense spending to 5% of GDP by 2030. Earlier this week, Lai said the defense budget would exceed 1 trillion Taiwan dollars for the first time, framing the investment as one in peace.

The budget proposal will now go to the opposition-controlled legislature for review before late August. However, the process may face hurdles — lawmakers only passed the central government's 2026 budget last Friday, after a record 266-day delay.

The announcement follows Taiwan's recent intensification of its annual Han Kuang drills, which this year incorporated reservists and more civilians into exercises focused on real-world scenarios. The drills included temporarily slowing mobile internet in parts of Taiwan to text-only speed.

The United States has long been Taiwan's main informal backer and arms supplier, despite not having formal diplomatic relations with the island. Washington has urged Taiwan to increase its defense spending. During U.S. President Donald Trump's visit to Beijing in May, China's President Xi Jinping warned that the two countries could clash over Taiwan if the issue is mishandled. Trump later described arms sales to Taiwan as a "very good negotiating chip" with China, a comment that stirred anxiety on the island.

Taiwan and China have been governed separately since 1949, when the Chinese Civil War brought the Communist Party to power in Beijing and defeated Nationalist forces fled to Taiwan.