The United States issued what appeared to be opposite security invoices to Korea and Taiwan within four days. It asked Korea to scale back joint drills to deter North Korea, while telling Taiwan to buy weapons it can use to withstand a Chinese attack on its own. Both requests are seen as shifting the military burden previously shouldered directly by U.S. forces onto local countries. Taiwan responded immediately on the 20th by raising next year's defense budget above NT$1 trillion for the first time.
On the 20th, Taiwan's Executive Yuan said it finalized next year's defense budget bill at NT$1.1225 trillion (about 49.7 trillion won). It is the first time Taiwan's defense budget has exceeded NT$1 trillion. It is 18% more than this year's NT$949.5 billion (about 42 trillion won). The share of defense spending as a percentage of gross domestic product (GDP) also surpassed 3% for the first time. President Lai Ching-te said at a budget meeting that "putting money into defense is investing in peace."
Taiwan's defense budget will increase 73% in two years, from NT$647 billion (about 28.6 trillion won) in 2025 to NT$1.1225 trillion in 2027. Compared with 2024's NT$606.8 billion (about 26.9 trillion won), before President Lai Ching-te took office, it surged 85% in three years.
The Stockholm International Peace Research Institute (SIPRI) in April estimated Taiwan's 2025 military spending at $18.2 billion (about 25.2 trillion won). That is a 14% increase in one year from 2024, the largest annual growth rate since 1988. SIPRI is a Swedish think tank that tracks conflicts, military expenditure, and arms transfer, recalculating differing national accounting standards on a common basis to release global military spending each year.
In the same statistics, the share of military spending in Taiwan's GDP was 2.1%. Even though Taiwan is rapidly increasing military spending, its military burden as a share of GDP still falls short of Korea (2.6%) as well as the world average (2.5%). Despite facing China's military power directly, Taiwan's defense burden was not among the heaviest as of last year. Among the top 40 military spending countries, Taiwan ranked 22nd by absolute amount. It spent less on the military than Poland (14th) or Spain (15th).
President Lai Ching-te added that he would raise this to 5% of GDP by 2030. To achieve that, the budget set for next year would have to be nearly doubled again in three years. The target exceeds Poland (4.48%) and Lithuania (4.0%), which had the highest shares of defense spending last year by North Atlantic Treaty Organization (NATO) standards.
The increase in Taiwan's defense budget aligns with U.S. demands to buy key defensive weapons. U.S. Ministry of National Defense Policy Vice Minister Elbridge Colby on the 10th in Manila, the Philippines, urged Asian allies and partners to invest more in self-defense. In a speech at a Stratbase Institute forum, Colby emphasized that the counterparts the United States seeks are "partners, not protectorates." At his Senate confirmation hearing in March last year, he argued that Taiwan's defense spending should be raised to around 10% of GDP. AP said the United States has consistently urged Taiwan to expand defense expenditure.
However fast Taiwan increases its defense budget, it still cannot match China in total military spending. According to SIPRI, China spent $336 billion (about 465.6 trillion won) on the military last year, 18 times more than Taiwan. Yet its defense budget share was 1.7% of GDP, lower than Taiwan's. Even if Taiwan allocates 5% or 10% of GDP to defense, it will be difficult to narrow the total spending gap with China.
Bearing this in mind, the United States is recommending that Taiwan replenish drones, naval mines, mobile launchers, air defenses, and munitions rather than offensive weapons like fighter jets and warships. Experts described this as a "deterrence by denial" strategy, aimed at maximizing the expense China's military would pay to cross the Taiwan Strait and breaking its resolve to invade. Taiwan's Ministry of National Defense also agreed with this strategy. Specifically, it devised a defensive plan to build 200,000 coastal attack drones, unmanned surface vessels, and the T-Dome that integrates multilayered air defenses.
But a week before Taiwan's budget plan came out, on the 13th, the U.S. Navy moved the George Washington carrier strike group (CSG), which had covered the area around the Taiwan Strait, to the Middle East. The George Washington had served as a key asset deterring China's maritime sovereignty claims across the western Pacific and certifying security assurances to Korea and Japan. Going forward, it will take on a mission in Iran, replacing the Abraham Lincoln, rather than in the Taiwan Strait. Political outlet Axios noted that such a move could bolster China's claim that "U.S. security commitments are hard to trust."
Earlier, while pulling the George Washington out of the Taiwan Strait, the United States also reduced military drills on the Korean Peninsula. U.S. President Donald Trump on the 16th instructed Secretary of Defense Pete Hegseth to significantly scale back the South Korea-U.S. combined military exercises. The Ulchi Freedom Shield (UFS) exercise, initially set to start on the 17th and run through the 27th, was moved up to end on the 21st, a week early. Many field training drills were canceled or shifted to virtual training.
Richard Haass, president emeritus of the Council on Foreign Relations (CFR), wrote on social media X that "far from shifting the strategic focus to Asia, the United States is pulling back." He added, "China and North Korea will exploit this vacuum," and "our allies will despair or try to go nuclear."