Taiwan Prez Lai Ching-te increases defence budget spending to 3% of GDP

Lai emphasised Taiwan's commitment to safeguarding its sovereignty, reinforcing its self-defence capabilities, and enhancing national security in response to rising threats from authoritarian regimes

Taiwan President William Lai has announced plans to increase the country's defence spending to at least 3 per cent of GDP in 2025, hours after US President Donald Trump reiterated his intent to impose tariffs on Taiwanese semiconductor imports, Taipei Times reported.

Speaking at a news conference on Wednesday in Taipei following his first high-level national security meeting of the year, Lai said the government would propose a special budget to meet the 3 per cent target. He emphasised Taiwan's commitment to safeguarding its sovereignty, reinforcing its self-defence capabilities, and enhancing national security in response to rising threats from authoritarian regimes.

The move to expand defence spending aligns with Taiwan's broader efforts to strengthen its strategic position while addressing trade imbalances with the US Over the past eight years, Washington has approved $26.26 billion in arms sales to Taiwan, with $18.76 billion authorised during Trump's first term from 2017 to 2021, Lai said. He reiterated Taiwan's intention to accelerate military modernisation and deepen defence cooperation with the US

When asked whether Taiwan risks becoming a mere "pawn" in the ongoing US-China geopolitical rivalry, Lai dismissed the notion, stating, "We are a player, not a pawn. Taiwan is an indispensable member of the world and the region."

Lai's remarks followed Trump's statements in Washington earlier in the day, where he reaffirmed his stance on imposing tariffs on chip imports, reported Taipei Times.

After signing a presidential memorandum, Trump claimed Taiwan had "taken our [the US'] chip business away" and stressed that the planned economic measures would promote "fair" and "reciprocal" trade. The tariffs, which could take effect as early as April, are aimed at reducing the US trade deficit with several nations, including Taiwan.

Taiwan has consistently ranked among the top 10 countries contributing to the US trade deficit. During his presidential campaign, Trump urged Taiwan to significantly increase its defence budget and contribute more toward its security cooperation with the US.

Under former President Tsai Ing-wen, Taiwan's defence budget saw gradual increases, rising from NTD 365.8 billion ($11.2 billion) in 2016 to NTD 606.8 billion last year. However, it still fell short of the 3 per cent of GDP target that Tsai had pledged. Lai's proposed spending increase will require legislative approval before it can take effect.

For the current fiscal year, the Cabinet allocated NTD 647 billion for national defence, amounting to 2.45 per cent of GDP.

However, the opposition-led legislature has already cut NTD 8.4 billion from the budget and frozen another NTD 89.9 billion, according to the Directorate-General of Budget, Accounting and Statistics, Taipei Times reported.

The final decision on the central government budget remains pending, with lawmakers yet to finalise their revisions after adopting several reductions and spending freezes.