Taiwan proposes a record $35B defense budget for 2027 as China’s military pressure grows
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- Taiwan's government proposed a record defense budget of 1.12 trillion Taiwan dollars ($35 billion) for 2027, exceeding 3% of estimated GDP and marking an 18% increase over the previous year's proposal.
- President Lai Ching-te has pledged to raise defense spending to 5% of GDP by 2030 and said the 2027 budget's crossing of 1 trillion TWD for the first time makes investing in national defense 'an investment in peace.'
- China has stepped up military and political pressure on the island — sending military aircraft, coast guard ships, and conducting large-scale exercises — while refusing to renounce the use of force.
- Taiwan's legislature only passed the 2026 central government budget last Friday after a record 266-day delay, raising uncertainty about the path for the 2027 proposal.
- Taiwan this month intensified its annual Han Kuang drills, adding reservists and civilians to invasion-response scenarios; mobile internet in parts of the island was briefly throttled to text-only speed.
- U.S. President Donald Trump, during a May visit to Beijing, told reporters arms sales to Taiwan were 'a very good negotiating chip' with China — comments that stirred anxieties on the island.
Why it matters: The $35 billion proposal — Taiwan's largest defense budget ever — is a concrete response to long-standing U.S. demands that Taipei shoulder more of its own defense burden under Washington's informal backing framework. But the budget still faces an opposition-controlled legislature that took a record 266 days to pass the prior year's spending, and Trump's characterization of Taiwan arms sales as a bargaining chip with Xi Jinping signals Taipei's access to U.S. weapons remains negotiable, not guaranteed.
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