Taiwan to Launch $40 Billion Defence Budget Amid U.S. Pressure

Taiwan’s President Lai Ching-te announced on Wednesday, November 26, 2025, a special $40 billion budget for arms purchases over the next eight years, including the construction of a Taiwan Dome — an advanced air defence system with high-level detection and interception capabilities. The move comes amid continued U.S. pressure for Taiwan to bolster its defence spending in the face of increasing regional tensions.

The budget, to be allocated from 2026 to 2033, supplements Taiwan’s previously announced plan to raise defence spending to 5% of GDP. For 2026 alone, Taiwan’s defence budget is set at TWD 949.5 billion ($31.18 billion), an increase to 3.3% of GDP.

President Lai, in an op-ed for the Washington Post, said the special budget will primarily fund arms purchases from the United States.

Taiwan’s Minister of National Defence, Wellington Koo, clarified that the $40 billion represents the upper limit of the special budget. Funds will be used for precision-strike missiles and for joint development and procurement of military equipment and systems with the U.S.

Analysts see the move as part of Taiwan’s long-term strategy to strengthen its defensive capabilities amid heightened threats from mainland China and to ensure readiness in the Indo-Pacific security environment.