Taiwan legislature advances special defense budget amid uncertainty over US arms sales

Taiwan's legislature passed the initial review of the 2026 defense special budget on May 27, though experts cautioned that significant uncertainty remains over the second tranche of US arms sales to Taiwan.

Taiwan’s Executive Yuan had originally proposed a NT$1.25 trillion (about US$40 billion) defense special budget, which lawmakers trimmed to a ceiling of NT$780 billion before passage. 

The budget is structured in two phases. The first phase covers military procurement from the United States and is allocated on an annual basis, with total requirements estimated at approximately NT$293 billion. 

The Executive Yuan's 2026 special budget proposal of roughly NT$8.8 billion cleared the legislature on May 27 following cross-party negotiations, with a symbolic NT$2 million cut agreed upon before the initial review was approved.

MND’s report for budget review

Defense Minister Koo Li-hsiung (顧立雄) told legislators during the budget review that 2026 expenditures would cover weapons procurement, integrated logistics support, engineering facilities, and acquisition costs. 

Planned purchases include M109A7 self-propelled howitzers, HIMARS multiple-launch rocket systems, anti-armor drone missile systems, TOW 2B anti-armor missile stockpile replenishment, TOW 2B anti-armor missile systems, and Javelin anti-armor missile systems.

Koo noted that the People's Liberation Army (PLA) has shifted its operational doctrine from a "beachhead assault" to a "sea-air combined, high-tempo island seizure" model, aiming to seize air superiority over the Taiwan Strait, degrade Taiwan's air defense capabilities, and paralyze command and control. 

In response, the Taiwan military will strengthen its integrated joint warfare effectiveness across three operational phases, including comprehensive air defense and missile defense, joint anti-landing operations, and joint homeland defense.

Second-phase arms sales in limbo

The second phase of Taiwan's defense special budget covers US arms sale items approved by the American government within one year of the law's enactment. 

These include soft-kill and hard-kill counter-drone systems, various anti-ballistic and air defense missiles, low-to-medium altitude air defense systems, and anti-armor missile stockpile replenishment.

This second tranche — commonly referred to as approximately $14 billion in US arms purchases — is currently awaiting approval from President Donald Trump.

At a congressional hearing on May 24, Hung Cao, the acting US Secretary of the Navy, was asked about arms sales to Taiwan. "Right now we're doing a pause in order to make sure we have the munitions we need for Epic Fury, which we have plenty," he said, adding that "the foreign military sales will continue when the administration deems necessary."

Cao's remarks sparked debate in Taiwan. Chen Kuan-ting (陳冠廷), convener of Taiwan's Foreign Affairs and National Defense Committee, told reporters that he has repeatedly warned, both domestically and internationally, that excessive US military engagement in the Middle East would inevitably affect the allocation of military assets in the Indo-Pacific and the pace of arms deliveries to Taiwan. 

Chen urged that Taiwan's security must not become a bargaining chip in any international negotiation, stressing that stability in the Taiwan Strait is itself a vital global interest.

Caution without overreaction

Wang Hung-jen (王宏仁), a professor of political science at National Cheng Kung University, told TCN that outside observers may not need to read too much into Cao's remarks, since decisions on arms sales to Taiwan are ultimately driven by the US president, not the acting Navy secretary.

Su Tzu-yun (蘇紫雲), director of the Division of Defense Strategy and Resources at Taiwan's Institute for National Defense and Security Research (INDSR), echoed that view, telling TCN that Trump himself remains the central figure shaping the direction of US arms sales to Taiwan. 

Su also noted that Cao's characterization may not be entirely accurate. While the US has indeed delayed some arms deliveries to Japan due to heavy consumption of Tomahawk cruise missiles, Su said most of the air defense missile systems Taiwan has ordered carry delivery timelines of four to five years and would not face immediate disruption.

Uncertainty remains

Both experts agreed that meaningful uncertainty persists around US arms sales to Taiwan.

Wang warned that the budget, having been cut to approximately NT$780 billion — roughly half the original proposal — could affect how Washington perceives Taipei's commitment to defense. 

He said high uncertainty remains around US arms sales, and whether the approved amount meets American expectations is still an open question. 

If Washington concludes that Taiwan has failed to follow through on the procurement scale previously discussed between the two sides, the Trump administration may choose to delay approving the arms sales as a bargaining chip in negotiations with Beijing, Wang said.

With Chinese President Xi Jinping (習近平) potentially visiting the US in September, and with US-China negotiations ongoing across areas including agricultural products, commercial aircraft, energy, and TikTok, Wang said the Trump administration could use a pause in Taiwan arms sales as leverage with Beijing. 

He suggested Washington may not make a definitive decision on the pending arms sales before Xi's prospective visit.

Wang also noted that the version passed by the legislature requires the US to first provide a Letter of Offer and Acceptance (LOA) before Taiwan can release procurement funds — an arrangement that does not conform to standard international arms sale practice.

Su similarly sees ongoing uncertainty ahead. While overall signals suggest US policy toward Taiwan has not fundamentally changed, he said the unpredictability of the current US president's leadership style means nothing can be taken for granted.

The worst-case scenario

Asked what impact it would have if the US ultimately declined to proceed with the arms sales, Su said it would send an extremely serious strategic signal. 

Given that Taiwan's procurement list is largely defensive in nature, Su said any politically motivated halt would indicate that Beijing has already achieved real influence over US decision-making.

Wang offered a similar assessment, warning that if Washington adjusts its arms sales policy toward Taiwan due to pressure from China, it could undermine the credibility of the Six Assurances as a whole. 

If Beijing's influence were allowed to shape US arms sales decisions, Wang argued, the international community would inevitably question whether other elements of the Six Assurances could also be subject to revision — making this not merely an arms procurement issue, but a challenge to the broader regional security architecture.

Wang further noted that a US decision to halt arms sales would set back Taiwan's military capability development, particularly its ongoing efforts to build out drone systems, air defense systems, and the broader "porcupine strategy."

Defense self-reliance

Su argued that even with the Taiwan Relations Act, the Six Assurances, and the Three Communiqués in place, the US is under no legal obligation to actually sell weapons to Taiwan — meaning Taipei must place greater emphasis on developing its own defense industry rather than relying too heavily on external factors.

He pointed out that the original NT$1.25 trillion plan, now reduced to NT$780 billion, leaves approximately NT$470 billion in items unaccounted for — and those cut items are, in many respects, more critical to Taiwan's indigenous defense buildup.

Should the worst case materialize and the US ultimately withholds approval for the arms sales, Su said Taiwan must return to the core principle of defense self-reliance. 

Only by strengthening its own defense industry and capabilities can Taiwan increase its allies' willingness to come to its defense. "Strength brings peace," he said. "Strength brings a voice."