Taiwan’s 2026 defence budget to exceed 3% of GDP as US presses spending increase

TAIPEI – Taiwan plans to boost defence spending by a fifth in 2026, surpassing 3 per cent of gross domestic product (GDP), as it invests billions more in new equipment to better face down China and convince the United States that it takes seriously calls to bolster its military.

The move comes as China, which views democratically governed Taiwan as its own territory, has ramped up military and political pressure over the past five years to assert those claims, which Taipei strongly rejects.

But Taiwan also faces

calls from Washington to spend more on its own defence

, mirroring pressure from the US on Europe.

In August, President Lai Ching-te said he wanted to boost defence spending to more than 3 per cent of GDP in 2026.

Taiwanese Premier Cho Jung-tai told reporters that 2026 defence spending would reach T$949.5 billion (S$40 billion).

At 3.32 per cent of GDP, the figure crosses a threshold of 3 per cent for the first time since 2009, government figures showed.

“This is another concrete demonstration to the world and to our people of our determination and ability to safeguard national sovereignty and security, maintain stability and security in the Indo-Pacific region, and fulfil our shared responsibilities to the world,” Mr Cho said on Aug 21.

Taiwan was following the “Nato model” to include spending on the coast guard and veterans in total defence expenditure, he added.

That represents a rise of 22.9 per cent over 2025, Mr Hsieh Chi-hsien, head of the Defence Ministry’s comptroller bureau, told reporters.

The plans included several special defence budget proposals totalling T$117.6 billion for new fighter jets and to boost naval defences, among others, which had been widely expected from the Defence Ministry in the coming Parliament session in 2025.

Taiwan was including spending for the coast guard in its total defence budget for the first time, two senior officials briefed on the matter separately told Reuters, speaking on condition of anonymity.

“They are standing on the front line,” said one, referring to the coast guard, which figures in regular stand-offs with China’s coast guard and would, in time of war, be pressed into the navy’s efforts to defend Taiwan.

“Facing new types of threat, including grey-zone tactics, it is necessary to include the coast guard in defence spending,” the official said, referring to Chinese pressure tactics such as regular coast guard patrols near Taiwan’s islands.

Taiwan’s government has made military modernisation a key policy platform and has repeatedly pledged to spend more on its defences, given the rising threat from China, including developing made-in-Taiwan submarines.

China’s air force flies almost daily missions in the skies near Taiwan, and holds periodic war games, the last in April.

China is also rapidly modernising its armed forces, with new aircraft carriers, stealth fighter jets and missiles. REUTERS