Taiwan announces special budget of $40 billion for arms purchases to bolster defense

TAIPEI, Taiwan (AP) — Taiwan’s President Lai Ching-te said Wednesday he will put forth a special $40 billion budget for arms purchases, including to build a Taiwan Dome, an air defense system with high-level detection and interception capabilities, in the face of U.S. pressure for the island to increase its defense spending.

The budget will be allocated over eight years, from 2026 to 2033, and comes after Lai already pledged to raise defense spending to 5% of the island’s GDP.

Currently, Taiwan has budgeted an increase in its defense budget to 3.3% for 2026, allocating $949.5 billion New Taiwan Dollars ($31.18 billion).

Lai had previewed the announcement in an op-ed for the Washington Post on Wednesday, saying the special budget would be used to purchase arms from the U.S.

Wellington Koo, Taiwan’s minister of national defense, said Wednesday the $40 billion is an upper limit for the special budget and that it will be used to buy precision-strike missiles and toward the joint development and procurement between Taiwan and the U.S. of equipment and systems.