Taiwan’s Lai sets defence spending target at 5% of GDP

Taiwan’s government aims to increase defence spending to 5% of GDP by 2030, President Lai Ching-te said on Friday (August 22, 2025), as the United States pushes Taipei to invest more in its own security.

Taiwan lives under the constant threat of invasion by China, which claims the self-ruled island is part of its territory and has threatened to seize it by force.

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The island has ramped up spending on military equipment and weapons over the past decade, but it remains heavily reliant on the United States to deter a Chinese attack.

Spending was expected to “reach 5% of GDP by 2030, in line with NATO standards,” Mr. Lai said, during a visit to the Navy’s 168th Fleet in northeastern Taiwan, according to a presidential statement.

Mr. Lai’s remarks came a day after his government announced plans to increase the 2026 defence budget to 3.32% of gross domestic product.

It also comes as Taipei seeks to strike an agreement with U.S. President Donald Trump’s administration for a lower tariff on Taiwanese shipments to the United States.

Trump imposed a temporary 20-percent tariff this month on Taiwan’s imports as part of his global trade war. Negotiations are ongoing.

The Lai government’s proposed defence spending for 2026 needs to be approved by the opposition-controlled parliament before it can take effect.

The allocation of NT$949.5 billion (US$31.1 billion) was an increase of 22.9% on this year.

The 2026 defence budget, however, includes NT$135.9 billion in spending on the Coast Guard Administration and military retirement benefits, which were not included last year.