Lai pledges to raise Taiwan's defense spending to over 3% of GDP

Taipei, Feb. 14 (CNA) President Lai Ching-te (賴清德) said Friday that his government would aim to increase defense spending to 3 percent of Taiwan's gross domestic product (GDP) this year, hours after U.S. President Donald Trump again threatened tariffs on Taiwanese semiconductors.

At a news conference in Taipei following his first high-level national security meeting of the year, Lai said the government would propose a special budget plan this year to increase the country's defense spending to over 3 percent of GDP.

"Taiwan must firmly safeguard its national sovereignty, strengthen its resolve for self-defense and bolster defense capabilities," Lai said.

The president also vowed to double down efforts on defense reforms and enhance civil protections in the face of growing threats from authoritarian regimes.

Lai's plans to increase defense spending -- which, if successful, would likely see Taipei purchasing more defense articles from Washington -- reflected Taipei's broader efforts to reduce the trade deficit with the United States.

According to Lai, the U.S. has approved US$26.26 billion worth of arms sales to Taiwan over the past eight years, with US$18.76 billion taking place during Trump's first term from 2017 to 2021.

Lai added that Taiwan would accelerate efforts to strengthen its national defense capabilities, building on years of close collaboration between Taipei and Washington.

His remarks came just hours after Trump, speaking with reporters in Washington after signing a presidential memorandum paving the way for tariffs on foreign chip exports, reiterated his accusation that Taiwan "took our [the U.S.'] chip business away."

Trump argued that the pledged economic sanctions, which could take effect as early as April, would ensure "fair" and "reciprocal" trade while reducing the U.S. trade deficit in its dealings with other countries over the years.

Taiwan has been in the top 10 list of countries with which the U.S. has a trade deficit.

The plans to increase defense spending followed Trump's comments during his presidential campaign trail that Taiwan should increase its defense budgets significantly and even pay the U.S. for protection against China.

Over the past eight years under former President Tsai Ing-wen (蔡英文), Taiwan's defense budgets were increased incrementally from NT$365.8 billion (US$11.16 billion) in 2016 to NT$606.8 billion in 2024.

Nevertheless, they still fell short of the 3 percent of GDP pledged by Tsai of the Democratic Progressive Party (DPP), of which Lai is currently the chair.

However, it remains to be seen whether the government's pledged defense hike, which will require legislative approval, will materialize.

For the fiscal year 2025, the Cabinet had previously earmarked NT$647 billion for national defense, accounting for 2.45 percent of Taiwan's GDP.

But NT$8.4 billion of that NT$647 billion has been cut by the opposition-led Legislature, with another NT$89.9 billion frozen, according to Directorate-General of Budget, Accounting and Statistics (DGBAS) estimates.

As of press time, the Legislature has yet to finalize the 2025 central government budget plan it passed on Jan. 21 after adopting numerous budget cuts and freezes.