ANALYSIS/Lai's investment, budget plan good move amid Trump's tariff push: Scholars

Washington, Feb. 14 (CNA) President Lai Ching-te's (賴清德) plan to further encourage Taiwan's businesses to invest in the United States and increase the country's defense budget is a good move after U.S. President Donald Trump outlined his plan to impose tariffs on foreign countries, scholars told CNA.

After Trump announced plans to impose reciprocal tariffs on exports from countries that he said have unfair trade policies toward the U.S. on Thursday (Washington time), Lai held a national security meeting hours later and laid out a plan to expand Taiwanese investment in the U.S. and increase defense spending to 3 percent of Taiwan's gross domestic product (GDP) this year.

For the fiscal year 2025, the Cabinet had previously earmarked NT$647 billion (US$ 19.79 billion) for national defense, accounting for 2.45 percent of Taiwan's GDP.

"President Lai has the right idea in terms of how to manage his relationship with President Trump," said Julian Ku, a law professor at Hofstra University, in a written reply to CNA's questions.

Ku said that Trump looks for allies with two key traits -- one being the ability to manage their defense "with as little reliance on the U.S. as possible" and the other being the capacity to invest and trade with the U.S. on terms that Trump feels are "fair."

"Lai's goal should be to get Trump to think of Taiwan in a way that is similar to the way he currently thinks about Japan," Ku said, adding that Lai's proposals address both concerns that Trump is likely to raise.

Ku, however, said that Lai needs to deliver "something tangible," given his administration cannot force Taiwanese companies to invest in the U.S. and does not control the defense budget, which must be approved by Taiwan's Legislature.

"A commitment to dramatically increase Taiwan purchases of U.S. energy, including LNG [Liquefied Natural Gas], would demonstrate goodwill and get headlines," Ku said.

Such a move would be an example of tangible benefits to Trump and the U.S. that Lai "has the power to offer" and are "easy to explain and understand," Ku added.

In Japan's case, Japanese Prime Minister Shigeru Ishiba met Trump for the first time on Feb. 7 after the latter returned to the White House, showing goodwill by committing to substantial investments in the U.S. and making additional LNG purchases, which some analysts viewed as a successful diplomatic move.

Ku posted on X (formerly Twitter) the following day, recommending that Taiwan follow suit by buying "as much U.S. LNG as possible" and suggesting that it could be a way for the Taiwanese government to "remind" Trump that the island country would not be able to pay for U.S. LNG "if China blockades you [Taiwan]."

Richard Bush, a nonresident senior fellow at the American think tank Brookings Institution, described the plan announced by the Lai administration as "good-will initiatives," but noted that he was uncertain how the Trump administration would respond to them.

"More importantly, I suspect that, like the first Trump administration, this one does not have a coherent approach to Taiwan policy, at least as yet," said the former chair of the American Institute in Taiwan in a written reply to CNA.

"I personally believe that for the United States to make public complaints about the policies of a good friend like Taiwan is not necessarily conducive to effective bilateral cooperation based on shared interests," Bush added.