TAIPEI, Taiwan — Taiwan's President Lai Ching-te has spent his first year in office warning that time is running out to prepare for a possible conflict with China. In the past two months alone, he has proposed a sweeping special defense budget and backed a landmark $11 billion U.S. weapons purchase meant to strengthen the island's deterrence.
But his commitments are colliding with Taiwan's domestic political reality.
The opposition parties that control the legislature have repeatedly voted to block Lai's proposed special defense budget. The plan would direct roughly $40 billion toward new missile defenses, long-range precision weapons and unmanned systems over the coming eight years.
The standoff has turned into one of the most consequential political fights of Lai's presidency, with implications not only for Taiwan's security, but also for its standing with the Trump administration, which is pushing Taipei to spend a much greater share of its GDP on defense.
The American Institute in Taiwan, the de facto U.S. embassy, says it supports the special budget. "What Taiwan's service members need now are the tools to accomplish their mission," the institute's director, Raymond Greene, said in a speech Thursday. "That is why President Lai Ching-te's commitment to increasing Taiwan's defense spending to 5% of GDP by 2030, including through the 1.25 trillion [new Taiwan dollar] special budget, is so critical." Last year, Taiwan's government budgeted just under 2.4% of GDP on defense.
Since Dec. 2, the two opposition parties in control of the legislature — which favor closer ties with China — have blocked the bill at least eight times so far.
President Lai was asking the people of Taiwan "for a blanket authorization without any knowledge of the situation," Fu Kun-chi, caucus leader of the largest opposition party, the Kuomintang (KMT), said as his party blocked the bill for the first time in December. The caucus also passed a motion saying Lai must explain to lawmakers in person exactly how the money would be spent.
The opposition's resistance has turned the special defense budget into a political flashpoint, alongside a broader fight over the government's general budget. The KMT has also launched impeachment proceedings against Lai, a move that is widely seen as unlikely to succeed but underscores how strained relations have become between the executive branch and the opposition-controlled legislature.
For Lai, the moment carries an uncomfortable resonance with history.
More than two decades ago, Taiwan faced a similar impasse. In the early 2000s, then-President Chen Shui-bian sought to push through a landmark U.S. arms purchase proposed by the Bush administration while the KMT controlled the legislature. The opposition blocked and delayed the plan for years, and the Bush administration later delayed the process as well amid shifting U.S. priorities, eventually scaling the deal down dramatically.
At the time, Lai Ching-te was serving as his party's caucus whip, tasked with navigating the legislative battle. Analysts say the experience looms large in his memory today.
"The situation is actually worse this time," said Kitsch Liao, associate director of the Global China Hub at the Atlantic Council, a nonpartisan research organization in Washington, D.C. Back then, he says, Taiwan and China's militaries were more evenly matched, and the U.S. wasn't pressuring Taiwan on defense spending as much.
Although he thinks many of the priorities in the special defense budget are necessary, Liao shares the opposition's concerns about transparency. But these issues aren't new — he says the current fight reflects long-standing obscurities in Taiwan's defense procurement process that are only exacerbated by the bill's large price tag.
Based on the details the government has provided so far, "they're asking the legislature to write a blank check," Liao said. "If this budget doesn't pass, it sends a very dangerous message to security partners like the U.S. But passing it is a poison pill as well."
In December, the Trump administration notified Congress of an $11 billion arms package for Taiwan, one of the largest in years. Congress always approves Taiwan arms sales, and the U.S. is obligated by law to provide Taiwan with arms to defend itself. But according to Taiwan's Defense Ministry, Taiwan itself still needs to appropriate the funding for many of the spending items using Lai's proposed special budget. Analysts worry delays or cuts in Taipei could fuel doubts in Washington about Taiwan's resolve to defend itself.
"President Trump has put considerably more pressure on Taiwan to spend more to contribute to its own defense," said Drew Thompson, a senior fellow at Singapore's S. Rajaratnam School of International Studies and a former U.S. defense official. He described the arms sale as both a signal of U.S. support and an acknowledgment that Washington expects Taiwan to pay for its own security.
Still, Thompson cautioned against viewing the relationship purely through budget concerns. "The credibility of Taipei is not measured in Washington solely by defense spending as a percentage of GDP," he said. The U.S. and Taiwan also recently concluded a trade agreement that lowered tariffs on Taiwanese goods in exchange for more Taiwanese investments in U.S. semiconductor manufacturing.
Inside Taiwan, politics are increasingly volatile
The co-founder of the think tank US Taiwan Watch, Yang Kuang-shun, says he's keeping a close eye on the third party that holds the balance of power in the legislature, the opposition Taiwan People's Party. Its leader, Huang Kuo-chang, recently traveled to the United States before announcing that his party would propose changes to the special defense budget.
The longer Taipei delays, however, "the more likely Beijing is to misjudge Taiwan's political resolve," said Chen Kuan-ting, a legislator from Lai's Democratic Progressive Party. "Deterrence depends on readiness."
As the battle over defense spending played out in the legislature, Taiwan's National Security Bureau noted in December that 2025 saw a record 3,570 Chinese military aircraft incursions into Taiwan's surrounding airspace.
Beijing staged some of the largest-scale military exercises in the past few years around Taiwan in December as a direct response to the recent U.S. arms sale.
Peiyi Yu contributed to this report from Taipei.
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