Taiwan’s $40B Defence Plan in Jeopardy as Political Deadlock Deepens

Taiwan’s Legislative Yuan is seen under heavy military presence as fighter jets and missile defence systems operate amid political deadlock and growing China tensions.

By Defence Worlds Desk

Taipei, Feb. 6, 2026 — A sweeping US $40 billion defence budget proposal aimed at bolstering Taiwan’s military capabilities now hangs in the balance following weeks of intense political gridlock in the island’s legislature. What was once positioned as a historic investment in national defence has become ensnared in partisan disputes, raising concerns about Taiwan’s readiness to counter mounting threats from neighbouring China.

Taiwan’s government, led by President Lai Ching-te and his Democratic Progressive Party (DPP), introduced the supplemental defence plan in late 2025. The package was designed as a multi-year commitment, allocating funds over eight years to expand air defence, purchase advanced weapons from the United States, and develop asymmetric warfare capabilities tailored to counter potential aggression across the Taiwan Strait.

However, the proposal has been repeatedly blocked in the Legislative Yuan, where opposition parties — chiefly the Kuomintang (KMT) and the Taiwan People’s Party (TPP) — now hold a majority. Lawmakers have refused to bring the budget up for discussion without significant government concessions, stymying progress and fuelling debate about the island’s defence priorities.

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Political Standoff and Budget Blockade

The defence plan has been blocked more than ten times since it was first introduced in early December 2025, reflecting deep divisions between the DPP and opposition factions. Taiwan’s parliament operates under a system that gives the majority party substantial control over the legislative agenda, meaning the opposition can effectively stall proposals by declining to schedule them for review.

Instead of debating the government’s full $40 billion plan, the legislature has forwarded an alternative defence budget put forth by the TPP, one that significantly reduces the scale of defence spending. This version — roughly $12.6 billion — allocates funds for select weapons systems such as HIMARS multiple rocket launchers and precision munitions but excludes crucial components of the original plan like a comprehensive T-Dome multi-layered air defence system and mass procurement of locally produced drones.

Opposition lawmakers have stated that their aim is to exercise fiscal oversight and ensure detailed justification for large defence expenditures, citing concerns over transparency and cost efficiency. But critics argue that these objections mask deeper political motivations, including opposition to President Lai’s broader strategic agenda and differing views on cross-strait relations.

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Strategic Implications for Taiwan’s Defence

The impasse comes at a time of heightened regional tension. China, which considers Taiwan a breakaway province, has significantly ramped up military activity near the island, conducting near-daily flights by warplanes and regular naval patrols designed to signal pressure and territorial claims. Chinese military officials have also reiterated their stance that unification — by force if necessary — remains an option.

For Taipei, the proposed defence funds are not simply an exercise in budgetary ambition; they are integral to a strategy of deterrence. The supplementary budget was meant to enhance asymmetric warfare capabilities — systems that could impose high costs on potential aggression while compensating for Taiwan’s conventional force disadvantages relative to China. Technologies like long-range precision strike systems, advanced counter-drone networks, and layered air defence installations played central roles.

With the legislature potentially approving only a fraction of the original budget, defence officials and strategic analysts warn that gaps in capabilities could emerge. A reduced defence plan might limit Taiwan’s capacity to field new deterrent systems or to sustain joint combat readiness at the scale envisioned by military planners.

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Domestic Politics and Public Opinion

The political divide over defence spending cuts across party lines and public sentiment. Recent polls suggest that a majority of Taiwanese citizens do not support the legislature’s repeated refusal to consider the government’s defence budget. Many respondents cited concern over China’s military posture and frustration with the legislative impasse that has prevented substantive debate.

Meanwhile, opposition parties maintain that their approach ensures responsible governance and accountability over large-scale expenditures. The KMT, which historically favours closer economicties with Beijing, has been pushing for greater scrutiny of defence plans before allocating significant public funds. The TPP shares similar concerns, emphasising fiscal discipline and legislative oversight.

Despite these assertions, critics argue that political motivations may be delaying critical decisions at a dangerous moment for regional security. Several U.S. lawmakers and strategic allies have publicly urged Taiwan’s legislature to approve robust defence spending, warning that prolonged delays could send unintended signals about Taipei’s resolve and weaken deterrence.

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International Response and U.S. Pressure

Washington has been a consistent backer of Taiwan’s defence efforts, providing arms sales and diplomatic support despite the lack of formal diplomatic relations. U.S. officials have expressed concern that the legislative deadlock could slow essential weapons deliveries and weaken Taiwan’s ability to respond to potential threats.

Prominent figures in the U.S. Congress, including members of the Senate Armed Services Committee, have publicly criticised the opposition’s actions, framing them as undermining Taiwan’s security at a critical juncture. Some have linked the budget standoff to broader strategic competition between the U.S. and China in the Indo-Pacificregion.

Political advocacy groups and think tanks focused on defence strategy also warn that reduced spending could impair coordinated defence planning with regional partners, potentially complicating efforts to integrate Taiwan’s defence systems with those of its allies.

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What’s Next: Budget Prospects and Security Policy

With the Taiwanese legislature set to reconvene in the coming weeks, all eyes are on whether a compromise can be reached that balances fiscal oversight with strategic necessity. President Lai and his government continue to push for the full $40 billion budget to advance national defence priorities, while opposition parties have not shown signs of yielding ground significantly.

Security analysts suggest that without a resolution, Taiwan could face a period of protracted legislative stasis, with defence planning and military procurement delayed as a result. Such an outcome, they say, may embolden competitors and complicate Taiwan’s broader efforts to strengthen deterrence and reassure both domestic and international stakeholders of its commitment to self-defence.

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Conclusion

Taiwan’s political deadlock over its $40 billion defence plan reveals deep fissures within the island’s political system at a time of growing regional risk. As opposition lawmakers continue to challenge the government’s strategic vision, questions remain about the long-term implications for Taiwan’s defence capabilities and its role in the wider Indo-Pacific security landscape.

For Taipei, navigating this legislative impasse will be crucial not only for military readiness but also to maintain confidence among allies and deter potential aggression. Whether this moment becomes a turning point in Taiwan’s defence policy or an enduring paralysis remains to be seen.

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Keywords: Taiwan defence budget, $40 billion defence plan, political deadlock Taiwan, China military threat, Legislative Yuan blockade, asymmetric warfare, T-Dome air defence, U.S.–Taiwan defence cooperation, Taipei security policy, Indo-Pacific geopolitics.

 

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