Taiwan looks to democratic partners over China as Lai sets out for trade cooperation

Taiwan set out its plans to expand cooperation with the United States on artificial intelligence and critical minerals on Tuesday, as President Lai Ching-te said the island should deepen links with democratic partners rather than turn towards China for economic engagement.

Senior Taiwanese and US officials met last week at a high-level forum launched during the first Trump administration, discussing joint work on artificial intelligence, technology, and drones. The US Department of State described Taiwan as a “vital partner”.

The two sides signed statements on economic security cooperation and the Pax Silica Declaration, a US-led initiative aimed at strengthening AI and semiconductor supply chains at a time of sharp strategic competition with China, which claims Taiwan as its territory.

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Lai says Taiwan must stand with democratic partners

Speaking at a news conference on the US–Taiwan Economic Prosperity Partnership Dialogue, Lai praised the outcome of the talks.

“Taiwan is on the right economic path and is striding confidently onto the world stage. Taiwan has both the capability and the confidence to work with its democratic partners to lead the next generation of prosperity,” he said.

His remarks came as Hsiao Hsu-tsen, deputy chairman of the opposition Kuomintang, visited Beijing for a think-tank exchange with the Chinese Communist Party on issues including AI and tourism.

Lai said the opposition “had their own positions”, pointing to differences in Taiwan’s economic pace under the previous Kuomintang government, which signed a major trade deal with China, compared with what he said was faster growth since the Democratic Progressive Party took office in 2016.

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“Do we want to continue collaborating with the US, Japan, Europe and other allied nations, or again lock ourselves into China?” he added.

Opposition engages Beijing while calling for cross-strait cooperation

At the Beijing forum, Hsiao said “peaceful development” served both sides’ interests, according to a readout of his comments.

“We should cooperate across the Taiwan Strait to earn money from the world, rather than oppose each other across the strait and let foreign countries reap the benefits, exploiting Taiwan and hollowing it out,” he said.

China refuses to engage with Lai, calling him a “separatist”. Lai reiterated to reporters that he remained open to dialogue with Beijing on the basis of parity and equality.

US senator raises concerns over blocked defence budget

Taiwan’s opposition has also blocked Lai’s forty-billion-dollar special defence budget, instead putting forward its own proposal to fund only specific US arms rather than the full package sought by the government.

On Monday, Roger Wicker, chair of the Armed Services Committee and a strong supporter of Taiwan in the US Congress, wrote on X that he was “disappointed” to see the opposition slash the defence budget.

“The original proposal funded urgently needed weapons systems. Taiwan’s parliament should reconsider – especially with rising Chinese threats,” he said. Wicker met Lai in Taipei last August.

In response, the Kuomintang said it had always supported defence spending and regretted that Wicker’s remarks were “made without sufficient information”.

The party questioned whether the US Congress would approve “a blank-cheque budget for eight years with no specifics”, repeating criticism that it could not approve spending without more detail.