Taiwan’s Lai plans $40 bn defence upgrade to tackle Chinese threat — he hits political hurdle

Taiwan’s plans to significantly ramp up military spending have run aground, not because of a lack of urgency from the government, but due to a deepening political standoff at home. President Lai Ching-te’s proposal comes at a sensitive moment, as US President Donald Trump presses allies to take on a larger share of their own defence, especially Taiwan, which faces growing pressure from China.

At the heart of the impasse is Lai’s ambitious plan to spend $40 billion over eight years on military equipment, much of it sourced from the US. Opposition lawmakers, who control Taiwan’s legislature, have blocked the proposal unless the president agrees to political concessions.

A domestic fight with global consequences

The deadlock goes beyond routine partisan rivalry.

It raises uncomfortable questions about whether Taiwan can strengthen its defences fast enough while remaining a reliable partner to Washington. Lai has pledged to push military and security spending above three percent of Taiwan’s economy this year, a move clearly aimed at reassuring the island’s most important security backer.

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Instead, the plan has become tangled in budget disputes and legal battles between the ruling Democratic Progressive Party (DPP) and opposition parties. Both sides accuse the other of breaking the law.

Tensions escalated when Lai’s premier refused to approve legislation passed by the opposition that would redirect tax revenue from the central government to local administrations. Opposition lawmakers called the move unconstitutional, labelled Lai a dictator, and even initiated impeachment proceedings.

“We have never experienced such a massive crisis of constitutional rule of law as we have right now,” said Weng Hsiao-ling of the Nationalist Party, as quoted by the New York Times (NYT). “Executive power is not operating according to the law,” he added.

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Accusations and distrust deepen divides

The DPP, meanwhile, says the opposition is deliberately paralysing the government and undermining Taiwan’s security. Party lawmakers accuse some opposition figures of echoing Beijing’s preferences and blocking defense spending at a dangerous moment. Frustration has grown after the opposition twice rejected Lai’s nominees to Taiwan’s constitutional court.

“They changed the rules, and the referee is gone,” said Su Chiao-hui of the DPP, as per NYT.

The dispute reflects a broader split in Taiwan over how closely to align with Washington versus pursuing warmer ties with Beijing. While Lai’s party insists Taiwan is its own country and needs stronger defenses and deeper US ties, the Nationalist Party favors engagement with China and questions whether Lai’s strategy risks escalation.

Pressure from Washington—and room for compromise

Opposition lawmakers have stalled not only the military spending plan but also the annual budget, demanding that Lai first face questioning in the legislature. They have also cited delays in US arms deliveries.

“We’ve paid up, but the weapons are nowhere to be seen,” said Nationalist leader Fu Kun-chi, according to NYT “We support national defense, but don’t support being fleeced in arms purchases.”

Despite the stalemate, compromise remains possible. The government has begun offering private briefings and limited disclosures to lawmakers, while the US representative in Taipei has urged cooperation and backed Lai’s proposals.