TAIPEI, Taiwan — With tensions escalating across the Taiwan Strait, Taiwanese President William Lai Ching-te announced on March 20, 2025, that Taiwan's defense budget will exceed 3% of its gross domestic product as part of a comprehensive military overhaul in response to an increasing threat from China.
Lai assured both U.S. and domestic audiences during his speech to the American Chamber of Commerce that his administration is committed to reforming national defense. "I am determined to ensure that our defense budget exceeds 3% of the GDP. At the same time, we will continue to reform national defense," he stated, amid rising concerns that Taiwan's military capabilities were insufficient.
Currently, Taiwan allocates about 2.45% of its GDP to defense spending. However, calls for even more substantial investment have emerged, most notably from U.S. President Donald Trump, who has demanded that Taiwan ramp up its military budget to as high as 10%. Lai's promise of a budget increase comes in the wake of rising military activity from Beijing, which considers Taiwan a breakaway province and has vocally threatened to assert control over the island.
As part of these preparations, the Taiwanese military recently conducted a series of drills named the "Immediate Combat Response," which began on March 17, 2025, and run through March 21. On March 21, army engineering troops mobilized in Taichung and Kaohsiung to practice constructing defensive structures that would impede potential enemy advances.
The drills included deploying anti-tank hedgehogs, concertina wire, booby traps, and breakwater concrete blocks along strategic points, all aimed at absorbing and slowing enemy movements should a conflict arise. Defense Minister Wellington Koo highlighted these efforts, remarking, "The Han Kuang exercise has always been designed to simulate scenarios that could occur within the next one to two years." This annual exercise, planned for July 9-18, 2025, is seen as a pivotal moment for Taiwan as it specifically focuses on simulations based on a potential Chinese invasion set for 2027.
In a defense briefing held on March 18, U.S. Strategic Command Commander Anthony J. Cotton warned of significant threats posed by the Chinese People's Liberation Army (PLA), asserting that the PLA could successfully invade Taiwan by 2027. As such, Lai emphasized the importance of international collaboration, stating, "Taiwan plans to advance our cooperation with the U.S. and other democracies in upholding regional stability and prosperity," highlighting efforts to strengthen ties with allies amid the uncertain geopolitical landscape.
This year’s Han Kuang Exercise will involve joint operations among Taiwan's Army, Navy, Air Force, and Marine Corps, featuring live-fire drills, amphibious landings, and simulated missile strikes. The drills, an important benchmark in military readiness, focus on responding to aggression and managing potential real-time threats arising from China’s increasingly assertive military posture.
As part of this comprehensive strategy, Taiwan’s Ministry of National Defense proposed doubling the duration of military exercises from five to ten days, while also increasing the involvement of reserve brigades. This adjustment aims to enhance overall readiness and ensure that the military can counter increased threats from the mainland.
In addition to defense spending and military adjustments, Taiwan is also mindful of the broader regional implications that China’s expansion poses to neighboring democracies. Recent military exercises conducted by China around Taiwan have alarmed regional partners, such as Australia and New Zealand, who expressed concerns regarding insufficient advance warning before China’s naval drills, which forced nearby flights to alter routes unexpectedly.
On March 19, 2025, Defense Minister Wellington Koo underscored the necessity for enhanced surveillance of PLA activities. This strategy aims to quickly identify any abrupt changes in PLA operations, enhancing Taiwan’s capability to respond preemptively to any deviations from routine drills to actual combat scenarios, ensuring its strategic readiness remains uncompromised.
The current geopolitical landscape distinctly illustrates Taiwan's urgency in fortifying its defenses. Lai’s administration faces pressure not just from Beijing but also internally, as citizens and critics alike weigh concerns about military readiness. This renewed focus on increasing defense spending is pivotal in alleviating fears and demonstrating Taiwan's resolve to maintain its sovereignty.
Ultimately, Taiwan's commitment to enhancing its military capabilities and defense budget reflects a broader strategy of asserting its independence while preparing for an uncertain future. The increased focus on military readiness signifies not just a challenge to China’s ambitions but also a reaffirmation of Taiwan's place within the international community amid mounting tensions.
