AIT director backs Taiwan’s plan to raise defense to 5% GDP

TAIPEI (TVBS News) — Taiwan's President Lai Ching-te (賴清德) announced Thursday (Jan. 22) that the special defense budget of NT$1.25 trillion (around US$39.6 billion) over eight years will boost the island's economic and industrial development. Speaking at the CommonWealth Economic Forum (2026 天下經濟論壇), Lai said the budget, which promotes defense industries and procures armed forces, underpins national economic security. The announcement signals Taiwan's commitment to strengthening both its military capabilities and domestic industry.

Lai underscored Taiwan's success in reducing U.S. tariffs from 32% to 15%, aligning with major competitors like Japan and South Korea, a significant trade achievement for the island. He reiterated Taiwan's unwavering commitment to defending national sovereignty amid threats from China and stressed the role of the defense industry in economic development. The tariff reduction places Taiwan on equal footing with key Asian economies in accessing the American market.

In a separate event, Raymond F. Greene, director of the American Institute in Taiwan (AIT), the highest U.S. official in Taiwan, praised Lai's commitment to increasing defense spending to 5% of GDP by 2030. Greene emphasized that such a measure is crucial for establishing conditions for dialogue free from coercion, speaking at a press conference with the Institute for National Defense and Security Research (INDSR, 國防安全研究院). The AIT director's remarks underscore U.S. support for Taiwan's defense buildup.

Greene affirmed the U.S. commitment to deterring aggression within the first island chain, a strategic line stretching from Japan through Taiwan to the Philippines. He restated the importance of Taiwan's NT$1.25 trillion (around US$39.6 billion) defense budget, noting that the U.S. will expedite the delivery of key systems and collaborate to expand Taiwan's defense industrial base. Greene reiterated U.S. support for a peaceful resolution of cross-strait differences and maintaining the status quo under the Taiwan Relations Act.

Greene remarked on the U.S.'s strategic shift under President Trump, moving away from unrestricted globalism toward proactive diplomacy and deterrence, not isolationism. He highlighted Taiwan's pivotal role in the first island chain and the necessity of deterring conflict in the Taiwan Strait for the security of the U.S., the world, and Taiwan itself. The remarks signal continued U.S. engagement in the Indo-Pacific region under the new administration. ◼ (At time of reporting, US$1 equals approximately NT$31.6)