Photo: by Grzegorz Zembrzucki
What is happening?
The debate with Taiwan over a proposed special defense budget is increasingly exposing cleavages within the Kuomintang (KMT), the main opposition party. President William Lai’s (賴清德) Democratic Progressive Party (DPP) administration is seeking an eight-year NT$1.25 trillion package to strengthen Taiwan’s defense resilience, including the planned T-Dome air defense system, AI-enabled response capabilities, U.S. weapons procurement, drones, and domestic defense production. Lai has framed the package as a way to “maintain peace through strength” and upgrade Taiwan’s defense industries.
The KMT, however, has not converged on a single position. Under chairwoman Cheng Li-wun (鄭麗文), party leadership has backed a lower “NT$380 billion plus N” formula, with “N” referring to future funding after Taiwan receives U.S. letters of offer and acceptance. Yet several KMT figures have floated or supported an NT$800 billion alternative, including legislator Hsu Chiao-hsin (徐巧芯) and, reportedly, Legislative Speaker Han Kuo-yu (韓國瑜). A KMT caucus meeting failed to reach consensus, turning what began as a government-opposition dispute into a visible intra-party conflict.
What is the broader picture?
The budget dispute reveals a deeper strategic dilemma for the KMT. On paper, the party is not opposing defense spending outright. Its official argument is that the DPP government should not receive a blank check and that funds should be tied to confirmed U.S. procurement commitments. This gives the KMT a fiscally conservative position: pro-defense but opposed to what it describes as insufficiently accountable spending.
Politically, however, this line has become difficult to sustain. U.S. pressure has sharpened the stakes. Raymond Greene, Director of the American Institute in Taiwan (Washington’s de facto embassy), urged Taiwan’s legislature to pass a “comprehensive” budget package, warning that integrated air and missile defense systems, drones, and other key capabilities are in high global demand. In practical terms, delay could hold up Taiwan’s place in the U.S. defense production queue.
This has relegated KMT legislators to an awkward position. A visibly lower budget ceiling may help the party attack the DPP on fiscal grounds, but it also exposes the KMT to accusations that it is weakening Taiwan’s deterrence. This is especially sensitive for legislators with local electoral ambitions, who may not want to be seen as soft on defense amid intensifying Chinese military pressure.
The clearest sign of internal strain came when KMT deputy chair Chi Lin-lien (季麟連), a retired general, reportedly suggested that Han Kuo-yu (韓國瑜) should be expelled from the party if he supported the higher budget figure. KMT Chair Cheng sought to contain the fallout, saying the matter should be left for Chi and Han to resolve personally and asking rhetorically whether Han was really so “fragile” that one sentence would hurt him. This response did not end the controversy, with Jaw Shaw-kong (趙少康), the KMT’s 2024 vice-presidential candidate, criticizing the party center for censuring him after he queried the party’s lack of unity on the budget. This, Jaw noted, came after the failure to discipline Chi for attacking Han.
The dispute has therefore become about more than numbers. It is also concerns the issue of who speaks for the KMT on national security: party headquarters, the legislative caucus, Han as legislative speaker, military-linked party elders, or influential figures such as Jaw. Pro-KMT commentary has warned that the party risks deepening public mistrust of its defense policy if it appears trapped between anti-DPP reflexes, suspicion of U.S. pressure, and internal factional combat.
Why is it important?
Taiwan’s defense budget debate is now a test of political credibility as much as military planning. For the Lai administration, the NT$1.25 trillion package is meant to demonstrate resolve, accelerate asymmetric and air defense capabilities, and signal seriousness to Washington. For the KMT, the challenge is more complicated: It must show fiscal oversight without appearing indifferent to the military threat from China or dismissive of U.S. concerns.
The episode also shows that Taiwan’s defense policy cannot be reduced to a simple pro-defense-versus-anti-defense divide. The KMT’s internal debate reflects tensions between party discipline and legislative autonomy, ideological positioning and electoral pragmatism, skepticism toward the DPP, and the need to maintain a workable relationship with Washington.
For European observers, the lesson is broader. Taiwan’s deterrence depends not only on its weapons systems but also on whether democratic institutions can produce stable, credible, and timely decisions under pressure. The current budget standoff suggests that Taiwan’s greatest vulnerability may not be a lack of strategic awareness, but the difficulty of converting broad consensus on security into a politically sustainable defense policy.