Despite the threat from China and pressure from Trump, Taiwan slashes its defense budget

Taiwan President Lai Ching-te during a visit to a military base in the Taitung region of Taiwan on January 21, 2025. CHIANGYING-YING/AP

It’s difficult to choose a more unwelcome moment, but domestic politics has its own rationality which sometimes ignores the international context. Despite China threatening invasion and a new American president demanding the island pay more for its security, Taiwan has slashed its defense budget.

Tuesday January 21, a few hours after Donald Trump took office in Washington, the Taiwanese Parliament, dominated by a coalition of two parties opposed to the president, Lai Ching-te, froze the financing of significant sections of its army modernization program.

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The general state budget adopted by the Taiwanese Parliament on Tuesday was reduced by 6.6% compared to the executive’s proposal, or by more than 6 billion euros, a record. The government has warned that this percentage does not fully reflect the real impact, because most of the budget is made up of fixed expenses – notably civil servants’ salaries – which are not affected by the cuts. On Tuesday, President Lai estimated that 35% of the government’s planned new investments had been cut from the budget.

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