Rank #22 · Asia-Pacific
Taiwan spent $18.2B on defense in 2025, a 14% real-terms jump and the largest annual increase since at least 1988 according to SIPRI. The FY2026 regular Ministry of National Defense budget reaches a record NT$949.5B, and a separate special budget proposed by President Lai Ching-te targets asymmetric capabilities to deter a potential PLA invasion.
Taipei's FY2026 regular MND budget hits a record NT$949.5B (~US$30B), about 2.4% of GDP; including coast guard and veterans' affairs the broader defense topline exceeds 3% of GDP. Separately, President Lai Ching-te submitted a NT$1.25T (~US$40B) "Strengthening Defense Resilience and Asymmetric Combat Capacity" special budget in late 2025, though the KMT-controlled legislature has capped the version under consideration at NT$780B. Procurement priorities include HIMARS, Harpoon coastal-defense missiles, Stinger MANPADS, drones, sea mines, and indigenous Hsiung Feng cruise missiles. Personnel costs absorb roughly 45% of the regular budget.
Active strength is approximately 169,000 across Army, Navy, Air Force and Marine Corps, with conscription extended in 2024 from 4 months back to 1 year. The reserve pool exceeds 1.65M. The Air Force flies 139 F-16A/B aircraft now being upgraded to F-16V Block 70 standard, with 66 new-build F-16Vs delivering through 2026. The Army is fielding 108 M1A2T Abrams tanks (deliveries through 2027) and HIMARS launchers. The Navy operates 4 Kidd-class destroyers and a growing fleet of indigenous Tuo Chiang-class corvettes. Posture is increasingly asymmetric: distributed lethality, mobile coastal-defense missiles, and sea-mining over expensive blue-water platforms.
Taiwan's defense industry is anchored by NCSIST (missiles, radars, UAVs), AIDC (aircraft, including the indigenous Brave Eagle trainer), and CSBC (submarines, surface combatants). The first indigenous defense submarine, Hai Kun (Narwhal), launched in 2023 and is undergoing sea trials with a fleet of 8 planned. Despite this, Taiwan remains heavily dependent on US arms sales — over $26B in pending Foreign Military Sales as of early 2026, with delivery backlogs on Stingers, Harpoons, and HIMARS munitions cited by US officials. Taiwan's semiconductor industry (TSMC) is itself a strategic asset frequently invoked in deterrence calculus.
Taiwan faces sustained Chinese coercion: PLA aircraft incursions into Taiwan's ADIZ averaged over 10 per day in 2025, with periodic large-scale Joint Sword exercises encircling the island. The PLA Navy maintains near-continuous presence in the Taiwan Strait and around outlying islands. Gray-zone activity — undersea cable cuts, coast guard intrusions near Kinmen, cyber operations — has intensified. The US maintains strategic ambiguity but increased arms-sale tempo and the Pacific Deterrence Initiative underscore commitment. A potential 2027 People's Liberation Army readiness milestone, repeatedly cited by US INDOPACOM commanders, drives Taipei's budget acceleration.
On April 27, 2026 SIPRI confirmed Taiwan's 2025 spending at $18.2B, +14% real. In November 2025 President Lai unveiled a NT$1.25T special defense budget; in early 2026 the legislature passed a reduced NT$780B version with abstentions concentrated in the opposition. April 2026 Taipei Times reporting cited US officials warning that defense-budget cuts risked being read as a "concession to China" ahead of the Trump-Xi meeting. The first F-16V Block 70 squadron reached IOC in late 2025; HIMARS deliveries continue. The Hai Kun submarine completed harbor acceptance trials in early 2026.
Taiwan's FY2026 regular Ministry of National Defense budget is a record NT$949.5B (~US$30B). A separate special defense budget of NT$780B (US$24.8B), passed in reduced form in early 2026, funds asymmetric capabilities. Combined defense-related outlays exceed 3% of GDP for the first time.
Approximately 2.1% of GDP in 2025 by the SIPRI methodology, or above 3% if coast guard, veterans, and special-budget items are included. Taiwan has committed to raising the topline toward 3% of GDP under President Lai's plan.
Taiwan's "Overall Defense Concept," refined under successive ministers, emphasizes large numbers of small, mobile, hard-to-target systems — coastal-defense missiles, sea mines, drones, MANPADS, HIMARS — to attrit a PLA invasion fleet rather than match Chinese platforms. The 2025 special budget is structured around this pivot.
No formal mutual-defense treaty since 1979. The Taiwan Relations Act obligates the US to provide arms of a defensive character; intervention in a conflict remains a policy of strategic ambiguity, though Presidents Biden and Trump have made statements supportive of US involvement.