Taiwan’s Special Defense Budget Bill Passes with Drastic Cuts

(Matthew Fulco – The Jamestown Foundation) A $25 billion special defense budget passed Taiwan’s legislature, ensuring funds for U.S. arms purchases but cutting most funding for domestic defense programs, including drones, presented in the government’s original $40 billion proposal. The cuts were instigated by Kuomintang (KMT) chairwoman Cheng Li-wun and represent a political victory for her faction of the main opposition party, which supports lower defense spending and friendlier ties between Taiwan and the People’s Republic of China (PRC). Taiwan’s nascent drone sector is set to be heavily impacted, with the government no longer able to place large orders. Firms will have difficulty justifying investment in specialized semiconductors for drones and other research and development overheads due to a lack of clear demand. U.S. officials have voiced concern ahead of a June visit by Cheng Li-wun that the budget undermines Taiwan’s defense capabilities. Taiwanese voters could also turn against the KMT, as a majority support strengthening national defense. – Taiwan’s Special Defense Budget Bill Passes with Drastic Cuts – Jamestown