Taiwan Looks To Lock In New Arms Deal With America Amid Defense Spending Debate

For both Taipei and Washington, spring is the season for defense budgets.

On April 22, the Taiwanese Ministry of Defense announced that it had signed six arms deals with the United States totaling more than $6.6 billion. The agreements had been signed earlier in the month but were only released publicly following the Ministry’s announcement of the unclassified portions of its special budget request on April 21.

The deals, which were signed amid ongoing legislative negotiations over military spending, signal Taipei’s growing defense commitments during a period of rising regional tensions.

New Deals May Unlock Stalled Defense Budget

The Taiwanese Ministry of Defense signed six letters of offer and acceptance (LOAs) for a range of U.S.-produced weapons systems. LOAs are a legal instrument used by Washington to transfer itemized defense articles, defense services, and design and construction services to foreign partners. These agreements would allow Taiwan to purchase High Mobility Artillery Rocket Systems, M109A7 Paladin self-propelled howitzers, and a range of army and navy missiles, along with providing for the joint production of large-caliber ammunition. A related agreement released the same day would allow the United States to offer technical assistance to the Taiwanese military in establishing an integrated air defense network, fulfilling Taipei’s effort to develop a “Taiwan Shield” partially modeled on Israel’s air defense system.

The agreements may also spur the passage of a government-proposed special defense budget through Taiwan’s legislature, which has been stalled due to internal debates over spending priorities. While the LOAs represent a small portion of the $38.8 billion budget proposal, the deals will likely place pressure on lawmakers to approve the entire funding request to finance any additional packages later in the year.

Taiwan May Benefit From Projected Surge in U.S. Defense Spending

The agreements also place Taiwan in a strong position to eventually benefit from a potential surge in U.S. defense production resulting from the Trump administration’s request to Congress for $1.5 trillion in defense spending for the coming fiscal year. Despite investing significantly in its own defense sector, including increased purchases of indigenously produced air defense systems and building out its domestic drone supply chain, Taipei’s procurement strategy remains heavily integrated into the U.S. defense industrial base. This connection ensures that delays in U.S. production have an outsized effect on Taiwan’s spending and procurement timelines — the island is still waiting to receive full delivery of F-16 Block 70/72s and has struggled to source components for previously-acquired systems such as Abrams tanks.

However, the administration’s proposed defense budget may benefit Taipei’s efforts to strengthen its military by accelerating delivery timelines. With over half of the Pentagon’s proposed spending slated to fund procurement of munitions and other platforms, U.S. manufacturers can more adequately scale production in advance of expected demand, easing long-standing supply constraints.

Washington and Taipei Should Cooperate on Scaling Defense Production

The signed agreements should provide a foundation for cross-party agreement within the Legislative Yuan, Taiwan’s legislature, on the proposed defense budget supplement by ensuring that Taipei’s expenditures can match the growth pace of its order books. The agreements should also bolster greater spending on defense-related procurement, such as expanding energy stowage and capabilities to secure maritime corridors.

Moreover, Congress, the Department of Defense, and the State Department should encourage Taiwanese firms to partner with U.S. manufacturers to accelerate joint production, particularly of drones and other unmanned systems necessary to confront Chinese coercion.  

Jack Burnham is a senior research analyst in the China Program at the Foundation for Defense of Democracies (FDD). For more analysis from Jack and FDD, please subscribe HERE. Follow FDD on X @FDD. Follow Jack on X @JackBurnham802. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.