Authors: Joe O’Connor, Shikhar Chaturvedi, Danielle Kremer & Wyeth Lindberg
This week: special budget negotiations continued, featuring statements from key stakeholders; two U.S. Senators introduced an act to expand reporting on the Taiwan Relations Act; the MND released statistics on future ammunition purchases; and the MND released seven major contract awards to American contractors; alongside weekly contracts and solicitations.
Special Budget: MND Issues Redacted Budget Proposal
Statements from stakeholders involved in or observing special budget negotiations proliferated this week, beginning with a letter from four U.S. Senators, including Senate Foreign Relations Committee Ranking Member Jeanne Shaheen, expressing to Legislative Yuan leaders the need to “approve a supplementary defense budget” that addresses ongoing U.S. sales to Taiwan, as well as “speedier domestic production.” At a military inspection in Kaohsiung on Friday, President Lai also called for passage, reiterating the need for “constant preparedness.” At a forum in Taipei on the same day, retired U.S. Navy Adm. Mark Montgomery urged the LY to pass a special budget before a Trump-Xi summit in May, warning that not doing so would weaken Taiwan’s relations with the U.S.
On Sunday, Kuomintang (KMT) media personality, Jaw Shaw-kong, stated that he would support a proposal worth NT$810 billion (US$25.64 billion), tying approximately NT$350 billion of that to existing U.S. arms sales, and holding the remaining NT$460 billion for future U.S. sales. Jaw stated that he came to this number after subtracting budget items for domestic procurement from the Lai administration’s proposal.
On Monday, the LY’s Foreign Affairs and National Defense Committee held a closed-door hearing, where Minister of National Defense Wellington Koo laid out a new, partially redacted version of the Lai administration’s NT$1.25 trillion (US$40 billion) spending proposal. In the hearing, Koo continued to play defense, responding to Jaw’s comments by urging the MND’s need to plan around operational needs.
On Tuesday, in a Senate Armed Services Committee hearing, U.S. Indo-Pacific Command commander, Admiral Samuel Paparo, stated that progress on the special budget would reflect “how committed” Taiwan is to its own defense, among other comments. A Reuters report on the hearing also revealed that KMT officials had assured Democratic aides visiting Taiwan in March that a defense proposal would eventually be passed.
U.S. Senators Introduces Act Expanding TRA Reporting
A bipartisan group of senators introduced the “Taiwan Relations Reinforcement Act” (S.4294) on April 14, which would require the Department of Defense to submit an annual report assessing the United States’ capacity to fully implement the Taiwan Relations Act (TRA). The bill mandates a detailed evaluation of U.S. ability to deter and respond to a range of Taiwan contingency scenarios, including amphibious invasion, blockade, and large-scale missile strikes, while also assessing gray zone coercion across cyber, economic, and information domains. It further requires analysis of U.S. force posture in the Indo-Pacific and the sustainability of operations in a prolonged conflict, alongside the role of allied contributions. Notably, the report must identify capability gaps, estimate future shortfalls over a ten-year horizon, and outline budgetary and force structure changes needed to meet TRA obligations. The legislation also calls for an assessment of U.S. capacity to respond to a Taiwan contingency in the context of managing other global conflicts, underscoring growing congressional concern over resource constraints and multi-theater readiness.
MND Releases Information on Future Commercial Purchases
On April 21st, Taiwan’s Ministry of National Defense announced a list of weapons systems it intends to acquire through direct commercial sales (DCS) and domestic manufacturing, many of them being unmanned systems and ammunition. The MND stated that this process would involve working with the National Chung-Shan Institute of Science and Technology (NCSIST) and the Armaments Bureau to achieve the expected results. This would all be part of the US$40 billion (NT$1.25 trillion) special budget plan the DPP and Lai administration proposed in November of 2025. Approximately a quarter of the budget proposal will go to domestic procurement and indigenous production capabilities, with the remaining 76% going to purchases of United States weapons systems.
MND Issues Seven Major Contract Awards to AIT
This past week, the Ministry of National Defense awarded 7 major contracts to the American Institute in Taiwan; one Air Force award on Tuesday and six today.
According to information published yesterday on Taiwan’s government e-procurement website, the Air Force Command awarded the American Institute in Taiwan (AIT) a NT$572.60 million (US$18.19 million) contract for “other support services,” with Liberty Times reporting a performance period of five years. On Wednesday, the Army Command awarded contracts for “Missile combat reserve replenishment,” “Long-range precision strike systems,” and “Self-propelled artillery”, for various amounts noted below. The Naval Command awarded a contract for “Anti-armor missiles.” The Armaments Bureau’s Production and Manufacturing Center awarded a contract for the “Co-production of large-caliber ammunition.” These awards come as the fate of the special budget, funding from which would likely pay for these tranches, remains undecided as Legislative Yuan leaders debate the scope of approved spending.
Weekly Awards/Solicitations
On Thursday, the Naval Command awarded RH Marine a NT$33.32 million (US$1.06 million) contract for 11 items, including oscillators. RH Marine is a Dutch company that designs and integrates advanced electrical and automation systems for both civilian and military naval vessels. The contract is to be fulfilled throughout the southern region of Taiwan.
On Friday, the Army Command awarded seven companies a NT$1.80 billion (US$57.27 million) contract for frozen meat products. The contract is to be fulfilled nationwide.
Also on Friday, the Army Logistics Command awarded a NT$339.11 million (US$10.77 million) contract to NCSIST for the outsourced maintenance of the Army’s “Phase II Mobile Digital Microwave System” for FY2026–2030. The contract is to be fulfilled in the Zhongli District of Taoyuan.
On Tuesday, the Air Force Command awarded American Institute in Taiwan a NT$572.60 million (US$18.19 million) contract for “other support services”.
Also on Tuesday, the Armaments Bureau made a repeat solicitation of bids for the purchase of engineering services for dry dock construction, as part of the Weihai project. The solicitation is valued at NT$6.10 billion (US$193.50 million).
On Wednesday, several awards were announced:
- The Army Command awarded the American Institute in Taiwan a NT$5.32 billion (US$168.98 million) contract for “Missile combat reserve replenishment”. The contract is to be fulfilled in Taichung (Houli and Daya Districts), Kaohsiung (Alian District), Pingtung (Wanluan Township) and Hualien (Hualien County).
- The Army Command awarded the American Institute in Taiwan a NT$123.50 billion (US$3.92 billion) contract for “Long-range precision strike systems”. The contract is to be fulfilled in Taoyuan (Zhongli District), Taichung (New Community), Tainan (Guanmiao District) and Kaohsiung (Qishan District).
- The Army Command awarded the American Institute in Taiwan a NT$73.89 billion (US$2.35 billion) contract for “Self-propelled artillery”. The contract is to be fulfilled in Taoyuan (Zhongli and Pingzhen Districts) and Tainan (Guanmiao District).
- The Naval Command awarded the American Institute in Taiwan a NT$5.13 billion (US$162.75 million) contract for “Anti-armor missiles”. The contract is to be fulfilled in Taoyuan’s Guishan District and Kaohsiung’s Linyuan District.
- The Armaments Bureau’s Production and Manufacturing Center awarded the American Institute in Taiwan a NT$910.45 million (US$28.91 million) contract for the “Co-production of large-caliber ammunition”. The contract is to be fulfilled in the Zhongshan and Nagang Districts of Taipei.
- The General Staff awarded the American Institute in Taiwan a NT$22.88 million (US$0.73 million) contract for “Integrated air defense services”. Integrated air defense services likely refers to Taiwan’s air and missile defense system, the T-Dome. The contract is to be fulfilled in the Zhongshan district of Taipei.