Taipei: Taiwan’s Kuomintang (KMT), led by Cheng Li-wun, cut the island’s proposed $40 billion defence budget by roughly one-third, maintaining U.S. arms purchases but reducing domestic initiatives, including the drone industry, ahead of the Trump-Xi summit in Beijing.
Cheng defended the reductions as necessary to avoid a “blank check” for the Lai administration and labelled parts of the budget “vague,” while emphasising dialogue and strategic autonomy toward China.
Former U.S. Deputy National Security Adviser Matt Pottinger criticised the cuts to drone funding, highlighting drones as “cheap and effective” tools vital for deterring superpower threats.
Taiwanese intelligence officials warned that Cheng’s high-profile meeting with Chinese President Xi Jinping, the first for a KMT chair in a decade, could provide Beijing with a narrative of a “divided Taiwan” as Trump prepares for talks.
The budget reductions reflect Taiwan’s opposition strategy of balancing engagement with China and maintaining U.S. ties while controlling domestic defence spending.
Cheng, whose political trajectory includes student-activist roots, is reportedly eyeing a 2028 presidential bid, though she officially focuses on local elections this year and plans a trip to Washington in June 2026.
