Taiwan's $25 Billion Answer to a Frozen $14 Billion
The Chip That Doesn't Cash
Acting Navy Secretary Hung Cao told a Senate hearing in May that the $14 billion arms package Congress approved in January is paused. That one word matters more than it sounds like it should. A bargaining chip only works if it stays on the table. So the frigates and missiles Taiwan had already budgeted for are not something Taipei can count on getting. Right now, they are something Washington can trade away instead. Legislative Yuan Speaker Han Kuo-yu, the head of Taiwan's parliament, spent June 21 to 26 in Washington testing how firm that freeze really was. On June 24 he met seven Democratic senators, including Jeanne Shaheen, the ranking member (the senior member of the minority party) on the Foreign Relations Committee. The next day he met more than 30 House members at a reception. Shaheen's own statement, issued June 24, praised the relationship. It named no release date. Han flew home with warmth, and nothing more.
The Budget Answers Anyway
Taiwan did not wait for an answer, and that decision is the real story here. In May, before Han's delegation had even left for Washington, the Legislative Yuan passed a $25 billion special defense budget built specifically to fund the stalled US package. In effect, Taiwan is now paying in advance for hardware that may never arrive. Then, on July 1, the military stood up a Littoral Combat Command. It pairs indigenous Hsiung Feng missiles with US-made Harpoons inside the 24-nautical-mile band around the coast, the waters closest to home and the least dependent on American supply chains. That siting choice is the tell. No government builds a coastal missile command in the same month it is still lobbying Congress for a bigger package, unless it has already decided the lobbying might fail, and wants a fallback that does not need Washington's cooperation to work. Meanwhile, the young men meant to crew any of this are running out. Fill rates have dropped from 88.6 percent in 2020 to 75.6 percent last year, and the draft-eligible pool is projected to fall below 75,000 by 2031. Taipei is funding hardware Washington has not shipped, for a force it may not be able to staff.
The carrier Fujian transited the strait on June 23, one day into Taiwan's own readiness drills, and coast guard ships have patrolled Taiwan's eastern waters continuously since June 1. Beijing calls this routine. The next test is the Legislative Yuan's fight over a 210 billion NT dollar drone budget. If lawmakers keep funding it through the summer, the self-reliance turn holds. If the fight stalls, this was a season of nerve, and little else.