Taiwan's Submarine Program: Why US Plans for 8 Submarines Really Failed

Taiwan's first domestically built submarine, the Hai Kun (海鯤號), completed two dive tests on January 29 and 30, drawing renewed public attention to Taiwan's long-delayed efforts to build an undersea deterrent. As in previous moments of heightened visibility, a familiar claim has resurfaced: had Taiwan's Legislative Yuan approved the budget in 2005 to purchase eight submarines from the United States, Taiwan would already possess a formidable underwater capability.

That claim oversimplifies what actually happened.

While prolonged budget reviews certainly displeased Washington, they were not the decisive factor behind the collapse of the submarine deal.The critical reason was that from early 2002 through late 2007, the United States was unable to secure cooperation from any European country willing to assist in building diesel-electric submarines for Taiwan. Germany and Spain—countries on which the United States had placed particular hope—ultimately declined to participate. Without European cooperation, the project lacked a viable execution path, regardless of Taiwan's internal legislative process. （Related： China Signals Limited Thaw by Reopening Shanghai–Kinmen–Matsu Tourism After KMT–CPC Forum ｜ Latest ）

Why the United States Needed European Cooperation

When the United States announced the sale of eight submarines to Taiwan in April 2001, the decision immediately encountered strong opposition within the U.S. Navy. Two concerns were central. First, the U.S. Navy had decided in 1959 to pursue an all–nuclear-powered submarine fleet and had not built conventional diesel-electric submarines since then. Second, submarine commanders worried that reopening conventional submarine production lines could lead Congress to favor lower-cost conventional submarines over nuclear ones.

To work around these constraints, the U.S. Navy initially planned to adopt an international procurement approach. Under this model, a foreign contractor would build the submarines and deliver them to the United States, which would then transfer them to Taiwan. In November 2001, the United States invited submarine manufacturers from several countries—including firms from Europe—to a contractor briefing. Taiwan's own shipbuilder also expressed interest in participating, with support from the legislature.

This approach soon changed.

In December 2002, the U.S. government reversed course and restricted prime contractor eligibility to a small number of American defense companies. Given continued opposition within the U.S. Navy to restoring domestic conventional submarine production, these American firms were required to seek foreign partners to provide submarine designs and hull construction, while integrating U.S.-made non-propulsion electronic systems, including combat systems.

In practical terms, this meant that without a European shipbuilder willing to cooperate, the submarine sale could not proceed.

European Reluctance and the Closing of the Window

American defense contractors subsequently sought partnerships with European submarine manufacturers, focusing in particular on Germany and Spain. At the time, both countries' shipbuilding industries were under financial strain, leading U.S. firms to believe that cooperation might be possible.

However, European governments faced strong political constraints. As noted in the original Chinese analysis, governments in Germany, Spain, the Netherlands, and France were all unlikely to approve submarine cooperation with Taiwan due to pressure from Beijing. Despite repeated efforts by the United States, no European government ultimately agreed to participate.

By the time Taiwan's government submitted the special arms procurement bill—covering submarines and other major weapons systems—to the Legislative Yuan in June 2004, the prospects for securing European cooperation had already deteriorated significantly. Without a confirmed European partner, there were no finalized submarine designs or construction plans on which to base detailed cost evaluations. As a result, Taiwan's Ministry of National Defense relied on a preliminary cost estimate provided by the U.S. Navy earlier in the process.

After the Budget Submission, the Impasse Persisted

Even as the special budget became entangled in domestic political controversy, the United States did not immediately abandon its efforts to persuade European governments. Attempts to revive cooperation with Germany and Spain continued in subsequent years but produced no breakthrough.

By late 2007, after repeated refusals from potential European partners, the U.S. government's position began to shift. With no feasible path forward, Washington signaled that Taiwan should consider withdrawing the submarine case.

What the Record Shows

The sequence of events makes one conclusion unavoidable. The failure of the 2001 submarine sale was not primarily the result of legislative delay in Taiwan. Rather, it stemmed from the United States' inability to secure European cooperation—an indispensable component of the project given U.S. naval policy and industrial constraints.

Even if the Legislative Yuan had approved the special budget in 2004 or 2005, submarine construction could not have proceeded without European participation.

The persistent focus on Taiwan's domestic politics obscures this structural reality. The episode instead highlights the limits of arms sales when geopolitical pressure constrains third-party cooperation—and when political risk outweighs commercial opportunity.

*The author is a researcher at the Association of Strategic Foresight and an adjunct assistant professor at Tamkang University's Graduate Institute of International Affairs and Strategic Studies.

Original Article in Chinese

（Related： China Signals Limited Thaw by Reopening Shanghai–Kinmen–Matsu Tourism After KMT–CPC Forum ｜ Latest ）