Taiwan's legislature has yet to reach consensus on the Executive Yuan's proposed 'Special Act for Strengthening Defense Resilience and Asymmetric Combat Capability Procurement' (commonly referred to as the special defense procurement bill), totaling approximately NT$1.25 trillion (roughly US$ 38.5 billion).
The bill is currently under joint review with versions proposed by the KMT and TPP opposition parties. Cross-party negotiations led by Legislative Yuan Speaker Han Kuo-yu (韓國瑜) remained deadlocked following a session on April 27. Talks have been rescheduled to May 6, raising doubts about whether a third reading can be completed before the anticipated mid-May Trump-Xi summit—and whether the approved procurement amount will meet U.S. expectations. Numerous unpredictable variables remain.
U.S. pressure on Taiwan's opposition Kuomintang (KMT) to pass a sufficiently large defense budget has intensified in recent weeks. Officials from the American Institute in Taiwan (AIT), U.S. congressional members, think tank scholars, and American defense contractors have all engaged in lobbying efforts, primarily targeting KMT legislators.
Washington's minimum threshold, informed sources say, is a procurement figure of no less than NT$800 billion (approximately US$ 24.6 billion), with commercial arms purchases included under the bill's scope.
Can KMT's Defense Budget Formula Satisfy Washington?
KMT Chairperson Cheng Li-wun (鄭麗文) has maintained an unyielding posture on the procurement figure, even as U.S. pressure has mounted. This stance has held even after senior AIT officials came directly to the KMT before the Lunar New Year, issuing a blunt warning that Taiwan must pass the Executive Yuan's version of the special procurement act on schedule — or bear the consequences.
Her position — that Taiwan's legislature will act immediately and without delay upon receipt of a formal U.S. Letter of Offer and Acceptance (LOA), but will not pre-authorize funds beyond confirmed arms sales — has remained unchanged following at least two face-to-face meetings with AIT Director Raymond Greene, including one on April 22.
The KMT central leadership's formula, informally described as "NT$380 billion plus N," would in theory allow unlimited additional appropriations contingent on formal U.S. arms sale notifications.
Cheng has framed this as fiscal discipline and democratic oversight. Washington, however, has reportedly rejected this framework entirely. U.S. officials argue that arms sales to Taiwan require Washington to absorb diplomatic blowback from Beijing, and that Taiwan must first demonstrate credible self-defense commitment before the U.S. can justify the political cost of supporting it, according to informed sources.
Is the U.S. Lobbying KMT Legislators Directly?
With KMT central leadership unwilling to raise its ceiling, U.S. officials have shifted their approach toward the KMT's legislative caucus directly. The primary target figure is NT$ 800 billion (approximately US$24.6 billion) — well below the Executive Yuan's NT$1.25 trillion proposal, but sufficient to cover two announced arms packages totaling approximately $25.6 billion (US$11.1 billion and a forthcoming US$14.5 billion package).
AIT officials, including Director Greene, have held multiple meetings with Legislative Yuan Vice President Chiang Chi-chen (江啟臣), widely regarded as the KMT's most prominent pro-U.S. figure. AIT officials recently brought American think tank scholars to meet Chiang as well, according to sources familiar with the discussions.
Other KMT legislators identified as lobbying targets include Hsu Chiao-hsin (徐巧芯), Yeh Yuan-chih (葉元之), Lee Yen-hsiu (李彥秀), and Taichung Mayor Lu Shiow-yen (盧秀燕)'s allies Huang Chien-hao (黃健豪) and Lo Ting-wei (羅廷瑋). On April 23, AIT organized a meeting through Hsu that brought several KMT legislators together with Taiwanese and American defense contractors.
KMT legislators who attended the session later said no specific budget figure was discussed, describing the meeting as focused on the direction of Taiwan-U.S. defense industry cooperation.
However, a KMT insider said the message from AIT and the defense contractors was unmistakable: pass the bill quickly, include commercial purchases, and push for the highest possible funding figure. Signs of a quiet but growing internal split within the KMT legislative caucus have begun to emerge, with diverging views proving increasingly difficult to consolidate.
Will KMT Legislators Break from Party on Defense Bill?
Many KMT legislators are said to be caught between loyalty to the party leadership and reluctance to antagonize Washington. The compromise version gaining the most traction within the caucus was proposed by former China Broadcasting Corporation Chairman Jaw Shaw-kong (趙少康): appropriate NT$800 billion upfront, but freeze approximately NT$450 billion or attach conditions to its disbursement, with funds to be released only after the U.S. formally issues a second LOA, leaving only around NT$350 billion in confirmed arms purchases immediately accessible.
Under this framework, the total figure would nominally meet Washington's NT$800 billion floor while preserving the KMT central leadership's principle that disbursements must follow formal U.S. offers. A KMT insider described this as a variant of the "plus N" concept — with N defined in advance as roughly NT$400–450 billion rather than left open-ended.
Sources suggest that if the KMT caucus and Taiwan People's Party legislators align on this version, Washington's reaction would likely be "not entirely satisfied, but not strongly negative." Meanwhile, the KMT central leadership could accept the outcome as a political compromise — the Executive Yuan's NT$1.25 trillion version would still have been blocked, and some elements of the KMT's original framework would be reflected in the final text.
A senior KMT party official noted that Cheng has broader strategic priorities beyond the legislative battle — most notably a planned visit to Washington in June. That trip carries its own complications: Cheng's earlier Beijing visit and meeting with Chinese Communist Party General Secretary Xi Jinping drew criticism from hawkish U.S. officials concerned about cross-strait signaling.
Some observers have speculated her Washington reception could be downgraded — to the point where she might not be able to meet with senior U.S. officials or influential members of Congress. The party official, however, dismissed this view, arguing that the "Cheng-Xi meeting" would make her a more — not less — sought-after interlocutor for U.S. policymakers eager to understand Beijing's current thinking on cross-strait relations.
Can the Cheng-Xi Meeting Give KMT Leverage in Washington?
A former official from the Ma Ying-jeou administration with expertise in U.S.-China-Taiwan affairs drew a historical parallel: in late 2015, then-KMT Chairman Eric Chu (朱立倫) secured a Washington visit — initially rebuffed — by offering U.S. officials a firsthand account of that November's Singapore summit between Ma Ying-jeou and Xi Jinping. The former official argued that Cheng's direct interaction with Xi places her in a structurally similar position: U.S. officials will want to hear her account of what Xi communicated, as a window into Beijing's current intentions on cross-strait affairs.
Sources indicate the KMT intends to use the "Cheng-Xi meeting" as a diplomatic asset during the Washington trip. By June, the defense procurement bill will have been resolved and the Trump-Xi summit concluded, making the strategic landscape clearer. At that point, Cheng plans to present U.S. interlocutors with a cross-strait peace framework as an alternative to the ruling Democratic Progressive Party's posture of resistance toward Beijing.
The argument, according to informed KMT sources, resembles positions advanced by Lyle Goldstein, Asia affairs director at the Washington think tank Defense Priorities: that KMT-facilitated cross-strait reconciliation could prevent a catastrophic Taiwan Strait war and stabilize U.S.-China relations, thereby serving core American national interests.
KMT's Bet: Can Cross-Strait Peace Keep U.S. Out of a Taiwan War?
KMT sources say Cheng plans to reassure U.S. officials that the party maintains close communication with Beijing without abandoning the U.S. alliance, and that its opposition to the Executive Yuan's procurement bill does not reflect anti-American sentiment.
The strategic distinction she intends to draw, according to sources, is this: the DPP's pro-independence posture risks triggering a Taiwan Strait conflict that draws U.S. forces into a war Washington would prefer to avoid, whereas the KMT's cross-strait engagement strategy can reduce tensions and preserve the status quo without requiring American military intervention.
Cheng is said to believe this argument — that cross-strait reconciliation serves long-term U.S. interests by keeping American service members out of a preventable war — is one U.S. officials can understand and find persuasive. Both Washington and Beijing, she reportedly argues, have strong incentives to avoid armed conflict over Taiwan in the foreseeable future.
A senior KMT figure suggested the Washington trip could yield an additional political dividend: if Cheng persuades U.S. officials that Taiwan's interests are protected regardless of which party governs, and that a KMT government reduces the risk of U.S. military entanglement in a Taiwan Strait war, Washington may adopt a more neutral posture toward Taiwan's 2026 local elections and the 2028 presidential race — rather than maintaining its historically perceived lean toward the DPP. Such a shift, the source argued, would meaningfully benefit KMT electoral prospects.
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