U.S.-Taiwan Trade Agreement Tied to Taiwan's Defense Budget Raises Concerns Over Losing Autonomy
United Daily News Editorial, February 26, 2026
The administration of President Lai Ching-te included Taiwan’s defense spending exceeding 3 percent of gross domestic product (GDP) into the text of the U.S.–Taiwan Agreement on Reciprocal Trade (ART). Unexpectedly, U.S. President Donald Trump then confirmed that he was discussing future arms sales to Taiwan with Chinese President Xi Jinping. Meanwhile, the U.S. Supreme Court’s ruling that Trump’s reciprocal tariffs are unconstitutional has cast uncertainty over how the United States will implement reciprocal trade agreements signed with various countries. The only certainty is that the Lai administration touted its negotiations as both proactive and prudent over a cup of bubble tea—yet that very cup was immediately placed on the negotiating table as an extra dish for the United States and China. By allowing Beijing to interfere in Taiwan’s defense budget, does President Lai not feel that Taiwan’s determination for self-defense has been slighted? And how is the legislature to calmly review an astronomical special defense budget?
Before Mr. Trump’s visit to the mainland, he discussed arms sales to Taiwan with Beijing. Foreign media believe this sets a “dangerous precedent,” allowing Beijing to interfere in U.S. arms sales to Taiwan. Mr. Trump’s move violates the United States’ Six Assurances to Taiwan and makes it clear that the ART serves only to safeguard American interests unilaterally. The Lai administration claims the ART enhances alignment between the two sides on economic and security positions, yet while Taiwan commits to defense spending, it secures no American pledge to come to its defense—there is not even a guarantee mechanism for timely delivery of arms sales. Even the promised preferential tariff rates have become void after reciprocal tariffs were ruled unconstitutional; there is no real reciprocity. More absurdly, the timing and quality of arms sales may be subject to Beijing’s interference, turning them into bargaining chips in U.S.–China negotiations.
President Lai says that defense spending accounting for at least 3 percent of GDP is something he had already declared, unrelated to negotiations with the United States. The reality is that when a president’s unreasonable pledge is written into a bilateral treaty, it inevitably constrains the choices of the nation and its people. If such a commitment could secure an explicit American pledge to defend Taiwan, then the public might view it as far-sighted strategy. But if it merely hands over defense autonomy to Mr. Trump as a “souvenir” for his mainland visit, then would that not amount to allowing Beijing to join Washington in directing Taiwan’s military development? The Lai administration accuses the opposition of “taking instructions from Beijing to block the defense budget”—but what has it done itself?
Even countries facing severe external threats rarely write a specific defense spending ratio into an external treaty, thereby turning it into a national obligation and weakening their ability to respond flexibly to national security or fiscal pressures. Even American allies such as North Atlantic Treaty Organization (NATO) members, Japan, and South Korea, though required to share defense costs, make such commitments only in security documents. Moreover, the United States has left itself room for maneuver in implementing the agreement. Regardless of whether Taiwan meets the 3 percent defense spending target, the United States may at any time impose additional tariffs or take measures against Taiwan on the grounds of “protecting the economy or national security,” unlike typical trade agreements that contain dispute arbitration mechanisms.
In short, committing to a fixed defense budget ratio effectively allows the United States to allocate Taiwan’s budget according to its own military needs. Some argue that the defense spending pledge represents a “deep binding” of U.S.–Taiwan relations; yet Mr. Trump and Mr. Xi’s discussion of arms sales to Taiwan serves as a wake-up call to such national security illusions. If Taiwan’s arms purchases are delayed due to Beijing’s obstruction, or if weapon performance is discounted, yet Taiwan must still allocate defense funds as agreed, then where is Taiwan’s autonomy? After being “brokered” by the United States and China, what deterrent capability can Taiwan still claim from such arms purchases?
Mr. Xi’s proactive request that Mr. Trump “handle arms sales to Taiwan prudently” may be related to Japan’s preparations to lift restrictions on arms exports to help the United States strengthen the arming of the First Island Chain. Arms sales to Taiwan is becoming increasingly complex. Why is the United States so eager to codify Taiwan’s defense budget into the ART? If President Lai insists that defense spending has already exceeded 3 percent of GDP, that there is no implementation problem, and that it is unrelated to negotiations, then why deliberately bind defense spending within a trade agreement? If the United States adjusts tariffs on Taiwan without restoring the original preferential conditions, then will President Lai still force the public and the next generation to bear the shackles of a defense budget constrained by a foreign country?
The Trump administration is rewriting the rules of the global tariff game, and the U.S.–China negotiating table is filled with uncertainties. Whether Taiwan and other countries will face additional tariffs under different names remains to be seen. As for whether Mr. Trump and Mr. Xi will reach tacit understandings on the U.S. arms sales list to Taiwan and their timeline, only time will tell. At its root, Taiwan should never have pledged a specific defense budget ratio to the United States through a treaty. Who would be foolish enough to pay “protection money” to a “big brother,” only to have him turn around and negotiate concessions with the enemy camp? Before clarifying how the United States will handle arms sales to Taiwan and confirming preferential tariff treatment, President Lai should not insist that the legislature quickly pass the special defense budget and the U.S.–Taiwan ART. Taiwan must retain some room to maneuver.