President Donald Trump declined to approve a US$400 million–plus military aid package for Taiwan over the summer, as his administration seeks a trade agreement and a possible autumn summit with China’s leader, Xi Jinping, according to multiple reports.

The move would mark a shift from recent practice of using Presidential Drawdown Authority (PDA) to ship equipment rapidly from US stockpiles. The Biden administration employed PDA three times for Taiwan, alongside other security assistance totalling more than US$2 billion. Mr Trump has signalled a preference for paid-for arms sales over grant aid.

Reporting indicates the shelved package was assessed as “more lethal” than earlier tranches, comprising munitions and autonomous drones. While the package could still be revived, the administration has simultaneously advanced discussions on fresh fee-paid sales. Officials this week informally notified Congress of a potential US$500 million sale, separate from any drawdown authority.

The policy debate comes against a backdrop of increased People’s Liberation Army (PLA) activity around Taiwan and Beijing’s stated objective of developing the capability to seize the island. US military and intelligence officials have previously assessed that Xi has directed the PLA to be able to take Taiwan by 2027, while stressing that the date is not a deadline for action.

Critics of any pause in PDA argue that slowing near-term deliveries risks signalling reduced resolve as China expands its forces. Dan Blumenthal, a former Pentagon official now at the American Enterprise Institute, was cited warning that this would be “exactly the wrong time” to ease support.

The administration has tempered certain elements of US pressure on China while seeking a broader economic arrangement, including steps concerning advanced semiconductor export controls and enforcement of congressional direction on TikTok. Those moves, alongside concerns about Taiwan’s air and missile stockpiles, have drawn scrutiny from some Trump-aligned alumni and Republican lawmakers.

US and Taiwanese defence officials met in Anchorage in August and agreed in principle to a substantial new package of arms sales, to be financed by Taipei through a supplemental defence appropriation now before its legislature, according to individuals familiar with the talks. The equipment mix would be largely “asymmetric” — drones, coastal defence missiles and sensor networks — intended to complicate any PLA assault. Delivery timelines for these systems could, however, extend over several years, with Taiwan still awaiting earlier orders including F-16 fighters and Harpoon anti-ship missiles.

Taiwan plans to devote 3.3 per cent of GDP to defence next year, with President Lai Ching-te setting a target of 5 per cent by 2030. US officials have for years encouraged Taipei to prioritise lower-cost, high-volume capabilities over major platforms, a shift now reflected in the focus on missiles, uncrewed systems and coastal surveillance.

Since returning to office, Mr Trump has sent mixed signals on China and Taiwan — launching a trade confrontation with Beijing in April while criticising Taipei over semiconductors — and the administration has curtailed some senior-level US-Taiwan defence contacts. The President has repeatedly stated that China will not invade Taiwan during his tenure.

Diplomatic outreach has continued in parallel. On 9–10 September, US Defence Secretary Pete Hegseth held his first call with China’s defence minister, Admiral Dong Jun. According to official readouts and wire reporting, Mr Hegseth said the United States does not seek conflict with China, nor regime change or “strangulation” of the People’s Republic, while underscoring that the Indo-Pacific remains a priority theatre for US interests.

Beijing has maintained a more assertive tone this month, including at the Xiangshan Forum in Beijing, where Defence Minister Dong urged “unity” to avoid a return to the “law of the jungle”, while reiterating China’s position on sovereignty and opposition to external interference in Taiwan.

If the hold on US$400 million-plus PDA endures, near-term reinforcement of Taiwan’s inventories would rely on commercial sales and partner-funded transfers rather than drawdowns from US stocks. The administration’s informal notification of a separate US$500 million sale indicates that arms transfers remain on track, albeit on a paid basis, while the broader US-China negotiation proceeds.

For Taipei, the immediate requirement is bridging the delivery gap: securing munitions, sensors and other asymmetric systems that can arrive quickly, while accelerating domestic production to reduce exposure to extended lead times. Whether the paused PDA package is revived may hinge on trade diplomacy and potential summit with Chinese leader Xi Jinping this fall.