The United States has urged Taiwan to spend more effectively on defence and prioritise unmanned systems after Taiwan’s parliament approved only part of a major supplementary defence package requested by President Lai Ching-te.

Raymond Greene, director of the American Institute in Taiwan and Washington’s de facto ambassador in Taipei, said Taiwan needed not only to spend more but to “spend smarter” as it seeks to maintain the military balance with China. In remarks made in Taipei on 6 June, Greene said there was “no smarter way” for Taiwan to deliver immediate deterrence than investment in unmanned systems.

The message reflects growing US concern that Taiwan’s defence modernisation may be slowed by domestic political disputes at a time when China is increasing military, coast guard and grey-zone pressure around the island. Taiwan’s government has put drones and other asymmetric systems at the centre of its modernisation plans, but the opposition-dominated parliament last month approved only around two-thirds of a proposed $40 billion extra defence budget.

Taiwan Defence Budget Delay Raises Capability Gap Concerns

The cut funds included domestically made systems such as drones and missiles. Taiwan’s government is now trying to secure approval for the omitted items, arguing that they are central to deterrence. The dispute has become a test of whether Taipei can match its stated defence priorities with procurement decisions.

For Washington, the issue is practical. The United States remains Taiwan’s most important arms supplier and international backer, despite the absence of formal diplomatic relations. US officials have repeatedly urged Taiwan to invest in systems that can complicate any Chinese military operation, particularly mobile missiles, air defence, sea denial capabilities and drones.

Greene linked the argument directly to recent wars. The conflicts in Ukraine and the Middle East have shown how drones can change the character of warfare, providing surveillance, strike capacity and battlefield persistence at lower cost than many traditional platforms. For Taiwan, the relevance is clear: unmanned systems could help offset China’s numerical advantage and strengthen deterrence across the Taiwan Strait.

Taiwan faces a specific military problem. China has a much larger navy, air force and missile force, and has increased pressure through regular military activity around Taiwan. Beijing says Taiwan is part of its territory and has not ruled out the use of force. Taiwan’s government rejects China’s sovereignty claim, saying only the island’s people can decide their future.

A conventional arms race with China would be difficult for Taiwan to sustain. That is why many US and Taiwanese defence planners have argued for an asymmetric approach: large numbers of smaller, mobile and survivable systems that can impose costs on a stronger attacker. Drones fit that model because they can be dispersed, produced in larger numbers and adapted for surveillance, targeting, logistics or strike missions.

The budget dispute therefore has consequences beyond accounting. If domestic drone and missile programmes are delayed, Taiwan may become more dependent on imported systems at a time when global defence production is already under pressure. It could also slow the development of Taiwan’s own defence-industrial base, which Taipei wants to strengthen as part of its resilience planning.

The timing is politically sensitive. President Donald Trump’s recent meeting with Chinese President Xi Jinping in Beijing has unsettled some in Taipei, particularly after Trump said he was still considering whether to proceed with a new US arms sales package for Taiwan worth around $14 billion. Washington says its policy towards Taiwan has not changed, and Greene used his remarks to stress that the United States opposes any forced or coercive change to Taiwan’s status.

Even so, the uncertainty reinforces Taiwan’s need to build capabilities that are harder to delay through foreign political decisions. Domestic production of drones, missiles and related systems is one way to reduce that exposure, provided parliament approves the necessary funding.

The debate also carries lessons for Europe. Ukraine’s war has forced European governments to reconsider the balance between expensive legacy platforms and cheaper mass systems. The same question now applies in the Indo-Pacific: whether deterrence is strengthened more quickly by large headline procurement packages or by rapid investment in drones, air defence, ammunition and resilient command systems.

Taiwan’s situation is more urgent because geography gives it little margin for delay. Any conflict would involve air, sea, cyber and missile pressure from the outset. Systems that can survive initial strikes and continue operating in a contested environment are therefore central to credible defence planning.

The political opposition in Taiwan has argued that large defence appropriations require scrutiny, accountability and fiscal detail. That is a legitimate part of democratic budget oversight. But the strategic problem remains: delayed funding can create capability gaps, and gaps in defence planning are difficult to close quickly once a crisis begins.

For the United States, the warning is also about signalling. If Taiwan’s own legislature cuts or delays key defence items, it may weaken the message that Taipei is moving quickly to strengthen deterrence. That matters in Washington, where support for Taiwan is strong but increasingly linked to expectations that allies and partners carry more of their own defence burden.

The immediate question is whether Taiwan’s government can restore funding for the rejected drone and missile programmes. The wider question is whether Taiwan can turn lessons from Ukraine and the Middle East into procurement decisions before China’s military pressure increases further.

Greene’s remarks were therefore more than a general call for higher defence spending. They were a direct argument about what kind of military investment matters most. For Taiwan, spending more may be necessary. Spending faster and more selectively may prove just as important.