In late August, after months of heated debate and deadlock, Taiwan’s opposition-controlled passed a bill to fund the procurement of domestically made drones. Capped at US$7.56 billion and spread over six annual budgets, the Act on Strengthening Defense Autonomy and Developing the Unmanned Vehicles Industry directs the Ministry of National Defense (MND) to prioritize the purchase of inexpensive, high-performance uncrewed systems.
Crucially, in a rare example of political compromise, the Act also covers a few drone types requested by the MND but previously opposed by the opposition, including coastal attack and reconnaissance drones, as well as small suicide drone boats.
The new funding will be in addition to the NT$63.4 billion (US$2 billion) included in the 2026 budget passed last month to support domestic drone development and procurement, which will be overseen by the Ministry of Economic Affairs.
Though the administration has expressed serious concerns over some of the Act’s provisions, and it must still sign the bill before it can become law, the legislation nevertheless represents a clear starting point for an industry that many deem critical to Taiwan’s future defense. The money would help local drone-makers continue to scale up and find avenues to sell their products in Taiwan and overseas.
This comes as Taiwan faces an increasingly complex geopolitical environment, as well as uncertainty around U.S. arms sales. That includes a US$14 billion package thought to be postponed until after a planned meeting between U.S. President Donald Trump and Chinese leader Xi Jinping in September. At the same time, weapons that Taiwan has already purchased from the United States continue to face delivery bottlenecks and delays.
But the potential breaking of the funding impasse also coincides with more visible displays of U.S.-Taiwan defense and security cooperation. Notably, the American Institute in Taiwan (AIT) in late July posted a photo to social media of a rare joint coast guard exercise. In the post, AIT thanked Taiwan for its “partnership in maritime safety and security.” The significance of this extent of bilateral cooperation was not lost on observers or officials in Taiwan.
Meanwhile, Taipei has begun speaking more openly about such security coordination, including the growing presence of strapping “American English teachers” — a cover word for U.S. military personnel and advisors.
The impact of these developments is clearly reflected in Taiwan’s own defense preparations. This year’s Han Kuang exercises — Taiwan’s largest annual military drills — incorporated increased elements of a U.S.-style decentralized command structure.
Looking ahead to 2027, the Cabinet has already approved a proposal for next year’s budget, which puts military spending at just over 3% of GDP, fulfilling one of President Lai Ching-te’s key defense goals. The upcoming local elections in November and the inclusion in the bill of a NT$10,000 (US$300) universal cash payout to citizens and residents could help usher the legislation through with considerably less pushback than the 2026 budget.
All of this sends a powerful signal to the United States that Taiwan is indeed committed to its own defense and is working to adjust its strategy to meet U.S. standards.
The question now is whether the United States will keep up its institutional support for Taiwan, even if it has stepped back rhetorically in some regards. But Taipei may not need to worry too much. All signs appear to indicate that “American English teachers” are here to stay.
