MONDAY, JULY 6, 2026|No. 6103
Defense · Budget · Taiwan

KMT budget cuts reduce drone funding, spark criticism

The Kuomintang-led Legislative Yuan approved a scaled-down defense budget that eliminates domestic drone R&D and procurement, drawing sharp criticism from a U.S. military analyst who warns it undermines Taiwan's hedgehog strategy.

A Taiwanese military drone on display at a defense exhibition, representing the capabilities now threatened by budget cuts.
A Taiwanese military drone on display at a defense exhibition, representing the capabilities now threatened by budget cuts.
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In response to the Kuomintang's deletion of drone research, development, and procurement plans in the Legislative Yuan, American military journalist and author David Axe pointed out that Taiwan will lose a golden opportunity to develop drones, especially small drones. These deleted projects are core weapons for turning Taiwan into a "hedgehog" that is difficult for enemies to swallow. Losing this opportunity means that Taiwan, currently only a "small hedgehog," may never have the chance to grow.

In a commentary published on July 6 in "The Strategist", a defense and international relations review published by the Australian Strategic Policy Institute (ASPI), Axe noted that in early May this year, the KMT-led Legislative Yuan passed a special defense budget, but it was not the original proposal submitted by Lai Ching-te's administration; rather, it was a scaled-down version heavily cut by the KMT. The KMT, led by party chair Cheng Li-wen, slashed the original $40 billion special budget to $25 billion and removed key defense expenditures.

Specifically, all indigenous research, development, and procurement plans in Taiwan were deleted, including the critical item of procuring 200,000 small drones. The budget only retained large purchases of U.S.-made ammunition, such as Patriot air defense missiles.

What makes Taiwan's situation even worse is that just as the special budget was passed, U.S. President Donald Trump announced a freeze on arms sales to Taiwan. Trump treats arms sales to Taiwan as a bargaining chip in negotiations with Chinese President Xi Jinping, shelving announced arms deals worth $14 billion in missiles and other weapons—exactly the items Taiwan's special budget was intended to cover.

If Trump continues to refuse approval of arms sales, the $25 billion worth of U.S. weapon plans in the special budget may also fall through along with the domestic weapon projects. In the worst-case scenario, the special budget may have nowhere to be spent, effectively wasted.

For those who support a free Taiwan, what is most distressing is not just the delay in obtaining expensive large U.S. weapons like Patriot interceptors, Javelin anti-tank missiles, or HIMARS multiple launch rocket systems, but the loss of the golden opportunity to develop drones, especially small drones.

Drones can be produced quickly and cost-effectively by Taiwan itself, without excessive reliance on distant and unpredictable allies. As Ukraine's experience in resisting Russian aggression shows, drones are absolutely a key component of Taiwan's defense against Chinese invasion.

Just as Taiwan should be ramping up drone production capacity, the KMT has intervened to block the development of the industry chain. Government funding not only helps the military build inventory but also encourages domestic industry to expand production lines, hire personnel, and invest in R&D. The KMT's action is like deliberately picking out the items that best help Taiwan implement its "hedgehog strategy" and strangling them.

Although few expect Taiwan to repel China on its own, the hedgehog strategy at least slows down the advance of the People's Liberation Army, buying time for allies to intervene.

Axe pointed out that to prevent a Chinese blockade before an invasion, Taiwan urgently needs to establish multiple backup weapon systems. Taiwan has been promoting parallel deployment of domestic and U.S.-made weapons, such as simultaneously deploying domestic Hsiung Feng and U.S. Harpoon anti-ship missiles, domestic Tien Kung and U.S. Patriot air defense missiles, and domestic Thunder 2000 and U.S. HIMARS rocket systems. Similarly, while procuring U.S. drones, Taiwan also planned to significantly expand its domestic drone industry, with the latter being more strategically important.

Domestic manufacturing capability for small drones is crucial. Within two years of the Russia-Ukraine war, Ukraine developed its drone industry from nearly zero into a massive system producing millions of FPV suicide drones and hundreds of thousands of long-range attack drones annually, successfully hunting Russian forces on the front lines and striking their rear supply lines.

However, Ukraine only gained time for industry expansion by sacrificing large swaths of territory in the eastern Donbas region. Taiwan's area is only 6% of Ukraine's, with no room to "trade space for time." Once China invades, Taiwan must have the ability to mass-produce millions of defensive drones. Without government investment, Taiwan cannot be prepared.

Axe stressed that the KMT is blocking this critical investment and combat readiness capability, potentially causing Taiwan, a small hedgehog that has just grown its spines, to lose its chance to protect itself before it can grow up.

PAN's pipeline reviewed approximately 1 open sources for this article. No human editor reviewed this article before publication.

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