Taiwan’s Cabinet approved a record NT$607.63 billion supplementary budget on September 3, and NT$145.7 billion of it (about US$4.6 billion) goes to defense. The headline number is big. The shopping list is bigger: more than 600 coastal surveillance and reconnaissance drones, over 40,000 coastal attack drones and a first batch of more than 100 small one-way attack boats.

That list is the asymmetric defense Washington has asked Taipei to build for years. Cheap, numerous, hard to target. The catch is procedural. The money still needs a vote in a Legislative Yuan controlled by the KMT and the Taiwan People’s Party, the same majority that already cut the government’s defense plans once this year.

The Reuters dispatch landed on the same day as the Taiwan presidential office was still processing the parliamentary vote.

US concerned by Taiwan defence delay 'concession' to China https://t.co/Tc9N9g1P7k https://t.co/Tc9N9g1P7k

— Reuters (@Reuters) May 9, 2026

The facts are straightforward. Taiwan President Lai Ching-te had sought $40 billion in supplementary defence spending to better deter China. After repeated delays by opposition parties, who hold the majority of seats, parliament approved only two-thirds of the money requested—all of it earmarked for US weapons, with domestically developed drones and missiles excluded from the package.

The past 48 hours in the Taiwan Strait are best understood against two converging pressures: the ongoing Balikatan 2026 exercises reshaping the military geometry of the first island chain, and the approaching Trump-Xi summit that has introduced a layer of calculated restraint — and calculated anxiety — into Beijing’s Taiwan posture.

Balikatan and the PLA response. The combined Balikatan 2026 exercises, running April 20 through May 8, mark a structural inflection. Japan is participating for the first time in an active operational role, not merely as an observer. The exercise has prominently featured sea denial systems — the US Navy-Marine Corps NMESIS and Japan’s Type 88 anti-ship missile — deployed to the Batanes Islands in the Luzon Strait. The positioning is deliberate: anti-ship systems in the Batanes directly contest the PLAN’s primary breakout route from the first island chain through the Luzon Strait. Beijing read it accordingly. The Southern Theater Command announced on April 24 that a surface task group led by a Type 055 guided missile destroyer, accompanied by a Type 052D destroyer, a Type 054A frigate, and a replenishment vessel, had conducted exercises east of Luzon. The STC conducted additional South China Sea exercises on April 28, citing Philippine provocations. Unverified satellite imagery circulated on PRC social media appeared to show the carrier Liaoning operating in the South China Sea with a three-destroyer, six-frigate escort group — Liaoning had transited the Taiwan Strait southbound on April 20. Separately, the PLAN’s new Type 076 landing helicopter dock departed Shanghai for sea trials in the South China Sea around April 22, possibly in conjunction with the response posture. The PLA also released footage of YJ-20 hypersonic anti-ship missile test launches, timed to coincide with the Balikatan peak, including previously unseen shots of the launch sequence beyond what was disclosed in December.