Senate Bill Would Give Taiwan $3 Billion In US Military Aid Annually
Senator Josh Hawley (R-MO) introduced a piece of legislation on Tuesday that would authorize the Pentagon to give Taiwan $3 billion in military aid each year from 2023 through 2027.
The Arm Taiwan Act of 2021 would supply Taiwan with weapons and training “to accelerate Taiwan’s deployment of asymmetric defense capabilities required to deter or, if necessary, defeat an invasion by the People’s Republic of China.”
The $3 billion would be conditional on Taiwan investing a matching amount of funds, boosting its military budget, and implementing “defense reforms.” Despite all the hype around the idea of a Chinese invasion of Taiwan, the island’s military budget is a fraction of Washington’s.
For 2022, Taiwan unveiled a military budget worth $16.8 billion, or 2.1 percent of the island’s GDP, compared with the 3.5 percent GDP the US spends on its military each year. Taiwanese President Tsai Ing-wen has set a goal of eventually increasing the military budget to 3 percent of the GDP.
Even if Taiwan eventually spends 3 percent of its GDP on its military, the aid Hawley proposed would still be a sizeable chunk of Taipei’s overall budget. “We should do everything in our power to help Taiwan urgently strengthen its defenses,” Hawley said in a statement on the bill.
The US hasn’t had a mutual defense treaty with Taiwan since 1979, when Washington severed diplomatic relations with Taipei to recognize Beijing. But arms sales to the island continued through the decades and have increased in recent years.
Hawley’s legislation is just the latest from China hawks looking to put more support behind Taiwan. Republicans in the House and Senate have introduced the Taiwan Invasion Prevention Act, which would give the president war powers to defend Taiwan in the event of a Chinese invasion, and some Democrats are in favor of the idea despite the clear risk of nuclear war.
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Additionally, some brief commentary from Rabobank:
In the background, US Senator Hawley just introduced the ‘Arm Taiwan Act’, to pledge $3bn a year for asymmetric defense capabilities on the proviso that Taiwan matches that spending in kind. It may well not pass Congress, but it shows how US-China tensions continue to escalate. Likewise, as Nikkei Asia reported it yesterday:
U.S. GENERAL ANALYSIS | TAIWAN OK FOR 6-24 MONTHS
China is unlikely to try to seize Taiwan in the next couple of years, even as its military develops capabilities that would enable forcibly retaking the self-ruled island, he said.https://t.co/2Hz4LEshMU
— Nikkei Asia (@NikkeiAsia) November 3, 2021
“US GENERAL ANALYSIS – TAIWAN OK FOR 6-24 MONTHS”, reassuringly adding, “China is unlikely to try to seize Taiwan in the next couple of years, even as its military develops capabilities that would enable forcibly retaking the self-ruled island.” Normal times for markets, clearly. At least for six months anyway.
Thu, 11/04/2021 – 20:05