Budget shows shift in Taiwan-US cooperation: sourceBy Fang Wei-li and William Hetherington / Staff reporter, with staff writerThe government’s proposed NT$1.25 trillion (US$39.66 billion) defense budget would signal not only major arms procurements, but also a strategic shift in Taiwan-US defense cooperation toward local munitions production and joint production on artificial intelligence (AI) systems, a source said on Saturday last week. Cooperation would begin with drones and artillery shells, and later expand to precision-guided munitions and AI-assisted decisionmaking systems, the source said. Global defense production has been strained by the wars in Ukraine and the Middle East, prompting the US to promote “friend shoring” to share manufacturing burdens. This would mark a shift in Taiwan-US relations from a buyer-seller model to a joint production partnership, they said. The goal is to locally produce precision-guided munitions by introducing US technologies, tools and production systems, they said.

Source: Taipei Times January 07, 2026 17:15 UTC