Mon, Mar 30, 2026 page2

• Special defense budget could help local industry

  CONSOLIDATED PRODUCTION: Local production of ordnance could make money and aid security in peace time and help refill rapidly depleted arsenals in wartime

  • By Fang Wei-li / Staff reporter
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  The US supports a comprehensive special defense budget because it focuses on two core objectives — building a “non-red supply chain” and building redundancy for “logistics and replenishment,” a defense analyst said yesterday.

  Deliberations over the special defense budget hit a stalemate last week as the opposition parties insisted on removing the line items related to “consignment production” and “commercial procurement,” preventing a cross-party consensus from being reached.

  As the deadline to pay for the initial installments for US arms, including HIMARS rocket artillery, M109A7 self-propelled howitzers, and Javelin and TOW missiles, is today, failure to make the payments on time could delay subsequent contract negotiations until the end of the year.

  

  The military launches rockets from a High Mobility Artillery Rocket Systems (HIMARS) battery during a drill in Pingtung on 12 May 2025.

  Photo: EPA

  Regarding the “consignment production” and “commercial procurement” items that the opposition parties insist on removing, Shen Ming-shih (沈明室), a research fellow at the Institute for National Defense and Security Research, said yesterday these items actually carry deep implications for future Taiwan-US cooperation.

  They should be seen through the perspective of growing the national defense industry and logistics and supply, he said, adding that they are not only part of a military strategy, but also economic opportunities for the private sector.

  Shen said the US is pushing to eliminate the “red supply chain” and Taiwan could consolidate some of its own military supply sources, so collaborative production with the US can achieve a win-win outcome.

  First, it ensures that co-produced products are safe and reliable. Second, it encourages US investment in Taiwan, driving profits for the local defense industry and expanding its market scale, he said.

  “This is highly beneficial for Taiwan, the US, the defense industry and the combat capabilities of the armed forces,” Shen said, adding it is perplexing to see the budget get cut due to political interference when there is no evidence of illicit gains or corruption.

  He went on and said Taiwan could become an ammunition supply hub in the Indo-Pacific region after it spins up its own production lines.

  He said the US is working to improve integrated deterrence across the First Island Chain, such as the collaborative production of Patriot missiles with Japan, because the Russia-Ukraine War showed that there is a massive demand for 155mm rounds, but global supply remains insufficient.

  The Ministry of National Defense announced plans to build 14 new ordnance production lines to establish local production capacity in Taiwan, he said.

  From a logistics and supply perspective, once a conflict erupts, ammunition on the front lines would be consumed extremely fast and it would be difficult to sustain defense operations without local production capacity, he added.

  If Taiwan can build up this capacity, it can meet its own needs during peacetime and serve as a supply hub for allied nations in the Indo-Pacific or East Asian regions during wartime, Shen said.

  During the 2003 Iraq War, when the US faced a shortage of small arms ammunition, Taiwan stepped in as a supplier, he recalled, adding it proved that Taiwan has potential to become a critical link in the regional defense supply chain.

  Su Tzu-yun (蘇紫雲), director of the Institute for National Defense and Security Research’s Defense Strategy and Resources Division, yesterday warned that delays in payments for US arms purchases first affect political credibility.

  Since US price quotes are time-sensitive, any delays would force the Defense Security Cooperation Agency to go through the US Department of Defense and have suppliers and contractors re-estimate prices for the next 90 days, he said.

  Su pointed out that there is high demand for HIMARS batteries in Europe. If Taiwan’s process is delayed, the delivery schedule would be pushed back, with other countries receiving priority, he said, adding this could severely impact Taiwan’s military buildup and the integrity of its force development.

  Su expressed concern that if Beijing’s influence comes into play, any perception of Taiwan’s lack of commitment to the purchase could give US “red team” factions — pro-China groups or those opposed to arms sales to Taiwan — an opportunity to block the deal.
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