The Situation Room - May 28th

Good morning everyone,

I’m Daniel, and welcome to The Situation Room! We cover the most high impact geopolitical developments every Wednesday!

Today’s topics:

• Taiwan Makes Commit Towards Modernizing Military

• Analysis: Naxal General Secretary Killed

• Washington DC Israeli Embassy Staffer Shooting Leads To Increased Security

Taiwan Makes Commit Towards Modernizing Military

_{By: Atlas}

President Lai Ching-te’s administration submitted a revised defense budget to the Legislative Yuan on 27 May that would lift military spending to 3 percent of GDP next year and 3.3 percent by 2028, up from 2.5 percent today. The plan earmarks NT$120 billion (US $3.7 billion) for unmanned systems, mobile coastal-defense missiles, and hardened fuel depots—items that Defense Minister Wellington Koo told lawmakers are “essential for an erosion strategy designed to attrit an invading force inch by inch.” Koo said Taiwan can no longer count on stopping the People’s Liberation Army at the water’s edge; instead it must be ready for prolonged fighting that preserves enough combat power for U.S. and allied reinforcement.

Drone and Unmanned-Systems Expansion

The centerpiece of the modernization drive is a rapid build-out of the so-called Drone National Team. Taiwan currently fields about 1,000 military-grade drones—tiny compared with the tens of thousands estimated in Beijing’s inventory—but contracts signed over the past year aim to deliver 180,000 civilian and military UAVs annually by 2028. Coretronic Intelligent Robotics expects to supply 3,000 surveillance and micro-strike drones this year, while Thunder Tiger Group is prototyping pilotless helicopters and unmanned surface craft for anti-landing missions. Local industry officials say the missing ingredient is scale; they continue to lobby tech giants such as TSMC and Foxconn to join the supply chain and drive down costs. To undercut dependence on Chinese components, the defense ministry last August issued NT$7 billion in “no-China-content” drone contracts and is negotiating a second round now.

Conventional Platforms and Asymmetric Shifts

The budget preserves headline programs such as the indigenous Hai Kun-class submarine, the first of which is to enter sea trials in September, and funds final deliveries of 66 F-16 Block 70 fighters ordered from the United States in 2020. At the same time, Koo has accelerated retirement of older tanks and naval hulls, redirecting money to truck-mounted Harpoon and Hsiung Feng anti-ship missiles, mobile HIMARS rocket batteries, and Stinger MANPADS. The ministry is also establishing dedicated drone battalions and plans to integrate unmanned surface vessels into the fleet from 2026, mirroring lessons from Ukraine’s maritime drone campaign.

Reserve Force and Societal Resilience

Taiwan extended compulsory service from four months to one year beginning this January; conscripts now receive infantry, drone, and anti-armor instruction rather than parade-ground drill. An All-Out Defense Mobilization Agency has been set up to organize a 1.5 million-strong reserve, coordinate satellite-based internet backup for when undersea cables are cut, and stockpile fuel and food in mountain tunnels. The government has also launched civil-defense television programming, including a mini-series titled “Zero Day,” to familiarize citizens with blockade scenarios.

External Constraints: U.S. Backlog and Industrial Bottlenecks

Despite Taipei’s larger orders, Washington still owes Taiwan more than US $19 billion in delayed equipment ranging from Stinger missiles to MQ-9B SeaGuardian drones. Pentagon officials told Congress this month that eliminating bottlenecks will require a multi-year surge in production lines already stretched by commitments to Ukraine. Admiral Samuel Paparo reiterated that his “unmanned hellscape” concept—saturating the Taiwan Strait with cheap air, sea, and subsurface drones—depends on both U.S. and Taiwanese factories hitting delivery targets. Meanwhile, Lai’s team is courting European buyers to create export volume that lowers unit costs; Poland has already taken delivery of Taiwanese reconnaissance drones, with Germany and the Czech Republic negotiating follow-on orders.

PLA Threat Trajectory

Taiwanese and U.S. defense officials say the People’s Liberation Army has reached a readiness state where amphibious, rocket, and airborne units can “switch from peacetime to war operations at any time.” Monthly PLA air incursions have risen from single digits five years ago to more than 240 today, and rocket-artillery brigades equipped with 300-km PCH-191 launchers can hit any point on the island. Analysts note the PLA’s exercises now combine missile, naval, and air components simultaneously, indicating maturation of joint command that was only aspirational before 2022. Against that backdrop, Koo assesses the threat level as “between medium and high intensity,” though not yet signaling an imminent attack.

Fiscal and Political Hurdles Ahead

The opposition-controlled legislature will debate Lai’s requested NT$688 billion defense top-up in June. Kuomintang lawmakers are skeptical of expensive indigenous projects such as light frigates and submarines but support drone expansion and reserve training. If the full package passes, Taiwan’s cumulative defense budget from 2026-30 would exceed US $110 billion, according to GlobalData forecasts, with about 15 percent allocated to acquisitions. Even with higher spending, Taiwan’s defense ministry acknowledges gaps in cyber resilience, joint targeting, and munitions stockpiles that will take years to close.

Outlook

Taiwan’s modernization push has moved from rhetoric to large-scale procurement, expanded conscription, and an indigenous drone industry that aims to match PLA mass with affordable platforms. Success depends on sustained legislative funding, timely U.S. deliveries, and the ability of local manufacturers to wean themselves from Chinese components. Beijing’s rapid military improvements compress timelines, but Taipei’s asymmetric focus—complemented by societal resilience measures—raises the costs of invasion and buys time for allied intervention. Whether that calculus deters Xi Jinping will hinge on how quickly Taiwan turns its ambitious plans into operational capability over the next two to three years.

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