Money, weapons and secret meetings: What the Pentagon is doing to arm Taiwan

Last fall, during a House Armed Services Committee hearing, the Pentagon came with a message: Help us help Taiwan.

The year before, Congress had for the first time allowed the Defense Department to ship its own stocks to the island nation — up to $1 billion each year. But lawmakers didn’t offer funding to replace those stocks. To some in the Pentagon, it was like being asked to donate to a food bank without a grocery budget.

So as lawmakers quizzed witnesses about how to better support Taiwan, officials repeated their request for funding.

“There is no money,” Ely Ratner, head of Pentagon policy for the Indo-Pacific region, said during the 2023 hearing.

But there is now: In April, Congress passed a $95 billion defense bill, with about $4 billion in potential Taiwan aid. Nearly half of that chunk is for replacing donated stocks.

The challenge now is for the Pentagon to deliver.

This week, U.S. Defense Secretary Lloyd Austin flew to Singapore for the Shangri-La Dialogue, a security forum that draws leaders from across the region and beyond. His schedule includes a meeting with his counterpart in China, which recently ran large military exercises around Taiwan — a rogue breakaway province in the eyes of leadership in Beijing.

As Austin travels, the Pentagon’s system used for sending aid to Taiwan is working through another cycle. To accelerate that process, Deputy Defense Secretary Kathleen Hicks had formed a senior integration group for the Asian nation in 2022. The secretive group, which gathers a cross-section of Pentagon leaders, met last week, according to a congressional aide.

Defense News spoke to sources in Congress, the Pentagon and think tanks, as well as former government officials, to understand the future of U.S. support to Taiwan. Many spoke on the condition of anonymity, either because they weren’t permitted to talk to the press or were discussing sensitive topics. Collectively, they described a moment of urgency for both sides — to harden Taiwan’s defenses and to prove that the Pentagon can quickly act when given the chance.

“The whole idea is for these guys [Taiwan] to … deter, and if deterrence is not an option, to be able to hold their own for a period of time,” a senior American defense official said. “Waiting until after the fact is not necessarily helpful.”

‘We have the authority’

Months before Ratner testified, Austin visited Capitol Hill for a different hearing. Sen. Roger Wicker, R-Miss., the ranking member of the Senate Armed Services Committee, asked the secretary about the Pentagon’s new ability to draw down stocks for Taiwan.

“We have the authority,” Austin said. “We’ll need the appropriations as well.”

Around the time Austin spoke, the Defense Department was using that authority to plan its first round of aid. The president signed this package — valued at $345 million — in the spring though it wasn’t announced until the summer, and the administration didn’t identify the weapons included.

This left $655 million worth of its own stocks that the U.S. could still send. For a time, the Pentagon considered providing more and started planning another package, congressional aides and former officials told Defense News.

But it never happened.

“As we started to build some of the options for subsequent drawdown tranches, it just got harder and harder institutionally,” one former defense official said. “There was a lot of friction because the bureaucracy felt they were being spun into a full cycle of work without any money.”

Most of this friction came from the services, according to this former official and a second congressional aide. In particular, the Navy and Air Force were concerned that sending more equipment would harm America’s own military readiness in the Pacific.

The U.S. government doesn’t recognize Taiwan as an independent country and won’t officially commit to its defense. Still, they share close ties and work together on a long list of arms Taiwan has ordered from American companies — including $19 billion in foreign military sales.

U.S. President Joe Biden said multiple times early on in office that America would aid Taiwan if the island comes under attack. Indeed, China has prepared for U.S. involvement during military exercises, as Ratner noted in his testimony last fall.

The concerns over readiness aren’t overwrought. Were China to attack Taiwan and the U.S. to join the fight, America would likely be short on many of the weapons that U.S. Indo-Pacific Command says it needs.

Later in the year, according to the first congressional aide and another source familiar with the discussions, Austin froze Taiwan packages amid a lack of replenishment money from Congress. The choice, according to multiple sources, went against the preference of the White House and some in the State Department, who preferred the U.S. send more packages.

‘A million different things’

Because drawing down stocks is the fastest way to arm U.S. partners, the moratorium halted short-term aid to Taiwan. The choice also belied the importance senior Pentagon leaders had given the issue.

In late 2022, according to multiple sources who cautioned they couldn’t recall the exact date, Hicks formed a senior integration group for Taiwan, known in the Defense Department as SIG-T.

Its purpose is to focus all the relevant leaders in the Pentagon on a single issue — in this case, support for the island nation. It includes membership from the services, Indo-Pacific Command, acquisition and sustainment offices, policy offices, and other entities in the Defense Department. They meet regularly and report to Hicks.

When it was formed, there had only been two other such groups — one for the wars in Iraq and Afghanistan and another in response to Russia’s full-scale invasion of Ukraine. This was the first time the Pentagon used the model for a partner not at war.

The Defense Department has not publicly spoken about the group. However, Gen. CQ Brown mentioned it in written testimony provided last year during his hearing to become chairman of the Joint Chiefs of Staff.

In a statement to Defense News, a spokesman for Hicks didn’t acknowledge SIG-T and declined to discuss how the Pentagon coordinates support to Taiwan, except to say that it follows the government’s decades-long policy toward the island.

The benefits of the group are twofold: It brings the Pentagon’s offices responsible for Taiwan aid to the same table, and it ensures that table includes Hicks, who can overcome the sluggishness of bureaucracy.

But the second congressional aide said the group’s emphasis on material support has involved opportunity costs. Preparing Taiwan to defend itself is an enormous task, one that goes far beyond hardware. It would need to prepare stockpiles of medical equipment and food as well as fortify infrastructure. The aide argued that the group’s focus on drawdowns, which were eventually paused, meant losing time on these related problems.

“At the end of the day, with Taiwan, there’s a million different things that we should be doing at the same time,” the aide said.

Money moves

That criticism is less relevant now, given the $4 billion included in the national security supplemental passed in April.

Of the $1.9 billion funding for replenishment, the top priority is to replace stocks sent last year, multiple sources said. Because new equipment costs more — the markup is about 20% for weapons sent to Ukraine, per the Pentagon — the Defense Department has closer to $1.5 billion than $2 billion to send new kit.

This aid will likely move faster, since the Pentagon already has a set of priorities. Drawdown packages rely on homework done by Indo-Pacific Command, which has sent the Pentagon a list of what Taiwan needs the most.

The top goals in this list, unlike those on order via foreign military sales, are for smaller-end assistance, such as munitions, mines, drones, training and sustainment, according to multiple sources.

“It’s not really the level of spending that would allow you to purchase a lot of new major platforms,” said Randy Schriver, who led Pentagon policy for the Indo-Pacific region under the Trump administration and now runs the Project 2049 Institute think tank.

The other half, or $2 billion, included in the supplemental is for foreign military financing. This cash assistance helps Taiwan buy military equipment, but does not help speed up the slowly moving $19 billion worth of U.S. arms that Taiwan has already ordered — an invoice that mainly includes large platforms like F-16 fighter jets.

“It’s going to take a very long time for that [financing] to turn into actual capability,” said Zack Cooper, who studies the Indo-Pacific region at the American Enterprise Institute think tank.

Limitations

Last week, after a speech from Taiwan’s incoming president, China launched a bout of military drills around the island, calling them “punishment” exercises.

U.S. officials condemned the drills, which ended over the weekend. But the military activity was a reminder of how fast the situation around Taiwan can escalate as well as the challenges the U.S. government faces in regard to the island.

The first issue is logistical. Taiwan has a smaller military than that of the United States, and that limits how much aid it can absorb. Estimates vary on how much the island can usefully accept per year, but Cooper said the dollar value of this limit could be as low as $500 million.

Another issue is strategic. During the Trump administration, the government took a firmer approach to Taiwan’s defense planning, multiple sources told Defense News. In the past, the military preferred to buy large platforms, such as fighter jets and tanks, and the U.S. used to defer to those orders. But it doesn’t anymore.

Instead, Washington is now urging Taiwan to take an “asymmetric” approach, or one focused almost solely on denying China’s ability to invade. Some in Taiwan chafe at this strategy because it gives them fewer options when China uses tactics that fall short of an actual war — like scrambling fighter jets in the island’s airspace.

The other challenge is political.

Sino-U.S. relations suffered after then-House Speaker Nancy Pelosi, D-Calif., visited Taiwan in 2022. China severed military talks, and when Austin attended the Shangri-La Dialogue last year, his sole interaction with the Chinese defense minister was a handshake and brief exchange of words.

Since a summit between Biden and Chinese leader Xi Jinping last fall, the relationship has improved — or at least plateaued. But it’s still fragile.

Meanwhile, some in Washington have grown increasingly concerned about a short-term conflict with China and are calling for the U.S. to surge defense spending in the Pacific, including aid to partners like Taiwan.

“If you have a democracy that’s so critical to us and many of the other countries in the world that [are] facing an existential crisis in single-digit years, what more would you do?” said retired Rear Adm. Mike Studeman, former chief of the Office of Naval Intelligence.

The balance between hardening these defenses and reassuring China is a delicate one. But it’s not like America’s partner in question doesn’t have practice, said Rupert Hammond-Chambers, head of the US-Taiwan Business Council.

“They’ve been living with this threat for decades,” he said.

Correction: A previous version of this story erroneously described the Pentagon’s Foreign Military Financing program, which is essentially cash assistance.