Taipei: President Lai Ching-te’s strategy to boost Taiwanese investment in the United States and enhance the nation’s defense budget is being viewed as a strategic response to U.S. President Donald Trump’s recent tariff announcements, scholars have informed CNA.

According to Focus Taiwan, the initiative came after Trump declared plans to enforce reciprocal tariffs on exports from nations he claims maintain unfair trade practices against the U.S. In response, President Lai convened a national security meeting and presented a plan to increase Taiwanese investment in the U.S. and elevate defense spending to 3 percent of Taiwan’s GDP in the current year.

For the fiscal year 2025, the Taiwanese Cabinet had previously allocated NT$647 billion (approximately US$19.79 billion) for national defense, which represents 2.45 percent of Taiwan’s GDP. Julian Ku, a law professor at Hofstra University, highlighted that President Lai is taking the right approach in managing relations with President Trump. According to Ku, Trump values allies that can manage their defense with minimal U.S. dependency and engage in fair investment and trade with the U.S.

Ku emphasized that Lai’s objective should be to align Taiwan’s image in Trump’s perspective with that of Japan. However, he pointed out that Lai must deliver tangible outcomes, as his administration cannot mandate Taiwanese companies to invest in the U.S., nor does it have unilateral control over the defense budget, which requires legislative approval in Taiwan.

A potential strategy suggested by Ku involves Taiwan committing to significant U.S. energy purchases, including Liquefied Natural Gas (LNG), as a demonstration of goodwill. Ku believes such actions would provide tangible benefits to Trump and the U.S., which are straightforward and impactful.

Drawing parallels with Japan, Ku noted that Japanese Prime Minister Shigeru Ishiba demonstrated goodwill in his initial meeting with Trump by committing to substantial U.S. investments and additional LNG purchases, a move considered diplomatically successful by some analysts. Ku further recommended on social media that Taiwan could emulate such actions to reinforce its diplomatic standing with the U.S.

Richard Bush, a nonresident senior fellow at the Brookings Institution, described Lai’s proposals as “good-will initiatives” but expressed uncertainty about the Trump administration’s response. Bush, a former chair of the American Institute in Taiwan, remarked that a coherent Taiwan policy might still be lacking in the current U.S. administration and cautioned against public complaints that could undermine effective cooperation based on mutual interests.