President Lai Ching-te says the spending, which must be approved by the island’s legislature, would fund purchases of arms from the United States.

The remarks come amid the two countries’ worst diplomatic crisis in years, after the Japanese prime minister said a Chinese attack on Taiwan could trigger a military response from Tokyo.

The New Zealand navy's largest ship, the oiler HMNZS Aotearoa, made a rare transit through the sensitive Taiwan Strait earlier this month, Defence Minister Judith Collins told Reuters.

Taiwan's exports to the United States are currently subject to a 20% tariff, and Taipei has been in talks to reduce that figure as part of an overarching deal with Washington. Semiconductors, vital for all kinds of high-tech products, are currently exempt from tariffs while the U.S builds domestic capacity.

Currently, Taiwan’s exports to the US face a 20% tariff, with Taipei negotiating to decrease this as part of a broader trade deal.

China responds after Japanese newspaper reports that Tokyo views China’s first electromagnetic catapult-equipped carrier as priority target in event of attack on Taiwan - Anadolu Ajansı

A U.S. congressional commission has recommended that Taiwan help finance upgrades to Enhanced Defense Cooperation Agreement (EDCA) sites in the Philippines to strengthen Washington’s ability to defend the self-ruled island in the event of a Chinese attack.