Taiwan Security Report — February 25, 2026

Security analysis based on open-source intelligence and web research. Period: February 18 — February 25, 2026.

Executive Summary

The period from February 18 to February 25, 2026, saw a significant intensification of security concerns surrounding Taiwan, marked by escalating "gray-zone" tactics from Beijing and a robust response from Taipei and its international partners. Taiwan announced a record defense budget increase, surpassing 3% of GDP, and continued to bolster its military capabilities through acquisitions and exercises. Diplomatic friction emerged regarding potential U.S. arms sales to Taiwan amidst statements from U.S. President Donald Trump, though the U.S. House of Representatives passed legislation to deter Chinese aggression. These developments underscore a volatile strategic landscape, with both military preparedness and diplomatic signaling playing crucial roles in maintaining cross-strait stability.

Key Security Developments

• Chinese "Gray-Zone" Escalation and Military Posturing
  Chinese forces continued frequent military activity around Taiwan, building on large-scale exercises in late 2025, known as "Justice Mission 2025," which were seen as operationally realistic drills near Taiwan's maritime borders. This sustained pressure, including potential cyber disruptions, economic coercion, and maritime incidents, is interpreted as intensified "gray-zone" measures aimed at creating a high-tension "new normal" where miscalculation is increasingly possible.

• Taiwanese Live-Fire Training with U.S.-Made Abrams Tanks
  Taiwanese Army officers conducted live-fire training in Hsinchu using newly delivered U.S.-made M1A2T Abrams tanks, aimed at deterring a potential Chinese invasion. This highlights Taiwan's ongoing efforts to integrate advanced foreign defense assets into its military readiness.

• Record Increase in Taiwan's Defense Budget
  Taiwan plans to boost its defense spending by a fifth in 2026, reaching T$949.5 billion (approximately S$40 billion), which will exceed 3% of its Gross Domestic Product (GDP) for the first time since 2009. This 22.9% rise over 2025 includes funding for the coast guard and is a direct response to mounting military pressure from China and calls from the United States to increase self-defense capabilities.

• Taiwan's Han Kuang Exercises to Focus on Blockade Countermeasures
  Taiwan is preparing for its annual Han Kuang exercises, which will focus on countering a possible blockade of the island and maintaining the combat capability of its forces. These drills will incorporate lessons from the conflict in Ukraine, emphasizing the need to protect command and communication systems and will be extended in duration to enhance joint combat operations and responses to "gray zone" activities.

• U.S. President Trump's Comments on Taiwan Arms Sales
  U.S. President Donald Trump stated on February 18, 2026, that he was discussing potential arms sales to Taiwan directly with Chinese President Xi Jinping, an unexpected statement that raised concerns in Taipei. This approach departed from traditional U.S. practice and sparked fears that it could signal a weaker commitment to Taiwan's defense.

• White House Reaffirms U.S. Taiwan Policy and "Six Assurances"
  Following President Trump's comments, a White House official reaffirmed that U.S. policy toward Taiwan remains unchanged, upholding long-standing commitments, including the Six Assurances. These assurances state the U.S. will not set a date to end arms sales, will not consult China on these sales, and will not act as a mediator between Taipei and Beijing, among other commitments.

• U.S. House Passes "PROTECT Taiwan Act"
  In February 2026, the U.S. House of Representatives passed the PROTECT Taiwan Act with a vote of 395-2. This bill aims to deter China's military actions toward Taiwan by threatening to exclude China from international financial institutions, such as the Bank for International Settlements and Financial Stability Board, if its actions threaten Taiwan's security, economic, or social systems.

• U.S. Hesitation on Arms Sales Amidst Trump-Xi Summit Plans
  The United States is reportedly hesitating over whether to fulfill its next arms sales to Taiwan, valued at $20 billion, out of concern that it could derail President Trump's upcoming visit to Beijing. Chinese General Secretary Xi Jinping reportedly warned Trump against fulfilling these sales during a phone call on February 16.

• Taiwan to Mass Produce Tien Kung IV Air Defense Missiles
  Taiwan is set to commence mass production of its domestically developed Tien Kung IV (Sky Bow IV) air defense missiles in 2026, with an initial order of 122 launcher pods. This system is designed to intercept cruise and ballistic missiles at altitudes up to 70 kilometers, surpassing the capabilities of the U.S.-made Patriot Advanced Capability-3 (PAC-3) systems.

• U.S.-Taiwan Sign Agreement on Reciprocal Trade (ART)
  On February 12, 2026, the United States and Taiwan signed a new Agreement on Reciprocal Trade (ART) in Washington, D.C. This comprehensive deal aims to reduce or eliminate most tariff and non-tariff barriers on American imports in Taiwan, following an investment agreement in January 2026 that will see $500 billion in new investment in the U.S., particularly in the semiconductor and artificial intelligence industries.

• Chinese Signal Spoofing Near Tamsui River
  The Institute for the Study of War reported on February 23, 2026, that the PRC may be using signal spoofing to create illusory PRC vessels, including a China Coast Guard (CCG) ship, inside a Taiwanese harbor near the Tamsui River in New Taipei. This is assessed as a potential cognitive warfare effort to degrade Taiwanese threat awareness.

• Taiwan Rejects Chinese Foreign Minister's Claims at Munich Security Conference
  Taiwan's Foreign Minister Lin Chia-lung rebuffed comments made by Chinese Foreign Minister Wang Yi at the Munich Security Conference on February 15, 2026. Wang Yi had warned against efforts to "split Taiwan from China," but Lin asserted that Taiwan's sovereignty has never belonged to the People's Republic of China, emphasizing that China is the real threat to security.

Geopolitical Impact and Regional Dynamics

The recent security developments surrounding Taiwan have significantly impacted regional stability and relations with major powers. China's continued "gray-zone" tactics and large-scale military exercises, such as "Justice Mission 2025," demonstrate Beijing's persistent pressure on Taiwan and its readiness to project force across the Strait. This assertive stance is increasingly viewed by the international community as a destabilizing factor, prompting a hardening of policy stances from regional partners. Japan, for instance, has strengthened defense coordination with countries like the Philippines, which Beijing perceives as an "emerging containment chain." The U.S. has also expanded deployments of advanced missile systems to the Philippines and enhanced bilateral military cooperation, further complicating the regional strategic landscape.

The dynamic between the U.S., China, and Taiwan remains a central axis of geopolitical tension. While the U.S. House of Representatives passed the PROTECT Taiwan Act to deter Chinese aggression, U.S. President Trump's comments about discussing arms sales directly with Xi Jinping introduced an element of uncertainty. This highlights the delicate balancing act for Washington, which seeks to support Taiwan's defense while managing its broader relationship with Beijing, especially in the lead-up to a potential Trump-Xi summit. The reported hesitation on fulfilling arms sales to Taiwan to avoid derailing such a summit could be perceived as emboldening Beijing and encouraging further concessions from the U.S.

Taiwan's increased defense spending and focus on asymmetric capabilities are crucial signals of its determination to safeguard its sovereignty. President Lai Ching-te's warning that other regional countries would be China's next targets if Taiwan were seized underscores the broader implications of cross-strait stability for the entire Indo-Pacific. The new U.S.-Taiwan Agreement on Reciprocal Trade and significant investments in the semiconductor industry also highlight Taiwan's critical role in the global economy and its strategic importance to the U.S., adding another layer to the complex geopolitical calculus.

Military and Defense Analysis

Taiwan's military and defense posture during this period reflects a clear commitment to strengthening its self-defense capabilities in the face of persistent threats from mainland China. The most significant development is the proposed 2026 defense budget, which is set to exceed 3% of GDP for the first time since 2009, reaching T$949.5 billion (S$40 billion). This substantial increase, a 22.9% rise over 2025, demonstrates Taiwan's resolve to invest in new equipment and modernize its forces, aligning with calls from the United States for greater burden-sharing.

Modernization programs are a key focus, with Taiwan actively acquiring and developing advanced weapon systems. The integration of newly delivered U.S.-made M1A2T Abrams tanks into live-fire training exercises signifies an enhancement of Taiwan's ground defense capabilities. Furthermore, Taiwan is set to begin mass production of its domestically developed Tien Kung IV (Sky Bow IV) air defense missiles in 2026, with an initial order of 122 launcher pods. These missiles are designed to intercept cruise and ballistic missiles at high altitudes, providing a critical layer of defense against aerial threats. The proposed U.S. arms package, reportedly including Integrated Battle Command Systems (IBCS), Patriot Advanced Capability-3 Missile Segment Enhancement systems (PAC-3 MSE), and National Advanced Surface-to-Air Missile Systems (NASAMS), would further support the development of Taiwan's "T-dome" integrated air and missile defense (IAMD) network.

Taiwan's defense strategy emphasizes asymmetric defense, focusing on agility over scale to counter a numerically superior adversary. The upcoming Han Kuang exercises, which will be extended in duration and focus on countering blockades and maintaining combat readiness, are crucial for testing and refining these strategies. The drills will also incorporate lessons from the Ukraine conflict, particularly regarding the protection of command and communication systems and the ability to decentralize command in the event of attacks. The inclusion of the coast guard in the overall defense budget for the first time also highlights an increased focus on maritime and border security, particularly against "gray-zone" incursions.

Outlook and Forecast

Short-term trends (1-3 months): In the immediate future, Taiwan can expect continued Chinese "gray-zone" pressure, including military drills, cyber activities, and diplomatic rhetoric, designed to test Taiwan's resolve and international support. The diplomatic maneuvering surrounding potential U.S. arms sales will remain a critical area, with U.S. President Trump's statements and the reported hesitation to fulfill sales potentially creating uncertainty. Taiwan will likely proceed with its planned Han Kuang exercises, focusing on blockade countermeasures and integrating new equipment, further signaling its commitment to self-defense. The newly signed U.S.-Taiwan Agreement on Reciprocal Trade will begin its implementation phase, aiming to deepen economic ties.

Critical flashpoints and risk areas: The primary flashpoint remains the Taiwan Strait, where the risk of miscalculation due to intensified "gray-zone" activities is elevated. U.S. political shifts, particularly the impact of President Trump's approach to China and Taiwan, could introduce volatility into the long-standing U.S. policy of strategic ambiguity. China's internal political pressures, especially with Xi Jinping's approaching leadership milestone in 2027, could compel more provocative actions against Taiwan. The potential for cyberattacks and economic coercion against Taiwan's critical infrastructure also remains a significant risk.

Indicators to monitor: Key indicators to monitor include the frequency and scale of Chinese military exercises near Taiwan, particularly any drills simulating blockades or amphibious assaults. The progress of Taiwan's defense budget approval and the timely acquisition and deployment of new defense systems, such as the Tien Kung IV missiles and U.S. arms packages, will be crucial. Statements and actions from the U.S. administration and Congress regarding arms sales and security commitments to Taiwan will also be vital. Furthermore, any shifts in the diplomatic stances of regional partners like Japan and the Philippines, especially concerning defense cooperation, should be closely watched.

Strategic recommendations: Taiwan should continue to prioritize and accelerate its asymmetric defense capabilities, focusing on mobile, survivable, and precision strike systems that can deter or counter an invasion or blockade. Maintaining a clear and consistent message regarding its sovereignty and democratic values, while avoiding actions that could be perceived as provocative, is essential for garnering international support. Strengthening cybersecurity defenses and enhancing resilience against economic coercion are also critical. Diplomatically, Taiwan should continue to engage with like-minded democracies to build a broad coalition that supports peace and stability in the Taiwan Strait, while also advocating for the timely fulfillment of agreed-upon arms sales. The international community, particularly the U.S., should maintain clear and consistent messaging on its commitment to Taiwan's security, ensuring that any diplomatic engagements with Beijing do not inadvertently undermine Taiwan's defense posture.

Sources

• visiontimes.com
• onedecision.com
• straitstimes.com
• evrimagaci.org
• militarnyi.com
• straitstimes.com
• ocac.gov.tw
• taipeitimes.com
• nhregister.com
• taiwannews.com.tw
• ifri.org
• understandingwar.org
• caliber.az
• globaltaiwan.org
• channelnewsasia.com
• abs-cbn.com
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• asiatimes.com