Washington Freezes KMT Chair Cheng Li-wun Out Over Taiwan Defense Budget Fight

Kuomintang Chairwoman Cheng Li-wun completed the Washington leg of a two-week, multi-city U.S. visit this month and found the capital largely closed to her. [POLITICO] Sources familiar with her itinerary said she failed to secure meetings with most of the congressional offices she approached, and a scheduled session with National Security Council staff was canceled before it took place. [POLITICO]^[1] The episode reflects a broader U.S. government calculation: that Cheng's role in cutting Taiwan President Lai Ching-te's proposed emergency defense budget, combined with her April meeting with Chinese President Xi Jinping, has made her a diplomatic liability rather than a constructive interlocutor.

The backdrop is a months-long impasse over Taiwan's supplemental defense budget. In late November 2025, Taiwan's Executive Yuan proposed a NT$1.25 trillion, approximately $40 billion, supplemental defense budget to strengthen defense resilience and asymmetric combat capacity. President Lai announced his intention to increase defense spending to 3.3 percent of GDP in 2026 and toward 5 percent by 2030, proposing the special budget to fund advanced U.S. weapons systems, investment in Taiwan's defense industry, and development of an integrated air defense network he called "T-Dome." The KMT and its legislative partner, the Taiwan People's Party, together control the 113-seat Legislative Yuan and blocked the full package for months. Cheng personally pushed for a far lower initial allocation, drawing criticism from within and outside her party, before senior KMT lawmakers ultimately demanded a higher figure as U.S. pressure intensified.

The legislature resolved the impasse in early May. Taiwan's parliament passed a NT$780 billion, approximately $25 billion, supplementary defense budget in a 59-0 vote, pared back by roughly a third from the Lai administration's request. The revised budget focuses exclusively on the purchase of U.S. weapons systems and removes funding for domestic asymmetric defense programs. The final figure is less than the NT$1.25 trillion Lai sought but more than the NT$380 billion the KMT had initially proposed. U.S. officials were not satisfied. According to POLITICO, NSC staff were frustrated that Cheng had "gutted" a special budget on which the U.S. government had conducted extensive consultations. A separate source told POLITICO that State Department officials remained angry at Cheng's conduct throughout the standoff. [POLITICO] One Washington-based reporter characterized the eight-year budget as the product of Taiwan-U.S. negotiations, and said Cheng's description of the package as a "blank check" and her accusations of DPP corruption had upset U.S. national security and military communities.

Cheng's April visit to Beijing added a separate complication. She led a KMT delegation from April 7 to 12, conducting meetings in Shanghai, Nanjing, and Beijing, including a session with CCP General Secretary Xi Jinping. She was the first KMT chairperson to lead a delegation to mainland China in a decade. The visit produced immediate backlash in Washington. During her U.S. tour, Cheng publicly described Xi in complimentary terms and, according to POLITICO, met with individuals linked to Chinese Communist Party influence operations. [POLITICO] She also faced allegations, which she relayed to reporters in Washington, that she "speaks on behalf of Xi Jinping and represents the Chinese Communist Party." [POLITICO] NSC staff cited a further procedural grievance: per POLITICO, they concluded that the KMT had leaked the names of officials Cheng was scheduled to meet with to the Financial Times ahead of the session, which they described as a precondition violation that independently disqualified the meeting. [POLITICO]

The scheduled NSC meeting was canceled abruptly, and prior to the cancellation the venue had already been downgraded from the White House to the American Institute in Taiwan's Washington headquarters. The officials Cheng was set to meet were also of a lower rank than those who had received a Taichung mayor during her visit earlier in the year. The White House and State Department declined to comment on whether any administration officials met with Cheng. [POLITICO] Cheng told reporters she had met with administration officials but said she was "not in a position to disclose" their identities. [POLITICO]

On Capitol Hill, results were limited but not uniformly negative. Nine lawmakers met with Cheng, according to POLITICO, including Sen. Dan Sullivan of Alaska and Reps. Don Bacon of Nebraska, Young Kim of California, and Tom Suozzi of New York. Sullivan publicly urged Cheng to work with Lai's Democratic Progressive Party to complete the defense budget. Bacon's office issued a statement calling the KMT's trajectory on defense "moving in the right direction." [POLITICO] In February, a bipartisan group of 37 U.S. lawmakers had sent a letter to senior Taiwanese politicians expressing concern about Taiwan's inability to pass the $40 billion special defense budget. That letter, combined with the administration's ongoing frustration, formed the political environment Cheng entered during her visit.

The episode fits a broader pattern in U.S.-Taiwan policy under the Trump administration. President Trump has long pressed U.S. allies to increase their own defense spending, and his nominee for undersecretary of defense for policy, Elbridge Colby, reaffirmed during his Senate confirmation hearing that Taiwan should spend 10 percent of GDP on defense given the threat from China. American Institute in Taiwan Director Raymond Greene separately told reporters in May that many U.S. lawmakers and scholars were interested in asking Cheng whether the KMT leadership "is fundamentally changing the party's political orientation." The administration's decision to publicly, if implicitly, signal disapproval of an opposition party leader from a non-treaty partner carries its own diplomatic calculus, one that may complicate the KMT's ability to engage Washington if and when it returns to executive power in Taiwan.