By Jonathan Harman

    The Taiwan PLUS Act would streamline US arms sales to Taiwan, boosting deterrence against China while strengthening the US defense industrial base through increased demand and faster foreign military sales approvals.

    On May 21st, Senator Rick Scott (R-FL) and Representative Scott Perry (R-PA) introduced the “Taiwan PLUS Act,” a bill seeking to streamline arms sales to Taiwan. If this bill becomes law, it will cut arms sale approval times to Taiwan in half and increase the financial thresholds that require Congressional review. As one of the United States’ biggest weapons customers, removing regulations would enable Taiwan to make more purchases and provide greater sustained demand to build up the US defense industrial base, especially in critical emerging technologies.

    The “Taiwan PLUS Act” seeks to make Taiwan a “NATO Plus” country, an unofficial group of NATO-friendly states, including Australia, New Zealand, Japan, Israel, and South Korea, that enjoy accelerated foreign military sales (FMS) approval times with fewer requirements for Congressional approval.

    What Is the Taiwan PLUS Act?

    With Chinese aggression in the Taiwan Strait continuing to escalate, the United States must streamline bureaucratic barriers to Taiwanese arms sales.

    The FMS approval process is notoriously slow. For most countries, it takes 45 to 150 days to complete. This does not include the time it takes for the customer to assess its own needs, share technical information with the US government, prepare a former Letter of Request (LOR), and for the US government to assess the overall cost.

    However, one of the longest parts of the FMS approval process is the 30-day Congressional review period, which works differently for NATO Plus countries.

    As it currently stands, Taiwan must undergo the same review process as every other country for weapon sales beyond specific price points. These price points are $14 million for major defense equipment, $50 million for defense services, and $200 million for construction support, which Taiwan often exceeds.

    To lessen the number of cases that require Congressional approval, the “Taiwan PLUS Act” increases the price points to $25 million, $100 million, and $300 million, respectively. For any sales exceeding those thresholds, the act cuts the review time from 30 to 15 days, giving Taiwan the same price points and timeframes as other NATO Plus countries.

    Why Are Foreign Military Sales so Inefficient?

    The slow FMS process is endemic and disincentivizes US partners from purchasing American weapons, leading some customers to begin signing contracts with US adversaries like China with faster turnaround times.

    To fix this issue, the federal government has sought to streamline the FMS process for several years with limited success.

    In 2023, the State Department, which works jointly with the Department of Defense (DoD) in FMS, worked to trim the fat in its internal processes. Most notably, the State Department began a policy that prioritized approving customers based on US national security interests. According to the State Department, this, combined with mandatory shorter approval times, shrunk delivery times to priority countries by up to two years.

    However, US FMS remains excruciatingly slow.

    In May, Secretary of State Marco Rubio called for additional FMS reforms to alleviate the continued delays, stating, “We get so many complaints… Every bilateral engagement we have is someone complaining about some sale or even a financing deal that has been in place for five years and has not yet been delivered or has not yet been approved through the process.”

    Taiwan is not immune to the clog, and with China upping its military activity in the Taiwan Strait, the US government needs to find ways to ensure faster delivery times to Taiwan. Making Taiwan a NATO Plus state to speed up the approval process would be a good start.

    Policymakers have previously advocated designating Taiwan a NATO Plus country. Representative Perry first introduced the Taiwan PLUS Act in 2021. While the bill was essentially the same as the current iteration, the 2021 version was never put up to a vote.

    However, the security situation in the Taiwan Strait has deteriorated dramatically since 2021, and policymakers on both sides of the aisle appear more willing to consider such legislation. A week before the current Taiwan PLUS Act was introduced, Senators Pete Ricketts (R-NE) and Chris Coons (D-DE) jointly introduced a nearly identical bill titled, the “Providing Our Regional Companions Upgraded Protection in Nefarious Environments (PORCUPINE) Act.”

    Like the Taiwan PLUS Act, this bill would designate Taiwan as a NATO Plus country with lower Congressional approval times and higher price thresholds for Congressional review.

    How Will the Taiwan PLUS Act Affect the US Defense Industrial Base?

    Better facilitating Taiwanese arms sales will also help rebuild the US defense industrial base. Currently, the United States struggles to fulfill major FMS orders promptly with contractors, requiring upwards of seven years to complete significant arms sales in some cases.

    Why the long wait?

    Beginning in the 1990s, the US government considerably scaled down its defense industrial capacity to reflect the lack of significant power security threats after the Soviet Union collapsed. Combined with the US and allied focus on smaller-scale conflicts in the Middle East, this caused the US defense industrial base to atrophy.

    The US government has implemented multiple policies to rebuild American defense manufacturing capacity, including invoking Title III of the Defense Production Act in specific strategic industries. While helpful, the main factor that will expand capacity is sustained demand, something Taiwan, which faces the constant threat of invasion, can provide.

    Taiwan is one of the US government’s largest customers. For the past 75 years, Taiwan has tied Japan as America’s third-largest weapons customer, with Taiwan being the largest US customer in fiscal year 2020.

    Because Taiwan is a major buyer, streamlining the FMS process will encourage Taiwan to place more orders and provide greater sustained demand to the US defense industrial base. Increased demand will incentivize defense manufacturers to expand capacity to meet America’s evolving national security challenges.

    What’s more, Taiwan’s recent shift to prioritize procuring weapons better suited to asymmetric warfare provides the United States with an opportunity to expand production in emerging technologies like unmanned aerial vehicles (UAVs), something that has already begun to play out.

    While the Ukraine war has been the most visible driver in expanding US drone manufacturing, Taiwanese orders have significantly increased demand.

    Last November, Taiwan’s Ministry of National Defense (MND) finalized an FMS order for over 1,000 attack drones, a departure from the usual big-ticket items like F-16s or M1 Abrams tanks. The sale totaled about $360.2 million, including 291 ALTIUS 600 M-V UAVs and 720 Switchblade 300 loitering munitions.

    With the increased demand, American drone manufacturers have rapidly increased their capacity. Within the last year alone, AeroVironment and Anduril, which produce the Switchblade and ALTIUS drones, announced plans to expand production rapidly.

    Such buildups greatly benefit the US economy.

    In January, Anduril announced it would build a hyperscale manufacturing plant in Columbus, Ohio, bringing 4,000 jobs to the state, a state record for an individual plant.

    If the United States hopes to build up deterrence in the Taiwan Strait, it will need to ramp up arms sales to Taiwan. Passing the Taiwan PLUS Act would be a smart move. Easing regulations on Taiwanese weapons purchases will likely increase the number of FMS orders and signal greater long-term demand to build up US defense industrial capacity, especially in industries more pertinent to the modern battlefield.

    Such a move would be a good first step towards improving both countries’ defense readiness.