TW-C-09: The Lai Ching-te Presidency Year Two — Divided-Government Stability, the Post-Great Recall Aftermath, the FY2026 Budget Battle and 3-Per-Cent-of-GDP Defence-Spending Question, the Hsiao Bi-khim Vice-Presidential Role, and the Trump-2 US-Taiwan Trade-Negotiating-Track Continuation (May 2025 – May 2026)

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1. Key Takeaways

Lai Ching-te (賴清德) entered the second year of his presidency on 20 May 2025 under structural conditions essentially unchanged from his first-anniversary moment: a Democratic Progressive Party (DPP) executive operating without a Legislative Yuan (LY) majority, facing a Kuomintang-Taiwan-People's-Party (KMT-TPP) plus-two-non-partisan working coalition of 62 of 113 seats, and managing in parallel a sustained cross-Strait pressure track and a Trump-2 transactional-deterrence US relationship. The Year One sequence anchored at TW-D-02 — the May 2024 inaugural and the Joint Sword 2024A exercises (23–24 May 2024); the May–October 2024 Guohui Gaige (國會改革) constitutional contest concluded by Constitutional Judgment No. 9 of 2024 (113年憲判字第9號) on 25 October 2024; the December 2024 Constitutional Court Procedure Act amendment producing the eight-Justice-bench paralysis; the January 2025 NT$200-billion-plus FY2025 budget cuts; the 13 March 2025 Foreign Hostile Force (境外敵對勢力) designation and the Ten Measures (十項措施) package; the 28 March 2025 Constitutional Judgment No. 2 of 2025 partial-strike-down restoring operative court functionality — defined the structural baseline against which Year Two unfolded. The Year Two thesis articulated across this document is that the period was characterised by an unsought-but-substantively-achieved divided-government stability equilibrium: confrontation continued at high tempo on legislative, constitutional, fiscal, and informational tracks, but no track produced a structural rupture, and the Lai administration's strategic-trajectory commitments — defence-spending escalation, cross-Strait resilience build-out, US-Taiwan transactional engagement, and Republic of China Taiwan identity consolidation — proceeded operationally despite the legislative blockade.
The May–August 2025 Great Recall (大罷免, Da Bamian) civil-society campaign, which had appeared during its stage-one and stage-two petition-mobilisation phases to be the principal candidate-event for restoring an operative DPP-or-coordination working majority in the LY, concluded with substantially weaker stage-three vote-day outcomes than the petition phases had foreshadowed. The 26 July 2025 first-tranche vote-day covered approximately twenty-four KMT legislators across constituencies primarily in Taipei, New Taipei, Taoyuan, Hsinchu, Taichung, and a small number of additional districts; the 23 August 2025 second-tranche vote-day covered an additional cohort across the remaining stage-two-petition-completed constituencies [TBD-VERIFY exact tranche-by-tranche vote-day dates and constituency rosters — published reporting through Liberty Times, China Times, United Daily News, and Focus Taiwan in the 27–28 July and 24–25 August 2025 windows should be referenced for the final tranche-by-tranche constituency lists and vote-share outcomes]. Both vote-day sequences required the operative 25-per-cent-turnout-floor and majority-yes thresholds under the Public Officials Election and Recall Act (公職人員選舉罷免法); the actual vote-day results showed that the great majority of targeted recalls failed at one or both thresholds, with only a small minority — concentrated in the most-clearly DPP-leaning constituencies that had elected KMT legislators under specific 2024-election-cycle conditions — passing both thresholds. The post-recall LY arithmetic therefore continued the KMT-TPP working-majority configuration through May 2026, and the structural reading articulated by Shelley Rigger, Kharis Templeman, and Lev Nachman positioned the gap between activist civil-society stage-one-and-stage-two mobilisation capacity and broader electoral-coalition stage-three mobilisation capacity within KMT-dominant constituencies as the principal explanatory variable.
The post-recall constitutional-procedural impasse — the LY's continuing KMT-TPP-led refusal to confirm Lai's renominations to the Constitutional Court Justice vacancies — has continued through 2025 and into 2026, sustaining the eight-sitting-Justice constitutional-court configuration that the 28 March 2025 Constitutional Judgment No. 2 of 2025 partial-strike-down of the Constitutional Court Procedure Act amendment restored to operative functionality. The Lai government's renominations across the post-March 2025 window — including renominated and partially-revised candidate slates submitted across mid-2025 and early-2026 [TBD-VERIFY exact renomination dates, the named-candidate rosters, and the LY-vote-confirmation outcomes for each tranche] — have produced sustained LY non-confirmation outcomes. The operative consequence has been that constitutional-court adjudication of contested LY-passed legislation has continued at the eight-Justice bench, with the Judgment No. 2 of 2025 unblocking of operative functionality permitting limited but constrained constitutional review. The KMT-TPP-articulated position has continued to be that Lai's renominations have failed to address LY-articulated concerns about ideological balance and judicial-independence credentials of named nominees, with particular emphasis on whether nominees have prior DPP-affiliation or have publicly articulated political positions deemed by the LY caucuses to compromise judicial independence; the DPP-Executive-Yuan position has continued to be that the LY's non-confirmation pattern constitutes deliberate constitutional-disablement of a co-equal branch under cover of credential-objection framings.
The October 2025 Kuomintang chairmanship-election — selecting Eric Chu's (朱立倫) successor for the chair term commencing in the post-October handover window — produced the most consequential KMT party-internal succession of the post-2020 era and reoriented the post-Chu KMT toward a sharply elevated 2026-and-2028 strategic-positioning posture. The 2025 KMT chairmanship-election candidate roster — including Hau Lung-pin (郝龍斌, former Taipei Mayor and KMT Vice-Chairman), Cheng Li-wen (鄭麗文, KMT legislator and party-television-personality), Lo Chih-chiang (羅智強, KMT legislator and party-strategist), Sean Lien (連勝文, son of former KMT Chairman Lien Chan and 2014 Taipei-mayoral candidate), and Chang Ya-chung (張亞中, NTU professor and 2021 chair-election runner-up) [TBD-VERIFY exact October 2025 chair-election candidate roster, the final vote-share results, and the chair-handover date — the prevailing reporting through late-October 2025 across Liberty Times, China Times, United Daily News, and Focus Taiwan should be referenced for the definitive table] — competed across a roughly three-month campaigning window through the formal-party-membership vote-day. The new chair's institutional priorities have centred on the November 2026 Nine-in-One election candidate-recruitment cycle (particularly the Taipei, Taichung, Taoyuan, New Taipei, and Kaohsiung mayoral races), the post-recall LY caucus discipline architecture under caucus convener Fu Kun-chi (傅崐萁), the early 2028 presidential-primary framework, and the KMT-internal cross-Strait-engagement-legacy-versus-cross-Strait-pragmatism balancing. Eric Chu's outgoing chair-tenure record (March 2021 – October 2025) included the 2022 Nine-in-One mayoral victories, the 2024 election presidential-and-LY-coordination architecture (with Hou You-yi as presidential nominee), the post-2024 KMT-TPP legislative coordination including the May 2024 reform-amendment passage and the January 2025 budget-cut sequence, and the 2025 recall-campaign defensive coordination.
The September–December 2025 FY2026 Central-Government-Budget cycle proceeded under the post-recall KMT-TPP working-majority configuration and concluded with budget reductions and freezes more modest than the January 2025 FY2025 sequence, reflecting both the post-recall political environment and the post-March 2025 cross-Strait-resilience-budget commitments. The Executive Yuan budget submission — transmitted to the LY in early-to-mid September 2025 [TBD-VERIFY exact submission date] under the Budget Act (預算法) framework — proposed total expenditures in the range of NT$3.2–3.4 trillion [TBD-VERIFY exact proposed total], with major-programme allocations across defence (a proposed NT$949 billion or thereabouts [TBD-VERIFY exact MND-line proposal, treated in detail at TW-D-06 and TW-F-04]), social welfare and pension, education, infrastructure, and discretionary categories. The September–December 2025 LY deliberation cycle proceeded under conditions sharply distinct from the January 2025 FY2025 sequence: the post-recall LY arithmetic continued the KMT-TPP-plus-two-non-partisan working-majority structure, but the post-October 2025 KMT chair-tenure produced a more-moderated cuts-framing relative to the January 2025 round. The third-reading passage in late December 2025 [TBD-VERIFY exact third-reading-passage date] produced an aggregate reduction substantially below the January 2025 NT$200-billion-plus aggregate, and the operative FY2026 fiscal year opened 1 January 2026 with the defence-budget tranche substantially preserved.
The defence-spending-to-GDP-ratio trajectory has emerged as the central strategic-and-fiscal axis of the Lai administration's Year Two, with the Trump-2 administration's public-statement demand-range spanning 3 per cent, 5 per cent, and (in some statements) 10 per cent of GDP, against an FY2025 operative baseline of approximately 2.45 per cent and a proposed FY2026 budget moving the ratio above 3 per cent. The proposed FY2026 defence budget of approximately NT$949 billion against projected FY2026 GDP of approximately NT$28–29 trillion would produce a ratio of approximately 3.3–3.4 per cent [TBD-VERIFY exact FY2026 defence-spending-to-GDP ratio — the exact ratio depends on the GDP-deflator assumption and on whether National Chung-Shan Institute of Science and Technology (NCSIST, 國家中山科學研究院) funding, the special-budget tranches outside the General Budget, and Coast Guard expenditures are included in the numerator]. The Trump-2 administration's defence-spending demand has been articulated through statements by Secretary of Defense, Senate Foreign Relations Committee members, and President Donald Trump himself across the first eighteen months of the Trump-2 administration; the publicly reported demand-range has varied across 3 per cent (the most-frequently-referenced figure), 5 per cent (the Trump-articulated figure in several public-statement contexts), and 10 per cent (the Trump-articulated figure in at least one widely reported statement in 2025) [TBD-VERIFY exact statement chronology and figure references]. The Cho Jung-tai (卓榮泰) Executive Yuan position has been to advance the defence-spending trajectory progressively toward 3 per cent through the FY2026 and FY2027 budget cycles while resisting the higher Trump-2-articulated targets on fiscal-sustainability and operational-absorptive-capacity grounds; the Hudson Institute hawk position (Seth Cropsey, Iskander Rehman) has argued that even 3 per cent is insufficient given the post-2027 Davidson Window conflict-risk assessment; the Ministry of Finance fiscal-orthodox position has emphasised sovereign-debt sustainability constraints absent compensating revenue-raising measures.
Vice President Hsiao Bi-khim (蕭美琴) — Taiwan's former Representative to the United States (2020–2023), Lai's running-mate on the 13 January 2024 ticket, and the post-20 May 2024 Vice President — operationalised across Year Two a substantive Vice-Presidential portfolio anchored in international diplomacy, cross-Strait resilience, and 2028-presidential-trajectory positioning, exceeding in operational substance the typical post-democratisation Vice-Presidential remit. Hsiao's pre-Vice-Presidential career architecture — three terms as DPP-list legislator (2002–2008 and 2012–2020), Taiwan Representative to the United States (July 2020 – November 2023, the longest US-Representative tenure in the post-1979 unofficial-relations era), and post-November 2023 vice-presidential nominee — provides the institutional baseline for her post-2024 portfolio. Across Year Two she has co-chaired (with Premier Cho Jung-tai) the Whole-of-Society Defence Resilience Committee (全社會防衛韌性委員會) operationalisation, has led second-track diplomacy with the Trump-2 administration through her established Washington network including the post-2025 transition-period interactions with Secretary of State, US Trade Representative, and National Security Council interlocutors, and has executed the post-2025 European-and-Indo-Pacific bilateral-track engagements including [TBD-VERIFY specific 2025–2026 Hsiao-led international engagement chronology — published reporting through MOFA, Office of the President, and the Liberty Times / Taipei Times / Focus Taiwan archive should be referenced]. The 2028-positioning analytical reading by Wen-Ti Sung, Lev Nachman, and Kharis Templeman has consistently identified Hsiao as the structurally-most-positioned DPP 2028 presidential-candidate-track figure, with the Vice-Presidency-to-presidential succession trajectory consistent with Lai's own 2024 ascension from the Tsai-Lai Vice-Presidency.
The post-Trump-2 US-Taiwan trade-negotiating architecture has continued through Year Two as a sustained multi-track engagement under Vice Premier Cheng Li-chiun (鄭麗君) and the Office of Trade Negotiations (OTN, 行政院經貿談判辦公室), with the 2 April 2025 reciprocal-tariff regime, the 9 April 2025 ninety-day pause, the Section 232 semiconductor investigation, and the parallel TSMC Arizona-Kumamoto-Dresden expansion-narrative providing the principal negotiating-track inputs. The 2 April 2025 "Liberation Day" tariff announcement initially placed a 32-per-cent reciprocal-tariff rate on Taiwan-origin goods exports to the US; the 9 April 2025 ninety-day pause was followed by extension cycles and continuing USTR-Taiwan negotiating-team activity led on the Taiwan side by Vice Premier Cheng Li-chiun in her Office of Trade Negotiations lead role and Minister of Economic Affairs Kuo Jyh-huei (郭智輝) [TBD-VERIFY exact tenure status of Kuo through May 2026]. The Section 232 semiconductor investigation, initiated under the Trump-2 administration's Department of Commerce framework, has produced findings [TBD-VERIFY exact Section 232 report-publication date and findings] and has operated as the proximate basis for any semiconductor-specific tariff actions under the Trump-2 architecture. The TSMC Arizona-Kumamoto-Dresden expansion narrative — operationalised through TSMC's progressive build-out of fabrication facilities in Arizona (the Phoenix campus with multiple-fab-phase architecture), Kumamoto (the Japan ASML-and-Sony-co-investment fab), and Dresden (the European Semiconductor Manufacturing Company joint-venture under construction) — has been treated by both the Trump-2 administration and the Lai administration as the principal procurement-offer-and-strategic-positioning architecture for the post-2025 US-Taiwan economic relationship (treated in detail at TW-D-03 and TW-G-01).
The cross-Strait pressure architecture under Year Two has continued the post-2022 People's Liberation Army (PLA) grey-zone pressure pattern at progressively elevated tempo, with the Strait Thunder-2025A exercise of April 2025 and the Strait Thunder-2025B exercise of later 2025 [TBD-VERIFY exact exercise designations and dates — the published AMTI and CSIS exercise-mapping archive should be referenced] together producing the most-intensive PLA exercise tempo of the post-2022-Pelosi-visit era. PLA grey-zone activity through Year Two has included continuing median-line crossings by PLA Navy and PLA Air Force assets at elevated tempo relative to the 2023–2024 baseline; continuing China Coast Guard activity around Kinmen, Matsu, and Pratas (the post-February 2024 Kinmen boat-capsize-incident aftermath continuation); the post-March 2025 Strait Thunder-2025A exercise and the later 2025 Strait Thunder-2025B exercise including blockade-rehearsal and decapitation-rehearsal exercise components reported by the International Institute for Strategic Studies (IISS), CSIS, and the ROC Ministry of National Defence (MND); and the post-2025 subsea-cable incidents including post-February 2025 cable-cut incidents in the Penghu, Pratas, and Taishi cable-system zones [TBD-VERIFY exact post-2025 subsea-cable incident chronology]. The post-March 2025 Ten Measures operationalisation has continued through Year Two across cross-Strait people-flow restrictions on PRC entertainers and influencers, cross-Strait exchange-programme scrutiny, restored military-court jurisdiction in espionage cases, PRC-citizenship-renunciation enforcement, and subsea-cable infrastructure-protection upgrades.
The Lai cabinet under Premier Cho Jung-tai (卓榮泰) has undergone selective reshuffles across the late-2025 and early-2026 windows, with continuing premiership of Cho through the May 2026 cut-off and selective portfolio reshuffles particularly in the cabinet-internal coordination, finance, and trade-negotiation tracks reflecting the Trump-2 tariff-negotiating-track operational priorities. Premier Cho Jung-tai's continuing premiership has reflected Lai's strategic-political calculation that mid-term premier-replacement under continuing KMT-TPP working-majority LY would invite the LY to refuse Premier-confirmation ratifications or to push for politically-costly cabinet-restructuring concessions [the Premier under the ROC constitutional framework is appointed by the President without requiring LY confirmation, but operational-political relations with the LY remain conditioning]. Substantive ministerial-portfolio configurations through late-2025 and early-2026 have included: Vice Premier Cheng Li-chiun (鄭麗君) in the Trump-2 tariff-negotiating-track lead role and the Office of Trade Negotiations institutional lead; Minister of Foreign Affairs Lin Chia-lung (林佳龍) continuing through the post-2025 US-Taiwan diplomatic track and the Holy See and 12-or-13-formal-diplomatic-ally roster preservation track; Minister of National Defence Wellington Koo (顧立雄) — the first civilian Defence Minister in approximately fourteen years — continuing through the post-2025 arms-transfer cycle and the Whole-of-Society Defence Resilience Committee operationalisation; Minister of Mainland Affairs Council Chiu Chui-cheng (邱垂正) continuing the post-March 2025 Foreign Hostile Force-designation operationalisation; Minister of Finance Chuang Tsui-yun (莊翠雲) continuing through the 2026 Central Government Budget submission; and Minister of Economic Affairs Kuo Jyh-huei (郭智輝) [TBD-VERIFY exact tenure status of Kuo through May 2026].
The Taiwan People's Party (TPP) under Chairman Huang Kuo-chang (黃國昌) has continued through Year Two the legislative-confrontation tactical posture established in late 2024 and early 2025, with the Ko Wen-je (柯文哲) Taipei District Court trial proceedings — opened in early 2025 — producing sustained party-internal-and-public-attention drag on the TPP's polling-share trajectory. Ko Wen-je's August 2024 detention by the Taipei District Prosecutors Office on charges related to the Core Pacific City case (京華城案) and the political-donations case, the 26 December 2024 indictment, and the subsequent extended pre-trial detention generated continuing media attention through 2025–2026; the Taipei District Court proceedings opened in early 2025 with sustained witness-examination, prosecution-and-defence cross-examination, and procedural-motion cycles and have not concluded through May 2026 [TBD-VERIFY exact post-2025 trial-progress milestones; the Taipei District Court reporting indicates that the trial has remained in evidence-examination phase through Q1 2026 with no first-instance verdict yet rendered]. Huang Kuo-chang's chairmanship-tenure (commenced January 2025 [TBD-VERIFY exact accession date]) has continued the legislative-confrontation tactical pattern; the TPP's 2024-election 26-per-cent presidential-and-LY combined vote-share base has eroded across 2025–2026 to approximately 10–15 per cent in the TPOF (Taiwanese Public Opinion Foundation), TVBS, ETtoday, and My-Formosa monthly tracking polls [TBD-VERIFY exact polling-share evolution]. The 2026 Nine-in-One candidate-recruitment cycle for the TPP has faced the structural difficulty that the party lacks an established local-government cadre comparable to KMT and DPP equivalents.
The Lai Ching-te approval-rating trajectory across Year Two stabilised in the 35–45-per-cent satisfaction range across TPOF, TVBS, ETtoday, My-Formosa, and TISR (Taiwan Indicators Survey Research) monthly tracking polls [TBD-VERIFY exact monthly-tracking-poll readings], reflecting both the post-recall political-environment-baseline and the post-March 2025 cross-Strait-resilience-architecture operational delivery. The Lai approval trajectory moved through three distinguishable phases across the May 2024 – May 2026 window: (a) a post-inaugural elevated-approval phase across May–October 2024 in the 50-per-cent satisfaction range, reflecting honeymoon-period dynamics and the cross-Strait-stability bonus from the 20 May 2024 inaugural; (b) a post-October-2024-constitutional-court-paralysis-and-January-2025-budget-cut decline phase across November 2024 – March 2025 in the 35–40-per-cent range; (c) a post-March-2025-Foreign-Hostile-Force-designation-and-post-recall stabilisation phase across April 2025 – May 2026 in the 38–45-per-cent range. The 2026 Nine-in-One local elections scheduled for 21 November 2026 constitute the next institutional inflection point for the Lai approval-rating trajectory and the broader DPP mid-term electoral positioning.
The structural-political reading of the Lai-Ching-te Year Two — articulated across three analytical accounts in the academic and policy literature — is that the period produced a sustained-divided-government equilibrium rather than a structural realignment, with the operative variables of the November 2026 Nine-in-One election cycle, the FY2027 budget cycle, the Trump-2 negotiating-track outcomes, and the cross-Strait pressure trajectory as the principal forward-trajectory determinants. Account (a), the DPP / civil-society democratic-resilience account, positions Year Two as evidence that the post-2000 alternation pattern has produced an institutional framework capable of absorbing sustained KMT-TPP-working-majority pressure, sustained cross-Strait pressure, and sustained Trump-2 transactional pressure without structural rupture, with the post-recall constitutional-impasse continuation, the FY2026 budget-passage outcome, and the cross-Strait-resilience-architecture operationalisation together demonstrating institutional resilience. Account (b), the KMT-TPP institutional-balance-and-cross-Strait-pragmatism account, positions the same record as evidence that the LY's constitutional-supervision authority over executive power has been legitimately exercised, that the failed Great Recall validated the post-2024 KMT-TPP working coalition's electoral standing, and that the post-October 2025 KMT chair-tenure renewal has positioned the party for 2026 Nine-in-One competitive recovery. Account (c), the non-partisan-academic structural-reading account, positions the post-2024 architecture as a stress-test of post-2000-alternation institutional resilience under conditions of sustained external-and-internal pressure, with the Year Two equilibrium as the analytical baseline for the November 2026 election cycle and the broader 2026–2028 trajectory. The integrative assessment positions Year Two as a sustained-equilibrium configuration rather than a realignment, with the November 2026 Nine-in-One election cycle as the next confirmable inflection point.

2. The Year-One-to-Year-Two Inflection — 20 May 2025 First Anniversary and the Inherited Structural Configuration

2.1 The first-anniversary press-conference framework and the Lai-government Year One retrospective

The Lai Ching-te (賴清德) administration marked the 20 May 2025 first anniversary of the inauguration through a sequence of official communications and press engagements operationalising the Year-One-to-Year-Two transition. The principal first-anniversary press conference, convened at the Office of the President (中華民國總統府) in Taipei, articulated the Lai-government Year One retrospective across the established three-pillar framework first articulated in the 8 January 2025 Lai Three Pillars (賴清德三支柱) address: (a) the democratic-resilience pillar, encompassing the post-October 2024 constitutional-court rulings, the January 2025 budget-cut response, the post-March 2025 Foreign Hostile Force (境外敵對勢力) designation, and the post-recall constitutional-procedural position; (b) the cross-Strait-resilience pillar, encompassing the post-Joint-Sword-2024A/B deterrence-and-resilience architecture, the Whole-of-Society Defence Resilience Committee (全社會防衛韌性委員會) operationalisation, and the post-March 2025 Ten Measures (十項措施) implementation; and (c) the international-engagement pillar, encompassing the post-Trump-2 US-Taiwan transactional architecture, the post-2024 Hsiao Bi-khim (蕭美琴) Vice-Presidential international portfolio, and the post-2024 European-and-Indo-Pacific bilateral-track architecture.

The Year One retrospective framing positioned the period's structural confrontation across legislative, constitutional, fiscal, and informational tracks as both an operating constraint and a validation point: the persistence of the post-March 2025 Ten Measures package, the post-recall continuation of the Justice-nomination renomination process, the post-April 2025 USTR negotiating-track engagement, and the sustained post-Joint-Sword-2024B grey-zone-pressure-response architecture together demonstrating (in the Lai-government framing) the operational viability of a minority-government executive operating under sustained legislative-majority obstruction. The KMT and TPP counter-framings — articulated through KMT Chairman Eric Chu (朱立倫) statements through to the October 2025 chair-handover, through KMT caucus convener Fu Kun-chi (傅崐萁) press engagements, and through TPP Chairman Huang Kuo-chang (黃國昌) statements — positioned the same Year One record as evidence that the Lai government had refused to accept the legitimacy of the LY working majority's constitutional-supervision authority and had operationally bypassed normal legislative-deliberation processes in the post-March 2025 Ten Measures and the post-2025 Justice-nomination procedure.

2.2 The inherited LY arithmetic and the structural baseline for Year Two

The 20 May 2025 LY arithmetic baseline — the configuration Lai inherited at the close of Year One and at the opening of Year Two — was substantially unchanged from the 1 February 2024 Speaker-election baseline. The 113-seat LY composition continued at: KMT 52 seats; DPP 51 seats; TPP 8 seats; non-partisan 2 seats (Chen Chao-ming 陳超明 and May Chin / Kao Chin Su-mei 高金素梅, both indigenous-constituency winners caucusing with the KMT), producing a KMT 54-seat working bloc and a KMT-TPP-plus-non-partisan 62-seat working coalition against the DPP 51-seat single-party bloc. The majority threshold in the 113-seat chamber is 57; the KMT-TPP-plus-non-partisan working coalition therefore commanded a five-seat margin above the majority threshold. The Speaker continued at Han Kuo-yu (韓國瑜, KMT), elected 1 February 2024; the Vice Speaker continued at Johnny Chiang (江啟臣, KMT).

The structural feature of the inherited Year Two LY arithmetic — articulated by Wen-Ti Sung (Atlantic Council) across multiple post-2024 commentaries as the "kingmaker without a kingdom" position — is that the TPP's eight legislators, all elected through the at-large party-list proportional-representation track rather than constituency-district seats, held the median-vote position in every contested motion. Any DPP-led initiative requiring LY majority support required securing all 51 DPP votes plus a minimum of six TPP defections (a structurally improbable outcome given Huang Kuo-chang's chairmanship-positioning); any KMT-led initiative requiring LY majority support required securing the KMT 54-seat working bloc plus a minimum of three TPP votes (a structurally feasible outcome that had been demonstrated across the May 2024 Guohui Gaige legislative-reform passage, the December 2024 Constitutional Court Procedure Act amendment, and the January 2025 FY2025 budget-cut sequence). The post-recall continuation of this arithmetic into Year Two operated as the principal constraint within which every Lai-government policy initiative across legislation, budget, personnel-confirmation, and constitutional-court-procedure tracks was negotiated.

2.3 The post-March 2025 Ten Measures operational status at the Year-One-to-Year-Two boundary

The 13 March 2025 Lai Foreign Hostile Force (境外敵對勢力) designation under Article 2(4) of the Anti-Infiltration Act (反滲透法) framework and the associated Ten Measures (十項措施) implementation package — anchored in the Year One coverage at TW-D-04 — were at the Year-One-to-Year-Two boundary in active operational implementation across the inter-ministerial coordination framework. The operational status as of 20 May 2025 included: (a) the restoration of the military court system jurisdiction over active-duty service members in espionage cases; (b) the PRC-entertainer and PRC-influencer due-diligence requirements for cross-Strait creative-industry engagements; (c) the PRC-affinity-programme scrutiny in primary, secondary, and tertiary educational institutions including cross-Strait exchange programmes; (d) the PRC-citizenship-renunciation enforcement requiring naturalised ROC citizens of PRC origin to renounce PRC household-registration documentation; (e) the reinforced PRC-naval and PRC-fishing-vessel monitoring in the Strait and around Kinmen, Matsu, Penghu, and Pratas; (f) the restored loyalty-oath requirements for retired military personnel travelling to the PRC; (g) the cross-Strait economic-engagement enhanced due-diligence; (h) the cross-Strait subsea-cable infrastructure protection upgrades following the February 2025 Pratas subsea-cable suspicious-anchor-drag incident; (i) the information-warfare and cognitive-warfare counter-measures; (j) the inter-ministerial coordination framework operationalising the above.

The political-coalition reception of the Ten Measures operational implementation across the first six months of Year Two partitioned along the established cleavages. The DPP framing positioned the operational implementation as overdue democratic-defence operationalisation under conditions of sustained PRC information-warfare and cognitive-warfare pressure documented by the Doublethink Lab (台灣民主實驗室), the Information Operations Research Group (IORG), and Recorded Future. The KMT framing positioned the operational implementation as escalation deteriorating cross-Strait stability and as procedural-bypass-of-the-LY in respect of measures that the KMT argued required statutory-legislation rather than executive-order operationalisation [TBD-VERIFY exact legal-basis disputation across each of the Ten Measures items — published reporting through Liberty Times, China Times, and the academic legal-commentary literature should be referenced for the item-by-item disputation map]. The TPP framing emphasised the procedural-bypass critique and the Foreign Hostile Force designation's potential application beyond PRC-affiliation to broader political-speech contexts.

3. The Post-Great Recall Aftermath — 26 July and 23 August 2025 Vote-Day Sequence and the Continuing KMT-TPP Working Majority

3.1 The May–July 2025 stage-two-to-stage-three transition and the pre-vote-day mobilisation tempo

The May–August 2025 Great Recall (大罷免, Da Bamian) campaign — the largest single-cycle deployment of the Public Officials Election and Recall Act (公職人員選舉罷免法) in the post-1994-amendment-era history of the recall framework, treated in detail at TW-D-04 — transitioned across May, June, and July 2025 from the stage-two petition-completion phase to the stage-three vote-day mobilisation phase. The recall framework operates in three stages: stage-one proposal (1 per cent of constituency registered electors; deadline approximately 30 days from launch); stage-two petition (10 per cent of constituency registered electors; deadline approximately 60 days from stage-one certification); stage-three vote (25-per-cent-turnout floor with majority "yes" required for passage). Across the second quarter of 2025 the stage-two petition completions accumulated across approximately twenty-four constituencies in the first-tranche and an additional cohort in the second-tranche, producing the pre-vote-day mobilisation architecture.

Civil-society organising principals across the May–July 2025 transition continued the May 2024 Bluebird Movement (青鳥運動) lineage architecture: the Economic Democracy Union (經濟民主連合) under Lai Chung-chiang (賴中強); the Taiwan Citizen Front (台灣公民陣線); regional civil-society coalitions across Taipei, New Taipei, Taoyuan, Hsinchu, Taichung, and Kaohsiung; the Kuma Academy (黑熊學院) civil-defence-training organisation under Puma Shen (沈伯洋) — concurrently a DPP legislator — and Ho Cheng-hui (何澄輝); and the Forward Alliance (壯闊台灣聯盟) under Enoch Wu (吳怡農). The mobilisation architecture across the May–July 2025 window operated through social-media platforms (predominantly Threads, Facebook, and Instagram) for younger-cohort mobilisation, through community-organising and door-knocking architecture for older-cohort mobilisation, and through coordinated talk-radio and television-talk-show engagement for broader-electorate mobilisation. KMT-affiliated counter-mobilisation operated through KMT-LY-Caucus member press engagements, through KMT-affiliated talk-radio and television-talk-show engagement (particularly TVBS and CTI Television), and through coordinated constituency-by-constituency defensive mobilisation by the targeted legislators.

KMT legislators targeted in the first-wave certifications included Wang Hung-wei (王鴻薇, Taipei 3), Hsu Chiao-hsin (徐巧芯, Taipei 7), Lo Chih-chiang (羅智強, Taipei 6 / KMT-list), Ma Wen-chun (馬文君, Nantou 1), Hsieh I-feng (謝衣鳳, Changhua 2), Wu Tzung-hsien (吳宗憲, Tainan 5 / KMT-list), Lin Pei-hsiang (林沛祥, Keelung), Lai Shyh-bao (賴士葆, Taipei 8), and additional legislators across the post-2024 KMT-LY-Caucus structure. Counter-recall petitions targeting selected DPP legislators were filed by KMT-affiliated civil-society organisations but with significantly lower stage-one threshold completion rates [TBD-VERIFY specific counter-recall target list and completion rates — published reporting through Liberty Times, China Times, and the Central Election Commission archive should be referenced for the full counter-recall target list].

3.2 The 26 July 2025 first-tranche vote-day outcomes

The 26 July 2025 first-tranche recall-vote day covered approximately twenty-four KMT legislators across constituencies primarily in Taipei, New Taipei, Taoyuan, Hsinchu, Taichung, and a small number of additional districts [TBD-VERIFY exact first-tranche constituency roster — the prevailing reporting through Liberty Times, China Times, United Daily News, and Focus Taiwan in the 26–28 July 2025 reporting window should be referenced for the definitive constituency list]. The vote-day procedural framework required the operative 25-per-cent-turnout-floor and majority-yes thresholds in each individual constituency under the Public Officials Election and Recall Act; vote-day turnout figures and yes-vote-share figures were tabulated by the Central Election Commission (CEC, 中央選舉委員會) and certified across the post-vote-day reporting window.

The published reporting in the immediate post-26 July 2025 vote-day window indicated that a substantial majority of the first-tranche recalls failed at one or both thresholds, with only a small minority — concentrated in the most-clearly DPP-leaning constituencies that had elected KMT legislators under specific 2024-election-cycle conditions — passing both thresholds [TBD-VERIFY exact first-tranche constituency-by-constituency vote-day results — the Central Election Commission's certified results table, published in late July or early August 2025, should be referenced as the authoritative source]. The structural reading articulated by Shelley Rigger, Kharis Templeman, Lev Nachman, and Wen-Ti Sung in the immediate post-vote-day commentary window positioned the outcome as evidence of the gap between activist civil-society stage-one-and-stage-two mobilisation capacity and broader electoral-coalition stage-three mobilisation capacity within KMT-dominant constituencies. The Doublethink Lab and Information Operations Research Group post-vote-day analysis identified PRC-affiliated media-amplification of pro-recall-failure-and-anti-DPP framings as a contributing variable, though academic disagreement persisted across the post-vote-day window about the magnitude of the PRC-information-operations contribution relative to organic-electorate-mobilisation dynamics.

3.3 The 23 August 2025 second-tranche vote-day outcomes

The 23 August 2025 second-tranche recall-vote day covered an additional cohort of KMT legislators across constituencies where the stage-two petition had completed certification between the first-tranche-vote-day and the second-tranche-vote-day windows [TBD-VERIFY exact second-tranche constituency roster and the exact second-tranche-vote-day date — published reporting through Liberty Times, China Times, United Daily News, and Focus Taiwan in the 23–25 August 2025 reporting window should be referenced for the definitive constituency list]. The second-tranche vote-day procedural framework operated under the same 25-per-cent-turnout-floor and majority-yes thresholds.

The published reporting in the immediate post-23 August 2025 vote-day window indicated that the second-tranche outcomes broadly paralleled the first-tranche outcomes, with the great majority of targeted recalls failing at one or both thresholds and only a small minority passing both thresholds [TBD-VERIFY exact second-tranche constituency-by-constituency vote-day results]. The cumulative first-tranche-and-second-tranche outcome — published across the post-23 August 2025 reporting window — was that approximately [TBD-VERIFY specific number of successful recalls across the two tranches; published reporting indicates that the cumulative successful-recall count was a small fraction of the approximately thirty targeted legislators] KMT legislators had been removed from their LY seats through the Great Recall process, triggering by-elections under the Public Officials Election and Recall Act framework that would proceed across subsequent windows. Counter-recall petitions targeting DPP legislators had largely failed at the stage-one-or-stage-two threshold and did not reach stage-three vote-day procedures in significant numbers [TBD-VERIFY counter-recall stage-completion outcomes].

3.4 The post-vote-day LY arithmetic and the institutional consequence

The post-23 August 2025 LY arithmetic — once the cumulative first-tranche-and-second-tranche vote-day results were certified by the Central Election Commission and the by-election cycle triggered by the small number of successful recalls had proceeded — continued the KMT-TPP working-majority configuration through May 2026. The post-recall LY composition continued at approximately KMT 50–52 / DPP 51 / TPP 8 / non-partisan 2 baseline subject to the small number of successful recalls and by-election outcomes [TBD-VERIFY exact post-recall-and-by-election LY composition through May 2026]; any by-election triggered by the small number of successful recalls did not materially alter the seat-by-seat partisan balance, particularly because the by-elections in KMT-leaning-constituency post-recall scenarios tended to return KMT candidates and because the by-election turnout was substantially lower than the original-cycle election turnout.

The institutional consequence of the failed Great Recall operated across multiple tracks. First, the Lai government's strategic-confrontation calculus shifted from a posture predicated on the possibility of a post-recall LY-majority restoration to a posture predicated on continuing minority-government operation through the remainder of the four-year term. Second, the post-Bluebird-Movement civil-society institutional architecture, which had organised the May 2024 Bluebird mobilisation and the 2025 Great Recall campaign, transitioned from constitutional-procedural-mobilisation operating mode into a new operating mode characterised by sustained constitutional-court advocacy, 2026 Nine-in-One election-monitoring and voter-mobilisation, and post-2025 disinformation-and-cognitive-warfare counter-mobilisation. Third, the KMT-LY-Caucus and TPP-LY-Caucus coordination, which had been structurally vulnerable to disruption in the event of significant first-tranche-vote-day passages, was reinforced by the failed-recall outcome and proceeded into the September 2025 – December 2025 FY2026 budget-deliberation cycle on a strengthened-coordination basis.

4. The October 2025 Kuomintang Chair-Election and the Post-Eric-Chu Reorientation

4.1 The Eric Chu chair-tenure (March 2021 – October 2025) outgoing record

Eric Chu (朱立倫), the KMT Chairman from March 2021 to October 2025, presided over the most-substantial post-2020-era KMT institutional renewal. Chu's chair-tenure record spanned the post-2020-election (Han Kuo-yu defeat by Tsai Ing-wen) KMT institutional reset, the 2021 referendum-cycle KMT positioning, the 2022 Nine-in-One mayoral elections (in which the KMT won 13 of 22 mayoralty-and-magistracy contests, including the special-municipality mayoralties in Taipei under Chiang Wan-an 蔣萬安, Taichung under Lu Hsiu-yen 盧秀燕, New Taipei under Hou You-yi 侯友宜, and additional county magistracies), the 2023 KMT presidential-primary cycle resulting in the selection of Hou You-yi as the 2024 presidential nominee, the 2024 election (in which Hou You-yi-Jaw Shaw-kong secured 33.49 per cent / 4,671,021 votes against Lai-Hsiao's 40.05 per cent / 5,586,019 votes and Ko-Wu's 26.46 per cent / 3,690,466 votes), the post-13 January 2024 LY arithmetic that produced the KMT 52-seat plurality, the post-2024 KMT-TPP working-coalition coordination including the May 2024 Guohui Gaige passage and the January 2025 FY2025 budget-cut sequence, and the 2025 Great Recall defensive coordination.

Chu's outgoing-chair-tenure framing of the post-2024 record positioned the KMT-TPP working coalition as a legitimate institutional-balance architecture; positioned the 2024 election as a structural defeat for the DPP single-party majority (in respect of the LY arithmetic) even as the presidential race produced a DPP victory; and positioned the post-recall mid-term as an opportunity for KMT institutional renewal and 2026-and-2028 strategic positioning. The KMT-internal critique of Chu's chair-tenure — articulated across post-2024 KMT-LY-Caucus statements, post-2025 KMT chair-election candidate platforms, and post-2025 academic-and-policy commentary — emphasised the 2024 presidential-race-loss and the perceived insufficiency of the KMT-internal cross-Strait-engagement-legacy operationalisation in the 2024 cycle.

4.2 The October 2025 chair-election candidate slate and the campaign architecture

The October 2025 Kuomintang chairmanship election proceeded under the KMT Constitution's chair-rotation provisions, with the candidate-registration window opening approximately three months before the vote-day and the formal-party-membership-vote constituting the operative selection mechanism. The candidate slate — derived from the post-2024 KMT-internal positioning and the post-Chu chair-succession dynamics — included [TBD-VERIFY exact October 2025 chair-election candidate roster and the final vote-share results — the prevailing reporting through Liberty Times, China Times, United Daily News, and Focus Taiwan in late October 2025 should be referenced for the definitive table]:

Hau Lung-pin (郝龍斌): former Taipei Mayor 1998–1999 (resigned to contest the 1999 Taipei legislative seat) and 2006–2014, former KMT Vice-Chairman, former Environmental Protection Administration Minister; positioned in the 2025 chair-election as a senior-statesman candidate with established cross-Strait-engagement-legacy credentials.
Cheng Li-wen (鄭麗文): KMT legislator, former DPP figure (defected from DPP to KMT in the post-2014-cycle window), party-television-personality with extensive talk-radio and television-talk-show profile; positioned in the 2025 chair-election as a generational-renewal candidate with anti-DPP-political-confrontation credentials.
Lo Chih-chiang (羅智強): KMT legislator, former Office of the President spokesperson during the Ma Ying-jeou administration, party-strategist with extensive 2014–2024-cycle KMT-internal-strategy involvement; positioned in the 2025 chair-election as a strategist-tactician candidate with post-2024 LY-confrontation credentials.
Sean Lien (連勝文): son of former KMT Chairman Lien Chan (連戰) and 2014 Taipei-mayoral candidate (defeated by Ko Wen-je), with extensive cross-Strait-engagement-network credentials inherited from his father's chair-tenure; positioned in the 2025 chair-election as a cross-Strait-engagement-restoration candidate.
Chang Ya-chung (張亞中): National Taiwan University professor of political science with the post-2021-chair-election runner-up position (in the 2021 chair-election against Eric Chu); positioned in the 2025 chair-election as a cross-Strait-political-pragmatism candidate emphasising 1992-Consensus-and-One-China-roof framings.

The October 2025 campaign architecture proceeded through KMT-Central-Standing-Committee-organised candidate debates, regional candidate forums across the principal KMT-base regions (particularly Taipei, New Taipei, Taoyuan, Hsinchu, Taichung, Tainan, Kaohsiung, and the Hakka-population regions of Miaoli and Hsinchu County), social-media campaigning across Facebook, YouTube, and the post-2024 Threads platform, and traditional-media engagements across the KMT-aligned media architecture (China Times, United Daily News, TVBS, CTI Television). The campaign -issue focus across the October 2025 window concentrated on: (a) the post-2024 KMT-TPP working-coalition operational sustainability under post-recall conditions; (b) the 2026 Nine-in-One election candidate-recruitment strategy across the special-municipality mayoralties; (c) the early 2028 presidential-primary framework and the candidate-recruitment-and-positioning calculus; (d) the KMT-internal cross-Strait-engagement-legacy operationalisation under post-2025-cross-Strait-pressure conditions; (e) the KMT-internal generational-renewal-versus-establishment-continuity balancing.

4.3 The post-October 2025 chair-handover and the institutional-priority reorientation

The October 2025 chair-election vote-day result selected the new chair from the candidate slate [TBD-VERIFY exact October 2025 chair-election outcome and the chair-handover date]; the post-handover chair took office on the date consistent with the KMT chair-rotation calendar. The new chair's institutional-priority reorientation across the post-October 2025 window centred on four operational tracks: (a) the November 2026 Nine-in-One election candidate-recruitment cycle, particularly the open-seat New Taipei mayoral race (following Hou You-yi's term-limit ending December 2026), the Taipei mayoral term-defence by Chiang Wan-an, the Taichung mayoral term-defence by Lu Hsiu-yen, the Taoyuan mayoral race (open-seat following the post-Cheng Wen-tsan and post-Chang San-cheng configuration), and the Kaohsiung mayoral race against incumbent Chen Chi-mai 陳其邁; (b) the post-recall LY caucus discipline architecture under continuing caucus convener Fu Kun-chi (傅崐萁); (c) the early 2028 presidential-primary framework and the candidate-recruitment-and-positioning calculus across the three principal KMT 2028 candidate-track figures (Chiang Wan-an, Lu Hsiu-yen, Hou You-yi); (d) the KMT-internal cross-Strait-engagement-legacy operationalisation under post-2025-cross-Strait-pressure conditions, including the post-2025 KMT-PRC inter-party-dialogue framework status [TBD-VERIFY post-2025 KMT-PRC inter-party-dialogue activity].

The political-coalition reception of the post-October 2025 KMT chair-handover partitioned along the established cleavages. The DPP framing positioned the chair-handover as an internal KMT positioning shift toward heightened cross-Strait-engagement-legacy operationalisation, potentially complicating the post-March 2025 Foreign Hostile Force designation operationalisation under conditions where KMT-LY-Caucus members might engage in KMT-PRC inter-party-dialogue framings that could trigger Anti-Infiltration Act scrutiny. The KMT-internal framing positioned the chair-handover as legitimate institutional-renewal under the KMT Constitution. The TPP framing emphasised the post-handover KMT-TPP working-coalition operational continuity as the principal post-handover variable. The academic-and-policy commentary across Shelley Rigger, Kharis Templeman, Lev Nachman, and Wen-Ti Sung positioned the chair-handover as a structurally-significant event whose forward-trajectory consequences would be operationalised across the November 2026 Nine-in-One election cycle and the early 2028 presidential-positioning calculus.

5. The FY2026 Budget Battle — September–December 2025 LY Deliberation and the 3-Per-Cent-of-GDP Defence-Spending Question

5.1 The Executive Yuan September 2025 submission and the budget-proposal architecture

The Executive Yuan (行政院) transmitted the proposed FY2026 Central Government General Budget to the Legislative Yuan in early-to-mid September 2025 under the Budget Act (預算法) framework [TBD-VERIFY exact submission date]. The proposed budget — assembled across the inter-ministerial Budget Statement process led by the Directorate-General of Budget, Accounting and Statistics (DGBAS, 行政院主計總處) under the post-2024 Minister of Finance Chuang Tsui-yun (莊翠雲) and the post-2024 Minister without Portfolio for Budget Coordination [TBD-VERIFY exact post-2024 minister-without-portfolio-for-budget-coordination tenure] — proposed total expenditures in the range of NT$3.2–3.4 trillion [TBD-VERIFY exact proposed total]. The major-programme allocations across the proposed FY2026 budget included:

National Defence (Ministry of National Defence under Wellington Koo, 顧立雄): a proposed NT$949 billion or thereabouts [TBD-VERIFY exact MND-line proposal, treated in detail at TW-D-06 and TW-F-04], representing approximately 28 per cent of total general-budget expenditure and approximately 3.3–3.4 per cent of projected FY2026 GDP under standard GDP-projection methodology.
Social Welfare and Pension (Ministry of Health and Welfare, Ministry of Labour, and the National Pension Insurance and Labour Insurance frameworks): the largest single category, encompassing the post-2017 pension-reform framework operationalisation, the National Health Insurance (NHI) cross-subsidy, the post-2024 long-term-care-2.0 framework, and the indigenous-and-Hakka programme expenditures.
Education (Ministry of Education): the K-12 and tertiary-education funding architecture including the post-2024-cycle higher-education-reform tranche.
Infrastructure (Ministry of Transportation and Communications, Ministry of Economic Affairs, Ministry of Digital Affairs): continuing build-out across the Forward-Looking Infrastructure Programme (前瞻基礎建設計畫) post-2024 cycle, the post-2024 energy-infrastructure resilience programme, and the post-2024 digital-infrastructure programme.
Cross-Strait and Foreign Affairs (Mainland Affairs Council under Chiu Chui-cheng 邱垂正, Ministry of Foreign Affairs under Lin Chia-lung 林佳龍, National Security Council): continuing operational budgets across the post-2025 Ten Measures operationalisation and the post-2025 European-and-Indo-Pacific bilateral-track architecture.
Discretionary Categories: including the National Development Council (NDC) discretionary-grant programmes, the Climate Change Committee operational budget, the FORMOSAT and Hayami satellite-procurement programmes, and other discretionary lines.

5.2 The September–November 2025 LY deliberation cycle

The September–November 2025 LY deliberation cycle proceeded through the standard Budget Act framework: first-reading floor consideration in September 2025; standing-committee detailed review across the eight LY standing committees (Internal Administration; Foreign Affairs and National Defence; Economic; Finance; Education and Culture; Transportation; Judicial and Organic Laws; Social Welfare and Environmental Hygiene) across October and November 2025; second-reading consideration of standing-committee reports and amendments across late November and early December 2025; and third-reading passage in late December 2025 [TBD-VERIFY exact third-reading-passage date].

The standing-committee detailed-review phase across October and November 2025 operated as the principal terrain for the KMT-TPP cuts-and-freezes positioning. The Foreign Affairs and National Defence Committee, the Finance Committee, the Internal Administration Committee, and the Economic Committee were the principal sites of contested-line consideration. The post-October 2025 KMT chair-tenure operationally moderated the cuts-framing relative to the January 2025 FY2025 sequence, reflecting both the post-recall political environment and the operational realities of post-March 2025 cross-Strait-resilience-budget commitments; the KMT-LY-Caucus under caucus convener Fu Kun-chi (傅崐萁) and the TPP-LY-Caucus under Huang Kuo-chang (黃國昌) proposed cuts-and-freezes substantially below the NT$200-billion-plus aggregate of the January 2025 round. The DPP-LY-Caucus under caucus convener Wu Sz-huai (吳思瑤) [TBD-VERIFY post-2024 DPP-LY-Caucus convener identity through 2025–2026] coordinated the DPP-defensive positioning across the contested lines.

5.3 The late-December 2025 third-reading passage and the aggregate cuts-and-freezes outcome

The third-reading passage in late December 2025 [TBD-VERIFY exact third-reading-passage date] produced an aggregate budget-reduction substantially below the January 2025 NT$200-billion-plus aggregate, reflecting the post-recall political environment, the post-March 2025 cross-Strait-resilience-budget commitments, the Trump-2 administration's continuing pressure for elevated Taiwan defence outlays, and the post-October 2025 KMT chair-tenure operational moderation. The aggregate-cuts-and-freezes outcome across major categories included [TBD-VERIFY exact category-by-category cuts-and-freezes outcomes — the prevailing reporting through Liberty Times, China Times, United Daily News, Focus Taiwan, and the DGBAS post-passage budget statement should be referenced for the definitive table]: the defence-line preservation substantially intact (relative to the January 2025 defence-line cuts); the cross-Strait-and-foreign-affairs lines preservation substantially intact; modest cuts-and-freezes across the discretionary categories; and continuing freezes-pending-Executive-Yuan-report-to-LY across selected line-items where the KMT-TPP working majority demanded post-passage policy-clarification.

The post-passage political-coalition reception partitioned: the DPP-Executive Yuan framing positioned the FY2026 budget passage as evidence of post-recall political-environment normalisation and as operational validation of the Lai-government strategic-trajectory commitments; the KMT-TPP-working-majority framing positioned the passage as legitimate-legislative-supervision-of-executive-power under post-2025 strategic-environment conditions; the academic-and-policy commentary across Shelley Rigger, Kharis Templeman, and Lev Nachman positioned the passage as a sustained-equilibrium configuration consistent with the post-2000 alternation pattern. Premier Cho Jung-tai (卓榮泰) characterised the FY2026 budget passage as substantially better than the January 2025 FY2025 round but as still falling short of the Executive Yuan's preferred allocation across the cross-Strait-resilience-and-democratic-defence lines.

5.4 The defence-spending-to-3-per-cent-of-GDP question

The defence-spending-to-GDP-ratio trajectory has emerged as the central strategic-and-fiscal axis of the Lai administration's Year Two. The FY2025 operative baseline of approximately 2.45 per cent of GDP — composed of the approximately NT$606 billion FY2025 general-budget defence-line plus the NCSIST research-and-development funding plus selected special-budget tranches — established the inherited starting position. The proposed FY2026 defence-budget of approximately NT$949 billion against projected FY2026 GDP of approximately NT$28–29 trillion would produce a ratio of approximately 3.3–3.4 per cent [TBD-VERIFY exact FY2026 defence-spending-to-GDP ratio], moving the ratio above the symbolically-significant 3-per-cent threshold for the first time in the post-democratisation era.

The Trump-2 administration's defence-spending demand has been articulated across the first eighteen months of the Trump-2 administration through statements by Secretary of Defense, Senate Foreign Relations Committee members, and President Donald Trump himself. The publicly reported demand-range has varied across three figures: 3 per cent (the most-frequently-referenced figure, broadly consistent with the post-2022-Pelosi-visit-era trajectory and with the post-2024 Taiwan-domestic-political-consensus baseline); 5 per cent (the Trump-articulated figure in several public-statement contexts, broadly consistent with the higher-end-NATO-spending-demand framing that the Trump-2 administration has applied across other allied-relations contexts); and 10 per cent (the Trump-articulated figure in at least one widely reported statement in 2025) [TBD-VERIFY exact statement chronology and figure references — the published reporting through Reuters, Bloomberg, the Wall Street Journal, Financial Times, and the Defense Security Cooperation Agency archive across 2025 should be referenced for the definitive statement-chronology table].

The Cho Jung-tai Executive Yuan position has been to advance the defence-spending trajectory progressively toward 3 per cent of GDP through the FY2026 and FY2027 budget cycles while resisting the higher Trump-2-articulated targets on three grounds: (a) fiscal-sustainability — defence-spending above 3 per cent without compensating revenue-raising measures threatens the sovereign-debt sustainability framework under the Public Debt Act (公共債務法) and the post-2020-pandemic-debt-trajectory operational constraints; (b) operational-absorptive-capacity — defence-spending substantially above 3 per cent encounters absorption-capacity constraints in respect of the MND-and-NCSIST procurement-and-integration architecture; (c) opportunity-cost — defence-spending substantially above 3 per cent imposes opportunity-costs across the social-welfare-and-pension, education, infrastructure, and discretionary-category allocations that the Lai-government strategic-trajectory commitments require.

The Hudson Institute hawk position (Seth Cropsey, Iskander Rehman, Walker Mills) has argued across multiple 2025 publications that even 3 per cent is insufficient given the post-2027 Davidson Window conflict-risk assessment, in which the former US Indo-Pacific Command Commander Philip Davidson's March 2021 congressional testimony articulated a window-of-action-by-2027 framing for the PRC Taiwan-related decision calculus. The CSIS First Battle of the Next War (Cancian, Cancian, Heginbotham 2023) wargaming series and the post-2024 follow-on assessment series have argued that the Taiwan-defence operational requirements substantially exceed the 3-per-cent baseline, particularly across the layered-air-and-missile-defence, anti-ship-cruise-missile, sea-mining, and asymmetric-warfare procurement tracks. The Ministry of Finance fiscal-orthodox position — articulated through the post-2024 Chuang Tsui-yun MOF position — has emphasised sovereign-debt sustainability constraints. The Lai-pragmatist position has navigated between the strategic-demand and fiscal-constraint poles through progressive escalation toward 3 per cent across the FY2026 and FY2027 cycles.

The third-reading passage of the FY2026 defence-budget line substantially intact preserves the proposed 3.3–3.4-per-cent ratio under the operational implementation; the post-passage operational implementation across the 1 January 2026 FY2026 fiscal year opening has proceeded across the MND procurement and operational planning architecture under Wellington Koo.

6. The Hsiao Bi-khim Vice-Presidential Role — International Diplomacy, Cross-Strait Resilience, and 2028 Positioning

6.1 The pre-Vice-Presidential career architecture and the post-2024 portfolio baseline

Hsiao Bi-khim (蕭美琴) — Taiwan's former Representative to the United States 2020–2023, Lai's running-mate on the 13 January 2024 ticket, and the post-20 May 2024 Vice President — operationalised across Year Two a Vice-Presidential portfolio anchored in international diplomacy, cross-Strait resilience, and 2028-presidential-trajectory positioning. Hsiao's pre-Vice-Presidential career architecture provides the institutional baseline:

DPP-list legislator (2002–2008): three terms across the Chen Shui-bian presidency, providing the legislative-experience baseline.
Constituency legislator (Hualien, 2012–2020): two terms across the Ma-Tsai transition, including the post-2014 Sunflower-era legislative engagement and the post-2016 Tsai-era cross-Strait-policy formulation engagement.
Taiwan Representative to the United States (July 2020 – November 2023): the longest US-Representative tenure in the post-1979 unofficial-relations era under the framework of the American Institute in Taiwan (AIT) – Taipei Economic and Cultural Representative Office (TECRO) reciprocal architecture. Across her US-Representative tenure Hsiao operationalised the post-2020 Trump-1-to-Biden transition US-Taiwan diplomatic-engagement architecture, the August 2022 Pelosi visit pre-and-post-visit US-Taiwan coordination (anchored at TW-C-06), the post-2022 PRC sanctions against her personally (Hsiao is one of the small number of Taiwanese officials personally sanctioned by the PRC State Council Taiwan Affairs Office under the post-2022 sanctioning framework), and the post-2022 US-Taiwan arms-transfer and trade-engagement architecture. Hsiao was named as a participating-figure in the post-2022 TAO sanctions list, alongside Lai Ching-te (then Vice President), Wu Chao-hsieh (吳釗燮, then MOFA Minister), and others [TBD-VERIFY exact post-2022 TAO sanctions-list composition and the sanctions-list mechanism].
Vice-Presidential nominee (November 2023 – January 2024): nominated by Lai as the DPP Vice-Presidential candidate for the 13 January 2024 election.

6.2 The Year Two Vice-Presidential portfolio operationalisation

The Year Two Vice-Presidential portfolio has been operationalised across three principal tracks. First, the Whole-of-Society Defence Resilience Committee (全社會防衛韌性委員會) co-chairmanship: Hsiao has co-chaired (with Premier Cho Jung-tai) the post-June 2024 Whole-of-Society Defence Resilience Committee operationalisation, with quarterly meetings convening senior cabinet, military, civil-society, and academic figures across the post-Lai-era resilience-architecture build-out. The Committee operationalisation through Year Two has covered civil-defence training and volunteer-reservist mobilisation via Kuma Academy (黑熊學院) and Forward Alliance (壯闊台灣聯盟); strategic-stockpile and supply-chain resilience including the strategic-petroleum-reserve expansion; energy and critical-infrastructure resilience including the post-Hualien-2024-earthquake grid-reinforcement programme; satellite-internet redundancy via Eutelsat OneWeb and other non-Starlink providers; financial-and-economic resilience including the post-2025 cross-Strait economic-coercion preparedness framework; and information-warfare and cognitive-warfare resilience [TBD-VERIFY specific Year Two Committee meeting dates and operational milestones — published reporting through the Office of the President archive should be referenced].

Second, the second-track diplomacy with the Trump-2 administration: Hsiao has led second-track diplomacy through her established Washington network across the post-2025 transition-period and the post-January 2025 Trump-2 administration window. The principal Washington interlocutors across the post-2025 window have included the National Security Council Indo-Pacific staff, the State Department East Asian and Pacific Affairs Bureau, the Office of the United States Trade Representative (USTR), the Department of Commerce Bureau of Industry and Security, the Department of Defense Indo-Pacific and Acquisition and Sustainment offices, and selected Senate Foreign Relations Committee and House Foreign Affairs Committee members [TBD-VERIFY specific 2025–2026 Hsiao-led Washington engagement chronology — published reporting through MOFA, Office of the President, and the Liberty Times / Taipei Times / Focus Taiwan archive should be referenced for the definitive engagement-chronology table]. Hsiao's post-2020-Representative-era established Washington-network operationalisation has provided the Lai administration with a senior-diplomatic-channel that bypasses the operational constraints of the unofficial US-Taiwan relations framework while remaining within its formal architecture.

Third, the post-2025 European-and-Indo-Pacific bilateral-track engagements: Hsiao has executed selected post-2025 bilateral-track engagements across European partners (Czechia, Lithuania, Slovakia, Slovenia, Poland, and the Vatican Holy See diplomatic-continuity track), Indo-Pacific partners (Japan, Korea, Australia, the Philippines, and selected ASEAN partners), and selected Latin American partners (Paraguay, Guatemala, Belize) within the post-2025 12-or-13-formal-diplomatic-ally roster preservation track [TBD-VERIFY specific 2025–2026 Hsiao-led international engagement chronology — published reporting through MOFA, Office of the President, and the Liberty Times / Taipei Times / Focus Taiwan archive should be referenced]. The post-2025 European-track engagement has continued the post-2021 Czech-Lithuania-Slovakia engagement architecture built during the Tsai administration's second term; the post-2025 Holy See diplomatic-continuity question has continued under post-2025 Vatican-PRC sino-Vatican-agreement renewal cycles [TBD-VERIFY post-2025 Holy See-Taiwan-PRC trilateral diplomatic-architecture status].

6.3 The 2028-positioning analytical reading

The 2028-positioning analytical reading by Wen-Ti Sung, Lev Nachman, and Kharis Templeman has consistently identified Hsiao as the structurally-most-positioned DPP 2028 presidential-candidate-track figure. The structural reasoning operates across three considerations. First, the Vice-Presidency-to-presidential succession trajectory has historically been a candidate-track for both KMT (Lien Chan 1996, Annette Lu 2008 non-nomination, Vincent Siew 2008 non-nomination) and DPP (Lai Ching-te 2024 from VP-track) figures, with Lai's own 2024 ascension from the 2020–2024 Tsai-Lai Vice-Presidency providing the immediate precedent. Second, Hsiao's pre-2024 career architecture — particularly the 2020–2023 US-Representative tenure — has equipped her with the international-diplomatic-and-strategic experience and the Washington-network credentials that the 2028-cycle DPP candidate-track would require under continuing Trump-2-era US-Taiwan transactional architecture. Third, the post-2025 Whole-of-Society Defence Resilience Committee co-chairmanship has equipped her with the domestic-resilience-architecture operational-experience that the 2028-cycle DPP candidate-track would require.

The DPP-internal 2028-positioning landscape — articulated across post-2024-and-post-recall commentary — has converged on Hsiao as the principal DPP 2028-track figure, with Premier Cho Jung-tai, Vice Premier Cheng Li-chiun (鄭麗君), Taipei Mayor candidate-track figures, and the post-2025 DPP Chairman (post-Lai-presidency-cycle DPP chair transitions [TBD-VERIFY post-2024 DPP chair-transition chronology]) as secondary candidate-track figures. The KMT-side 2028-positioning landscape has crystallised around three principal candidates (Chiang Wan-an Taipei Mayor; Lu Hsiu-yen Taichung Mayor; Hou You-yi New Taipei Mayor) plus the post-October 2025 KMT chair-tenure figure. The TPP-side 2028-positioning has remained structurally constrained by the Ko Wen-je trial-proceedings cloud and the post-Ko-Wen-je institutional-realignment under Huang Kuo-chang.

7. The Trump-2 US-Taiwan Trade-Negotiating-Track Continuation under Vice Premier Cheng Li-chiun

7.1 The post-2 April 2025 reciprocal-tariff architecture and the 9 April 2025 pause

The 2 April 2025 Trump-2 "Liberation Day" tariff announcement initially placed a 32-per-cent reciprocal-tariff rate on Taiwan-origin goods exports to the US under the Trump-2 administration's reciprocal-tariff framework, derived from the bilateral-trade-deficit-and-non-tariff-barrier composite-calculation methodology applied across the principal US trading partners. The 32-per-cent rate placed Taiwan in the upper-middle range of the reciprocal-tariff tabulation, above the 24-per-cent Japan rate, below the 46-per-cent Vietnam rate and the 49-per-cent Cambodia rate, and broadly comparable to the South Korea rate [TBD-VERIFY exact comparative 2 April 2025 reciprocal-tariff rates across Taiwan, Japan, South Korea, and other Indo-Pacific partners].

The 9 April 2025 ninety-day pause on reciprocal-tariff implementation — announced by President Trump on Truth Social in the immediate post-2 April 2025 market-reaction window — was followed by extension cycles and continuing USTR-Taiwan negotiating-team activity. The post-pause framework retained the 10-per-cent baseline reciprocal-tariff across most partners (including Taiwan) while suspending the partner-specific higher rates pending bilateral-negotiation outcomes. The post-pause negotiating-window architecture across the spring, summer, autumn, and winter of 2025 and into 2026 has operated under the framework of bilateral negotiations between USTR (under the post-January 2025 Trump-2 USTR Jamieson Greer) and the Taiwan negotiating team led by Vice Premier Cheng Li-chiun (鄭麗君) in her Office of Trade Negotiations (OTN, 行政院經貿談判辦公室) lead role and Minister of Economic Affairs Kuo Jyh-huei (郭智輝) [TBD-VERIFY exact tenure status of Kuo through May 2026 — published reporting through the OTN archive, Liberty Times, China Times, United Daily News, and Focus Taiwan should be referenced for the negotiating-team-composition and round-by-round chronology].

7.2 The Section 232 semiconductor investigation and the parallel-track semiconductor architecture

The Section 232 semiconductor investigation, initiated under the Trump-2 administration's Department of Commerce framework in early 2025, has operated as a parallel-track instrument to the reciprocal-tariff architecture and as the proximate basis for any semiconductor-specific tariff actions under the Trump-2 architecture. Section 232 of the Trade Expansion Act of 1962 authorises the President to impose trade restrictions on the basis of national-security findings; the post-2018 first-Trump-administration use of Section 232 to impose steel-and-aluminium tariffs provided the operational-precedent framework. The Section 232 semiconductor investigation has produced findings [TBD-VERIFY exact Section 232 report-publication date and findings — the published reporting through the Department of Commerce Bureau of Industry and Security archive and Reuters, Bloomberg, and the Wall Street Journal should be referenced].

The TSMC Arizona-Kumamoto-Dresden expansion narrative has provided the Taiwan-side procurement-offer enhancement architecture across the post-April 2025 negotiating-window. The narrative's principal components: (a) the Arizona Phoenix campus, with multiple-fab-phase architecture including Fab 21 Phase 1 (commenced production late 2024 under the 5-nm-and-4-nm process node), Phase 2 (under construction with projected 2028 production opening under the 3-nm process node), and Phase 3 (announced under the post-March 2025 Trump-administration-engagement framework with projected post-2030 production opening) [TBD-VERIFY exact Arizona-campus phase-by-phase chronology — treated in detail at TW-D-03]; (b) the Kumamoto Japan ASML-and-Sony-co-investment fab, with Phase 1 production opening late 2024 and Phase 2 under construction; (c) the Dresden European Semiconductor Manufacturing Company joint-venture under construction with projected post-2027 production opening. The TSMC-led semiconductor-investment-narrative has been operationalised by both the Trump-2 administration (as evidence of post-2025 US-Taiwan economic-relationship architecture) and the Lai administration (as the principal procurement-offer-and-strategic-positioning architecture for the post-2025 US-Taiwan economic relationship), with the narrative's broader strategic-and-industrial-policy consequences treated in detail at TW-D-03 and TW-G-01.

7.3 The Cheng Li-chiun OTN architecture and the negotiating-round chronology

Vice Premier Cheng Li-chiun (鄭麗君) — former Minister of Culture 2016–2020 under the Tsai administration, post-May 2024 Vice Premier under the Cho Jung-tai cabinet, and post-April 2025 Office of Trade Negotiations lead figure — has operationalised the Taiwan-side post-April 2025 negotiating architecture across the OTN institutional framework. The OTN was established under the Executive Yuan in the post-2002-WTO-accession architecture as the principal cross-ministerial trade-negotiating coordination body, drawing on MOEA, Ministry of Finance, MOFA, Ministry of Agriculture, Ministry of Health and Welfare, and Ministry of Labour participation. The post-April 2025 OTN-team composition has included senior career officials drawn from MOEA's Bureau of Foreign Trade and International Trade Administration, Ministry of Finance customs and tax officials, and post-2025-Hsiao-Bi-khim-coordinated Washington-engagement-team support.

The negotiating-round chronology across the post-April 2025 window has included [TBD-VERIFY specific 2025–2026 negotiating-round dates, the principal-negotiator participation, and the round-by-round outcome architecture — published reporting through the OTN archive, USTR public-statement archive, Liberty Times, China Times, United Daily News, and Focus Taiwan should be referenced for the definitive round-by-round chronology table]. The negotiating-track -issue focus across the rounds has covered: (a) the reciprocal-tariff-rate determination, with Taiwan negotiating for a rate substantially below the 32-per-cent April 2025 baseline; (b) the Section 232 semiconductor-specific tariff structure, with Taiwan negotiating against the proposed 100-per-cent-tariff threat on imported chips that Trump articulated across multiple 2025 public statements; (c) the procurement-offer architecture, with Taiwan offering enhanced US-import procurement across energy (LNG and oil), defence (continuing FMS pipeline), agricultural (soybeans, beef, and pork), and aircraft (Boeing 787 and 737-MAX orders) categories; (d) the investment-offer architecture, with TSMC's Arizona-campus expansion serving as the principal investment-offer component; (e) the non-tariff-barrier removal architecture, with Taiwan offering enhanced market-access provisions across pharmaceutical, agricultural-product, and digital-services categories. The post-April 2025 negotiating-track has not produced a final tariff-settlement outcome through the May 2026 cut-off; the post-pause framework has remained in operational effect through extension cycles.

7.4 The arms-transfer and FMS-pipeline parallel-track architecture

The Trump-2 administration's Taiwan-related arms-transfer cycle through Year Two has continued the post-2024 trajectory of positioning Taiwan as a strategic-deterrence asset. The post-March 2025 arms-transfer notifications to the US Congress under the Arms Export Control Act (AECA) framework have included [TBD-VERIFY exact post-March 2025 arms-package announcement dates, dollar magnitudes, and weapon-systems composition — published reporting through Reuters, Bloomberg, the Defense Security Cooperation Agency (DSCA) congressional-notification archive, and the Liberty Times / United Daily News should be referenced]:

F-16V Block 70/72 fighter-aircraft deliveries: continuing under the 66-aircraft order announced August 2019 and progressively delivered through the 2024–2026 window with completion projected by approximately end-2026.
HIMARS rocket-system deliveries: continuing under the post-2020 announced orders.
AGM-84L Block II Harpoon coastal-defence-system deliveries: continuing under the December 2022-announced 400-missile package with delivery extending through 2028.
AIM-120D AMRAAM air-to-air missile deliveries: continuing under the post-2020 announced orders.
Stinger MANPADS deliveries: continuing under the post-2020 announced orders.
NASAMS air-defence system: under the post-2024 announced framework.
Volcano vehicle-launched-mine system: under the post-2024 announced framework.
MQ-9B SeaGuardian unmanned aerial system: under the post-2024 announced framework.
Post-2025 announced packages: [TBD-VERIFY exact post-March 2025 FMS-package announcement dates and aggregate values].

The FMS-pipeline parallel-track has operated as the principal strategic-deterrence-architecture component of the post-2025 US-Taiwan relationship, with the arms-transfer-track continuity providing the operational counterweight to the tariff-and-economic-pressure track. Bonnie Glaser, Ryan Hass, and Kharis Templeman have characterised the resulting Trump-2 Taiwan-posture as a "transactional-deterrence" model — combining substantial arms-transfer reinforcement with continuing tariff-and-pressure leverage — that differs in tonal-and-procedural respects from the Biden-era "principled-and-process-driven" model but that has not produced a weakened US-Taiwan strategic underpinning.

8. The Cross-Strait Pressure Trajectory — Strait Thunder-2025A/B and the Post-March 2025 Ten Measures Operationalisation

8.1 The Strait Thunder-2025A April 2025 exercise

The PLA Strait Thunder-2025A (海峽雷霆-2025A) exercise of April 2025 — conducted approximately one month after the 13 March 2025 Lai Foreign Hostile Force designation and the Ten Measures package — operated as the operational counterpart to the PRC State Council Taiwan Affairs Office's rhetorical confrontation of the post-March 2025 Lai-administration position [TBD-VERIFY exact Strait Thunder-2025A exercise dates and order-of-battle composition — published reporting through AMTI CSIS, the ROC MND press archive, IISS, Reuters, and Bloomberg should be referenced for the definitive exercise-mapping table]. The exercise framework, similar to the May 2024 Joint Sword 2024A and the October 2024 Joint Sword 2024B, encircled Taiwan with naval, air, and rocket-force elements; the exercise designation under the Strait Thunder rather than Joint Sword nomenclature signalled a PLA-naming-pattern shift articulated by Russell Hsiao and Bonny Lin as reflecting an elevated PLA Eastern Theatre Command operational-tempo posture.

The Taiwan-side response to Strait Thunder-2025A activated the Joint Operations Command Centre and deployed counter-monitoring assets across the established post-2022 deterrence-and-resilience architecture. The American Institute in Taiwan (AIT) and US Indo-Pacific Command issued standard "monitoring closely" statements; the post-exercise grey-zone-pressure continuation included sustained median-line crossings and Coast Guard activity around Kinmen, Matsu, and Pratas. The PRC State Council Taiwan Affairs Office characterised the exercise as a legitimate response to Lai-government "secessionist provocations"; the Mainland Affairs Council (MAC) reciprocal counterpart characterised the exercise as illegal coercion under international law.

8.2 The Strait Thunder-2025B later-2025 exercise

The Strait Thunder-2025B exercise of later 2025 [TBD-VERIFY exact Strait Thunder-2025B exercise dates and order-of-battle composition] continued the post-April 2025 PLA exercise tempo. The exercise framework included blockade-rehearsal and decapitation-rehearsal exercise components reported by IISS, CSIS, and the ROC MND. The post-Strait Thunder-2025B analytical reading by Bonnie Glaser, Bonny Lin, and Brian Hart positioned the exercise tempo as evidence of the PRC's normalisation of large-scale grey-zone-pressure exercise activity in the post-2022-Pelosi-visit era, with the FY2025-and-FY2026 exercise-tempo elevation reflecting both the post-Lai-inaugural cross-Strait-rhetorical escalation and the broader PLA modernisation trajectory.

8.3 The post-2025 subsea-cable incidents and the cable-protection architecture

The post-February 2025 subsea-cable incidents — including the February 2025 Pratas Channel suspicious-anchor-drag incident involving the Cameroon-flagged Hongtai 58 vessel [TBD-VERIFY exact vessel name and flag] and subsequent post-2025 cable-cut incidents in the Penghu, Pratas, and Taishi cable-system zones [TBD-VERIFY exact post-2025 subsea-cable incident chronology] — have continued to generate cross-Strait-architectural friction. The post-2025 cable-protection architecture has operated across MND, Coast Guard Administration (CGA), and Ministry of Digital Affairs (MODA) coordination, with the post-2025 satellite-redundancy programme acceleration via Eutelsat OneWeb and other non-Starlink providers providing the operational redundancy backstop. The Lai-government framing has positioned the cable-incidents as part of a sustained pattern of PRC-affiliated grey-zone cable-sabotage activity; the PRC framing has characterised the ROC-side detentions of cable-incident-implicated vessels as overreach.

8.4 The post-March 2025 Ten Measures operational implementation through Year Two

The post-March 2025 Ten Measures (十項措施) operational implementation has continued through Year Two across the inter-ministerial coordination framework. The cross-Strait people-flow restrictions on PRC entertainers and influencers, the cross-Strait exchange-programme scrutiny, the restored military-court jurisdiction in espionage cases, the PRC-citizenship-renunciation enforcement, and the subsea-cable infrastructure-protection upgrades have continued to operate. The political-coalition reception across Year Two has continued the established partition: the DPP framing positions the operational implementation as overdue democratic-defence operationalisation; the KMT framing positions the operational implementation as escalation deteriorating cross-Strait stability and as procedural-bypass-of-the-LY; the TPP framing emphasises the procedural-bypass critique. The post-Year-Two cross-Strait architecture has therefore sustained a normalised-elevated-grey-zone-pressure pattern under which the post-March 2025 Ten Measures operationalisation and the post-2025 Strait Thunder exercise tempo together produce a sustained-confrontation equilibrium.

9. The TPP under Huang Kuo-chang, the Ko Wen-je Trial-Proceedings Cloud, and the Post-Sunflower Civil-Society Architecture

9.1 The Huang Kuo-chang chair-tenure operational pattern

The Taiwan People's Party (TPP) under Chairman Huang Kuo-chang (黃國昌) has continued through Year Two the legislative-confrontation tactical posture established in late 2024 and early 2025. Huang's chairmanship-tenure, which commenced in January 2025 [TBD-VERIFY exact accession date — treated in detail at TW-D-04 and TW-D-05], has continued the dual capacity as TPP Chairman and as a principal TPP-LY-Caucus voice. The TPP's eight LY seats — all allocated under the proportional-representation party-list provisions and including Huang Kuo-chang, Wu Hsin-ying (吳欣盈), Lin Kuo-cheng (林國成), and others [TBD-VERIFY exact TPP-LY-Caucus roster across 2024–2026] — have continued to hold the median-vote position in every contested LY motion.

Huang Kuo-chang's pre-TPP-chairmanship career architecture provides the institutional baseline for his operational pattern. Huang's pre-TPP career included his academic-legal career at the Institutum Iurisprudentiae of Academia Sinica, his pre-2014 Sunflower-Movement civil-society leadership as a principal Black Island Nation Youth Front (黑色島國青年陣線) figure, his post-2014 New Power Party (NPP) co-founding and chair-tenure, his 2016 NPP LY constituency-seat election (defeating incumbent KMT legislator Hsieh Kuo-liang 謝國樑 in New Taipei 12), and his 2020 NPP defeat-and-departure trajectory. Huang's post-2022 TPP joining was followed by his 2024-election TPP-list LY seat and his 2024-election-cycle TPP caucus convener role; his post-Ko-Wen-je-indictment January 2025 chair-ascension followed the TPP-internal succession dynamics.

The TPP-LY-Caucus budget position across the September–December 2025 FY2026 deliberation cycle has continued to align with the KMT-LY-Caucus on the broad budget-reduction-and-freeze direction while sustaining sharper criticism of the post-March 2025 Foreign Hostile Force designation's procedural-bypass-of-the-LY operational architecture. The TPP's polling-share trajectory through 2025–2026 has stabilised at approximately 10–13 per cent across the late-2025-and-early-2026 monthly tracking polls [TBD-VERIFY exact monthly-tracking-poll readings].

9.2 The Ko Wen-je Taipei District Court trial-proceedings cloud

The Ko Wen-je Taipei District Court trial proceedings, which opened in early 2025 with sustained witness-examination, prosecution-and-defence cross-examination, and procedural-motion cycles, have generated continuing media attention through 2025–2026. The principal-charges architecture: the Core Pacific City case (京華城案) — a rezoning case from Ko's Taipei Mayoralty (2014–2022) involving questions about the volume-rate adjustment for the Core Pacific City property and corresponding alleged payments — under aggravated charges including breach of public trust, profiteering, and undeclared political-donations handling; and the political-donations case involving allegations of undeclared political-donations across the 2024 election cycle.

The trial proceedings through 2025–2026 have not concluded through May 2026 [TBD-VERIFY exact post-2025 trial-progress milestones; the Taipei District Court reporting indicates that the trial has remained in evidence-examination phase through Q1 2026 with no first-instance verdict yet rendered]. The procedural-motion cycles across the post-2025 trial-proceedings window have included multiple defence motions to suspend pre-trial detention (some of which have been granted in part across mid-2025), prosecution motions to introduce additional evidence, and procedural disputes over witness-list composition and cross-examination scope. The TPP-internal post-Ko-Wen-je institutional-realignment has continued through 2025–2026 with sustained polling-level erosion of the TPP's 2024-election 26-per-cent vote share toward the 10–13-per-cent range.

9.3 The civil-society architecture transition into 2026

The civil-society architecture that organised the May 2024 Bluebird Movement (青鳥運動) and the May–August 2025 Great Recall campaign has, through Year Two, transitioned into a new operating mode characterised by sustained constitutional-court advocacy, 2026 Nine-in-One election-monitoring and voter-mobilisation, and post-2025 disinformation-and-cognitive-warfare counter-mobilisation. The principal organising vehicles — the Economic Democracy Union (經濟民主連合) under Lai Chung-chiang (賴中強), the Taiwan Citizen Front (台灣公民陣線), Kuma Academy (黑熊學院) under Puma Shen (沈伯洋) and Ho Cheng-hui (何澄輝), and Forward Alliance (壯闊台灣聯盟) under Enoch Wu (吳怡農) — have continued as the principal civil-society organising vehicles.

The post-August 2025 institutional-architecture transition has involved: the Economic Democracy Union's pivot from recall-petition-organising to constitutional-court-advocacy and 2026-election-monitoring; the Taiwan Citizen Front's pivot to voter-mobilisation in the 2026 Nine-in-One election-cycle; Kuma Academy and Forward Alliance's continuing operationalisation of the Whole-of-Society Defence Resilience Committee framework's civil-defence-training and counter-disinformation tracks; and the broader civil-society coalition's continuing engagement with the post-March 2025 Ten Measures implementation. The post-2014 Sunflower-Movement-lineage civil-society architecture has thus continued to operate as a force in the Taiwanese political-institutional landscape, with the 2026 Nine-in-One election cycle as the next institutional-test point.

10. The Constitutional-Court Justice-Confirmation Paralysis and the Eight-Justice-Bench Continuation

10.1 The post-March 2025 renomination and non-confirmation chronology

The Constitutional Court Justice-confirmation paralysis — the LY's continuing KMT-TPP-led refusal to confirm Lai's renominations to the Justice vacancies — has continued through Year Two, sustaining the eight-sitting-Justice constitutional-court configuration that the 28 March 2025 Constitutional Judgment No. 2 of 2025 (114年憲判字第2號) [TBD-VERIFY exact case number and date] partial-strike-down of the Constitutional Court Procedure Act amendment restored to operative functionality. The Lai government's renomination chronology across Year Two has included multiple tranches of revised candidate slates submitted across mid-2025 and early-2026 [TBD-VERIFY exact renomination dates, the named-candidate rosters, and the LY-vote-confirmation outcomes for each tranche — published reporting through Liberty Times, China Times, United Daily News, the Office of the President archive, and the Judicial Yuan archive should be referenced].

The KMT-TPP-articulated position on the renomination non-confirmation has continued to centre on three principal grounds: (a) the ideological-balance objection, with the KMT-TPP working majority arguing that Lai's renomination tranches have failed to include candidates with demonstrable cross-ideological or KMT-affiliated jurisprudential pedigree; (b) the judicial-independence-credential objection, with the KMT-TPP working majority arguing that selected named nominees have prior DPP-affiliation or have publicly articulated political positions deemed by the LY caucuses to compromise judicial independence; (c) the procedural-deliberation objection, with the KMT-TPP working majority arguing that the renomination tranches have not been accompanied by sufficient Office-of-the-President consultation with the LY caucuses about the named candidates' qualifications and constitutional-jurisprudential positions.

The DPP-Executive-Yuan position on the non-confirmation pattern has continued to centre on the constitutional-disablement framing, with the Executive Yuan and the DPP-LY-Caucus arguing that the LY's non-confirmation pattern constitutes deliberate constitutional-disablement of a co-equal branch under cover of credential-objection framings. The Office of the President has continued to operationalise the renomination process through repeated tranche submissions.

10.2 The eight-Justice-bench operational adjudication record

The eight-Justice-bench operational adjudication record across Year Two — under the 28 March 2025 Judgment No. 2 of 2025 partial-strike-down restoration to operative functionality — has covered multiple constitutional-disputes across the LY-passed-legislation and Executive-Yuan-referred-policy categories [TBD-VERIFY specific Year Two Constitutional Court adjudication-record across the eight-Justice-bench — published reporting through the Judicial Yuan archive, the Liberty Times legal-affairs section, and the academic legal-commentary literature should be referenced for the definitive Year-Two-adjudication-record table]. The eight-Justice-bench has operated under the constraint that the unconstitutionality-finding threshold under the operative Constitutional Court Procedure Act post-Judgment-No.-2-of-2025 framework requires a specified threshold of the eight sitting Justices voting in the affirmative; the operational-implication has been that contested-constitutional-question adjudications have proceeded with constrained majoritarian capacity relative to the pre-December 2024 fifteen-Justice-bench framework.

11. The Lai Approval-Rating Trajectory and the Three-Account Year-Two Reading

11.1 The Lai approval-rating trajectory across May 2024 – May 2026

The Lai Ching-te approval-rating trajectory across the May 2024 – May 2026 window has moved through three distinguishable phases. Phase 1 — the post-inaugural elevated-approval phase across May–October 2024 — registered satisfaction in the 50-per-cent range across the TPOF (Taiwanese Public Opinion Foundation), TVBS, ETtoday, and My-Formosa monthly tracking polls, reflecting honeymoon-period dynamics and the cross-Strait-stability bonus from the 20 May 2024 inaugural. Phase 2 — the post-October-2024-constitutional-court-paralysis-and-January-2025-budget-cut decline phase across November 2024 – March 2025 — registered satisfaction in the 35–40-per-cent range, reflecting the constitutional-procedural-and-fiscal confrontation dynamics. Phase 3 — the post-March-2025-Foreign-Hostile-Force-designation-and-post-recall stabilisation phase across April 2025 – May 2026 — has registered satisfaction in the 38–45-per-cent range [TBD-VERIFY exact monthly-tracking-poll readings — the TPOF, TVBS, ETtoday, My-Formosa, and TISR (Taiwan Indicators Survey Research) monthly tracking-poll archive should be referenced for the definitive month-by-month table].

The approval-rating-stabilisation in Phase 3 is structurally significant. It reflects the operational delivery of the post-March 2025 cross-Strait-resilience architecture (the Ten Measures, the Whole-of-Society Defence Resilience Committee operationalisation, the FY2026 budget-deliberation outcome), the post-recall political-environment normalisation, and the operational continuity of the Lai-cabinet ministerial-portfolio configuration. It also reflects the structural constraint that approval-rating-recovery toward the post-inaugural 50-per-cent range remains improbable under continuing KMT-TPP working-majority LY conditions.

11.2 The DPP / civil-society democratic-resilience account

Account (a), the DPP / civil-society democratic-resilience account, positions Year Two as evidence that the post-2000 alternation pattern has produced an institutional framework capable of absorbing sustained KMT-TPP-working-majority pressure, sustained cross-Strait pressure, and sustained Trump-2 transactional pressure without structural rupture. The account's principal evidentiary anchors: the post-recall constitutional-impasse continuation under conditions where the executive branch has maintained operational governance capacity despite the eight-Justice-bench paralysis; the FY2026 budget-passage outcome under conditions where the defence-spending tranche was preserved; the cross-Strait-resilience-architecture operationalisation across the post-March 2025 Ten Measures and the post-2025 Whole-of-Society Defence Resilience Committee framework. The account's principal articulation: Shelley Rigger across multiple Brookings Order from Chaos commentaries; Lev Nachman across post-2024 Foreign Affairs and Foreign Policy commentaries; Richard Bush across post-2024 Brookings commentaries.

11.3 The KMT-TPP institutional-balance-and-cross-Strait-pragmatism account

Account (b), the KMT-TPP institutional-balance-and-cross-Strait-pragmatism account, positions the same record as evidence that the LY's constitutional-supervision authority over executive power has been legitimately exercised. The account's principal evidentiary anchors: the failed Great Recall electoral validation of the post-2024 KMT-TPP working coalition's electoral standing; the October 2025 KMT chair-tenure renewal positioning the party for 2026 Nine-in-One competitive recovery; the post-2025 KMT-LY-Caucus and TPP-LY-Caucus legislative coordination architecture sustained through the September–December 2025 FY2026 budget-deliberation cycle. The account's principal articulation: the KMT-Central-Standing-Committee statements across the post-October 2025 chair-tenure; the China Times and United Daily News editorial-line commentary across 2024–2026; KMT-Caucus-Convener Fu Kun-chi's post-2024 press engagements; selected KMT-affiliated academic commentary including the post-2024 commentary at the National Chengchi University Centre for International Relations.

11.4 The non-partisan-academic structural-reading account

Account (c), the non-partisan-academic structural-reading account, positions the post-2024 architecture as a stress-test of post-2000-alternation institutional resilience under conditions of sustained external-and-internal pressure. The account's principal evidentiary anchors: the comparative-democratic-cohabitation framework drawing on the French Fifth Republic cohabitation precedents (1986–1988 Mitterrand-Chirac; 1993–1995 Mitterrand-Balladur; 1997–2002 Chirac-Jospin), the South Korean post-2008 divided-government experience, and the 2000–2008 Chen-era divided-government baseline; the post-2024 institutional-architecture stress-test under conditions of (i) sustained PRC grey-zone-pressure, (ii) Trump-2 transactional US-Taiwan dynamics, and (iii) minority-government-versus-legislative-majority structural confrontation; the Year Two equilibrium as the analytical baseline for the November 2026 election cycle and the broader 2026–2028 trajectory. The account's principal articulation: Kharis Templeman across the Hoover Institution Project on Taiwan in the Indo-Pacific Region; Wen-Ti Sung across Atlantic Council and Australian National University commentary; selected post-2024 academic literature including Lev Nachman's Taiwan: A Contested Democracy under Threat (Polity, 2024) and the post-2024 follow-on academic literature.

11.5 The integrative assessment

The integrative assessment positions Year Two as a sustained-equilibrium configuration rather than a structural realignment. The principal structural variables operating across the Year Two equilibrium: the post-13 January 2024 LY arithmetic (KMT 52 / DPP 51 / TPP 8 / non-partisan 2) sustained through the post-recall window with minimal alteration; the post-2022 cross-Strait pressure architecture continuing at elevated tempo without crossing into kinetic-conflict thresholds; the post-January 2025 Trump-2 administration US-Taiwan relationship operating across multiple negotiating-and-cooperation tracks without producing either structural break or formal-allied-relationship upgrade; the post-2024 DPP-cabinet ministerial-portfolio configuration operating under continuing Cho Jung-tai premiership with selective reshuffles. The forward-trajectory determinants: the November 2026 Nine-in-One election cycle, the FY2027 budget cycle (opening September 2026), the Trump-2 negotiating-track outcomes (with the post-2025 tariff-settlement question and the Section 232 semiconductor-tariff-question outcomes both pending through May 2026), the cross-Strait pressure trajectory, and the early 2028 presidential-positioning calculus.

12. Conclusion — Forward View through the November 2026 Nine-in-One Election Cycle and Year Three

The Lai Ching-te (賴清德) administration's Year Two (May 2025 – May 2026) operated under structural conditions essentially unchanged from the inheritance from Year One. The May–August 2025 Great Recall (大罷免, Da Bamian) civil-society campaign — which had appeared during its stage-one and stage-two petition-mobilisation phases to be the principal candidate-event for restoring an operative DPP-or-coordination working majority in the LY — concluded with substantially weaker stage-three vote-day outcomes than the petition phases had foreshadowed, leaving the post-13 January 2024 KMT-TPP-plus-two-non-partisan working majority of 62 of 113 LY seats essentially intact through the May 2026 cut-off. The October 2025 Kuomintang chair-election produced a new chair-tenure operating in a sharply intensified strategic-confrontation posture toward the Lai administration. The September–December 2025 FY2026 Central-Government-Budget cycle concluded with budget reductions and freezes more modest than the January 2025 FY2025 sequence, reflecting both the post-recall political environment and the post-March 2025 cross-Strait-resilience-budget commitments. Vice President Hsiao Bi-khim (蕭美琴) operationalised across Year Two a Vice-Presidential portfolio anchored in international diplomacy, cross-Strait resilience, and 2028-presidential-trajectory positioning. The Trump-2 US-Taiwan trade-negotiating-track continued under Vice Premier Cheng Li-chiun (鄭麗君) and the Office of Trade Negotiations through the post-April 2025 reciprocal-tariff pause-and-extension cycles, with the Section 232 semiconductor investigation operating as the parallel-track instrument and the TSMC Arizona-Kumamoto-Dresden expansion narrative providing the Taiwan-side procurement-offer enhancement architecture. The post-March 2025 Foreign Hostile Force designation and the Ten Measures implementation package continued through Year Two operationally, with the post-2025 Strait Thunder-2025A/B exercise tempo and the post-2025 subsea-cable incidents producing a normalised-elevated-grey-zone-pressure pattern.

The forward view through the November 2026 Nine-in-One election cycle and Year Three operates across four principal trajectory variables.

The first variable is the 21 November 2026 Nine-in-One local election cycle, in which the six special-municipality mayoralties (Taipei, New Taipei, Taoyuan, Taichung, Tainan, Kaohsiung), thirteen county-magistrate and city-mayor races outside the special municipalities, the special-municipality and county-and-city councils, the township-and-rural-district mayoralties, the township-and-rural-district councils, the village-and-borough chiefs, and the special-municipality indigenous-district council positions all stand for re-election. The 2022 Nine-in-One election produced a KMT 13-mayoralty / DPP 5-mayoralty / TPP 1-mayoralty (Hsinchu City) baseline; the 2026 cycle will revisit this baseline under the post-recall and post-October 2025 KMT chair-tenure political environment.

The second variable is the FY2027 Central-Government-Budget cycle, opening with the Executive Yuan submission in September 2026 and proceeding through the LY deliberation cycle across the autumn-and-winter 2026 window. The FY2027 cycle will operationalise the post-FY2026 defence-spending trajectory under continuing Trump-2 administration pressure, with the question of whether the defence-spending-to-GDP ratio escalates further beyond the FY2026 3.3–3.4-per-cent baseline as the principal fiscal-and-strategic variable.

The third variable is the Trump-2 negotiating-track outcomes, with the post-April 2025 reciprocal-tariff settlement, the Section 232 semiconductor-specific tariff structure, and the post-2025 FMS-pipeline package architecture all pending through May 2026. The forward-trajectory will be shaped by the second-half-2026 Trump-2 administration policy-trajectory across the broader US-China economic-and-strategic relationship, with the Taiwan-specific dynamics operating within the broader US-China architecture.

The fourth variable is the cross-Strait pressure trajectory under the post-2025 Strait Thunder and post-2025 Joint Sword PLA exercise architecture, the post-2025 subsea-cable-incident pattern, and the broader post-Davidson-Window 2027-conflict-risk-assessment framework. The forward-trajectory will be shaped by the PRC's post-2025 Taiwan-policy-trajectory under continuing Xi Jinping leadership, the post-2025 PLA modernisation-and-readiness trajectory, and the broader US-China strategic-relationship dynamics.

The integrative forward-view positions Year Two as the institutional baseline against which the November 2026 Nine-in-One election cycle and the broader 2026–2028 trajectory operate. The sustained-equilibrium configuration of Year Two — neither structural rupture nor structural realignment — provides the analytical baseline for the post-2026 trajectory. The DPP / civil-society democratic-resilience account, the KMT-TPP institutional-balance-and-cross-Strait-pragmatism account, and the non-partisan-academic structural-reading account all converge on the November 2026 Nine-in-One election cycle as the next confirmable inflection point. The early 2028 presidential-positioning calculus — with Chiang Wan-an, Lu Hsiu-yen, and Hou You-yi on the KMT side, Hsiao Bi-khim on the DPP side, and the post-Ko-Wen-je-trial TPP positioning all operating in parallel — provides the broader strategic-political horizon within which Year Three of the Lai administration will operate.

The Lai administration's Year Two has thus closed at a sustained-equilibrium configuration, with the institutional architecture of post-2000-alternation Taiwanese democratic government having absorbed the most-intensive post-democratisation legislative-majority pressure on a sitting executive, the most-intensive post-2022 cross-Strait pressure, and the most-significant post-1979 US-Taiwan-policy reset, without structural rupture. The forward-trajectory through Year Three and the November 2026 Nine-in-One election cycle will operationalise the next phase of this institutional-stress-test.