TAIPEI (Taiwan News) — Taiwan’s divide between the ruling DPP and the opposition KMT is set to intensify next year, with defense spending and local elections testing the country’s political stability, Nikkei Asia reported.

When President Lai Ching-te (賴清德) took office in May 2024, he inherited an opposition-controlled legislature and mounting pressure from China. As 2026 approaches, the divide between Lai’s administration and an opposition bloc led by the KMT has only widened.

“I cannot see any possibility of a fundamental reconciliation or major compromises between the parties next year,” a former senior cabinet official said.

That warning looms over Lai’s push for a proposed NT$1.25 trillion (US$40 billion) special defense budget aimed at deterring China, as well as the government’s broader 2026 budget, which remains stalled in the legislature. Upcoming local elections, national security legislation, and a possible US-Taiwan trade deal to reduce tariffs are also expected to test the political system.

The confrontation has spilled into the judiciary, placing the Constitutional Court at the center of an intensifying power struggle. After months of paralysis, the court abruptly returned to action in mid-December, further inflaming partisan tensions.

For more than a year, the KMT and its smaller ally, the TPP, have sought to block much of Lai’s agenda. They have opposed defense and security plans and accused the president of mismanaging relations with Washington and other global partners.

Opposition leaders have even declined to attend national security briefings held by the administration, underscoring the depth of mistrust. Several foreign officials from countries across three continents have privately expressed concern about the impact of the standoff on Taiwan’s political stability and long-term security.

Taiwan has experienced a divided government before, most notably during former president Chen Shui-bian’s (陳水扁) tenure from 2000 to 2008. Analysts noted, however, that the challenge is now far sharper given China’s vastly expanded military and economic power and the KMT’s evolution on cross-strait issues.

Beijing underscored that pressure this week by launching large-scale military drills around Taiwan involving army, naval, air force and artillery units. The exercises, dubbed “Justice Mission 2025,” were widely seen as a warning to Lai’s administration.

Lai said defending Taiwan’s sovereignty and democratic system requires credible deterrence alongside cooperation with international partners.

“China’s ambition to annex Taiwan has never wavered,” Lai said, while stressing that Taipei seeks peace but must prevent Beijing from “making the wrong judgment.” He acknowledged domestic political obstacles, saying divisions are sharper because parties hold fundamentally different views of Taiwan’s identity.

The KMT, by contrast, frames Taiwan as part of a broader Chinese polity and argues that accepting the so-called 1992 Consensus would ease tensions. KMT Party Chair Cheng Li-wun (鄭麗文) accused Lai of endangering Taiwan’s future and denounced what she called “Taiwan independence fascism.”

TPP leader Huang Kuo-chang (黃國昌) echoed concerns about “indiscriminate” spending, warning against granting the government a “blank check.”

Behind the scenes, some former officials argue that while Lai may need to show flexibility on issues such as judicial appointments or energy policy, the opposition views every issue through the lens of political leverage.

The conflict has reached a critical point in the Constitutional Court, which opposition lawmakers effectively sidelined for nearly a year by raising quorum requirements. After the court struck down that change as unconstitutional, KMT legislators filed legal complaints against several justices and proposed measures to subject most rulings to public referendums.

Foreign diplomats say the lack of consensus on even basic questions of self-defense is increasingly alarming. One senior envoy said divisions over the special defense budget have made it harder for partners to assess Taiwan’s commitment to its own security.

Much may hinge on the local elections scheduled for late 2026, which will choose mayors, city councilors, and other officials. Political scientist Yen Wei-ting said the races will be the first major electoral test for party leaders since the last national polls and could shape whether Taiwan’s entrenched political confrontation begins to ease — or hardens further.