Is Taiwan ‘a US sucker’? Weapons price gouging revealed on National Day
Taiwanese defence ministry blames manipulation by anti-US forces for claims published on mainland China’s most significant holiday
The price gouging came to light this year after a US federal audit of RTX, formerly Raytheon Technologies.
At the time, the clients were not identified but last week local media reports revealed that Taiwan was one of the affected buyers.
The reports indicated the Taiwanese military massively overpaid for its Leshan radar system in 2017 and the 2013 acquisition of the Patriot missile system.
The Taiwanese defence ministry acknowledged the revelations on October 1, saying the improperly gained funds would be returned, in line with a plea agreement reached between the US Justice Department and RTX.
In a statement, which did not include details of the specific contracts, the ministry denied it had tried to “conceal” or “cover up” the case and suggested the claims were aimed at harming the island’s security and its relationship with the US.
“Such false information coincides with China’s 75th National Day … It was released by a content farm with a specific purpose, clearly aiming to manipulate the ‘US scepticism theory’,” it said, referring to a narrative that the US is using Taiwan for its own interests.
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But critics argued that Taipei should have condemned the price gouging instead of remaining silent. Among them was political talk show host Jaw Shau-kong, who lashed the ministry and RTX in a Facebook post on October 3.
“RTX treated Taiwan like a sucker, earning hundreds of millions from the two procurement deals in 2013 and 2017,” he wrote, adding that Taipei appeared to have been kept in the dark for a decade.
“After the case was exposed by the media, instead of condemning RTX or thoroughly reviewing the procurement process, the ministry suggested it was part of [Beijing’s] cognitive warfare to promote ‘US scepticism’,” Jaw said.
“Facts are facts – if the ministry can’t face the truth and address the issue objectively, how will it be able to fight a war in the future?”
Jaw also criticised the ministry for trying to shift attention from the revelations by accusing others of pro-Beijing sentiment.
According to US media reports, the investigation into RTX began in October 2020 and focused on missile and defence contracts from 2011 to 2013, as well as a deal reached in 2017.
In June, Bloomberg said RTX had set aside US$306 million to cover penalties related to the overpricing. By July, The Wall Street Journal was reporting that RTX had agreed to pay US$1.24 billion in restitution to affected clients.
The amount was agreed in a settlement with the Department of Justice after RTX was found to have engaged in overcharging, bribery, and export control violations, according to the report.
Taiwanese lawmakers raised their concerns during a legislative meeting on Monday, pointing out that the island had bought various military equipment from RTX over the years and asking if there were any other overcharging incidents.
Legislator Wang Hung-wei, from the main opposition party Kuomintang (KMT), expressed surprise at the overpricing issue being characterised as cognitive warfare. “Isn’t it taxpayer money being used for procurement? Don’t taxpayers have the right to know?”
She added that while the KMT supported arms purchases from the United States, the government should speak up against improper charges and “shouldn’t act like a timid housewife to the US”.
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The government also faced criticism from its own side of the chamber, with Wang Ting-yu from the ruling, independence-leaning Democratic Progressive Party (DPP) saying the defence ministry had not been transparent enough.
“Although the arms procurement process may favour the seller, the ministry should strengthen its capabilities for price comparison, valuation, and investigation to avoid being taken advantage of in future deals,” he said.
In response, Taiwanese Defence Minister Wellington Koo said the island had asked the US to thoroughly investigate all procurement deals involving RTX to ensure no other irregularities were present.
“The US proactively investigated the case and informed us … No Taiwanese were found to be involved,” Koo said, adding that if the US had treated Taiwan as a “sucker” it would not have initiated the investigation or notified Taipei.
Koo told legislators that the island’s military deals with the US were signed under the foreign military sales programme, making Washington fully responsible for government-to-government contracts.
“If the investigation concludes that there was any fraudulent overbilling, we will hold the US government accountable and demand full reimbursement,” he said.
However, some observers suggested that Taiwan’s reliance on the US for its defence against a potential attack from the mainland had made the DPP government less inclined to speak up on arms sales issues.
Beijing views Taiwan as part of its territory and has vowed to reunite with the island, by force if necessary. It has also ramped up the pressure by staging war games around the island.
Like most countries, the US does not recognise Taiwan as an independent state but is opposed to any unilateral changes by force to the status quo and is committed to supplying the island with defensive weapons.
