A bipartisan group of 37 US lawmakers urged Taiwan's parliament to approve a proposed multi-billion dollar defense spending package, warning that the threat from China "has never been greater."

Taiwanese President Lai Ching-te had proposed a $40 billion (€33.72 billion) additional defense spending last year, but the proposal was stalled in the opposition-led parliament.

China looking to control Taiwan, say US lawmakers

In the letter released on Thursday and addressed to parliamentary speaker Han Kuo-yu and party leaders, including the Kuomintang (KMT) and Taiwan People's Party (TPP), the US lawmakers said Beijing was intensifying pressure on the island and called for higher defense outlays in line with President Lai's proposal.

"The threat posed by the People's Republic of China against Taiwan has never been greater. [Chinese President] Xi Jinping is focusing every element of the PRC's national power to control Taiwan," the letter warned, calling for a significant increase in Taiwan's defense spending.

The opposition has forwarded its own smaller defense proposal, which included funding for only part of the planned US arms purchases.

The TPP released a statement saying that it understood the US concerns but added that spending requests had to be subject to democratic oversight and fiscal responsibility.

US-Taiwan deal to lower tariffs, deepen tech cooperation

Meanwhile, Taiwan and the US signed a trade agreement on Friday aimed at lowering tariffs and deepening high-tech cooperation.

"This is a new chapter for Taiwan's foreign trade," Taiwan's President Lai Ching-te said. 

Under the deal:

• US tariffs on Taiwanese goods will be capped at 15%
• US exporters granted preferential access to Taiwan's industrial and agricultural market,
• Taipei will purchase $44.4 billion in US liquefied natural gas and crude oil
• Taiwanese semiconductors and related products will receive preferential treatment in the US

President Lai said the deal would integrate Taiwan's semiconductor and information and communications technology industries with the US artificial intelligence sector.

The agreement still needs to be approved by Taiwan's parliament.

Edited by: Sean Sinico