Lai's remarks came after US President Donald Trump wrapped up a state visit to Beijing on Friday where Chinese President Xi Jinping had pushed him not to support Taiwan, which China claims is part of its territory.
Taiwan depends heavily on US security backing to deter China from carrying out its threat to annex the island by force.
"The United States' continued arms sales to Taiwan and deepening of Taiwan-US security cooperation are not only necessary but also key elements in maintaining regional peace and stability," Lai said in a statement on Facebook.
Lai insisted that Taiwan was at the "core" of global interests and "will never be sacrificed or traded away".
Trump has said since the summit ended that US arms sales to Taiwan "depends on China" and were a "very good negotiating chip for us".
The comments alarmed Taipei, which insists such sales are part of Washington's security commitment to the island.
Trump also warned Taiwan against making a declaration of independence.
"I'm not looking to have somebody go independent. And, you know, we're supposed to travel 9,500 miles to fight a war. I'm not looking for that," he told Fox News' "Special Report with Bret Baier".
"I want them to cool down. I want China to cool down," Trump said.
"We're not looking to have wars, and if you kept it the way it is, I think China's going to be OK with that."
The United States recognises only Beijing and does not support formal independence by Taiwan, but historically has stopped short of explicitly saying it opposes independence.
Under US law, the United States is required to provide weapons to Taiwan for its defence, but it has been ambiguous on whether US forces would come to its aid.
Lai said in his Facebook post that China was the "root cause of regional instability", and that Taiwan "will not provoke or escalate conflicts".
"It is the status quo we seek to defend; there is no so-called 'Taiwan independence' issue," Lai said.
Xi began the summit on Thursday with a warning on Taiwan. Lai considers the island already independent, making a declaration unnecessary.
The Chinese leader told Trump that missteps on the sensitive issue could cause "conflict".