Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
US President Donald Trump attends a meeting with NATO Secretary General Jens Stoltenberg ahead of the NATO summit in Watford, London, Britain, December 3, 2019.
Kevin Lamarck | Reuters
As US President Donald Trump seeks to immediately fix his biggest political and economic problems, the thorny issue of NATO’s defense spending is likely to return to the global stage soon.
Trump’s relationship with the Western military alliance has been strained during his first presidency, with the Republican leader frequently berating NATO allies for failing to meet a 2014 target of spending at least 2% of GDP on defense each year.
Ahead of his second term, Trump has made it clear that the debate over military spending — and Trump’s view that NATO members are overly dependent on the U.S. for their own security — will be back on the agenda, saying NATO’s 32 member nations should contribute more towards the defense.
“I think NATO should have 5% (of its GDP as a NATO target contribution).” – he said in January. “They can all afford it, but they should be at 5%, not 2%,” he said at a press conference in which he also refused to rule out the use of military force to seize the Panama Canal or Greenland — territory belonging to NATO member Denmark.
NATO members have seen significant increases in defense spending since Trump’s last term in office. In 2018, at the height of the White House’s exasperation with the military bloc, only six member states even met the 2% of GDP target.
On the contrary, NATO estimates that 23 members have reached the 2% target. in 2024 While some have exceeded this threshold—such as Poland, Estonia, the United States, Latvia, and Greece—major economies, including Canada, Spain, and Italy, are among those falling short of the threshold contribution.
No NATO member has met the 5% target proposed by Trump, including Washington under his predecessor Joe Biden’s administration.
Polish President Andrzej Duda fully supported Trump’s call for increased NATO spending, telling CNBC on Wednesday that it was “most important” is for Europe to return to Cold War defense spending to defend against the likes of Russia and its expansionist foreign policy.
“If we want to protect ourselves from this – and we Poles are determined to do so – we spend about 5% of GDP on defense this year. We recognize that we have to modernize our armed forces, we have to be strong and provide a real deterrent to deter Russian aggression,” he told CNBC’s Steve Sedgwick on Wednesday on the sidelines of the World Economic Forum in Davos, Switzerland.
Perhaps understandably, given that Poland borders war-torn Ukraine, Poland spends the largest share of GDP on defense compared to other NATO members. NATO 2024 estimates Last year, Warsaw spent 4.12% of GDP on defense.
New manager, old problems?
Former Dutch Prime Minister Mark Rutte, now NATO Secretary General, has only been in his new position for a few months, but he has already repeatedly called on member states to increase defense spending.
However, his priority is to get lagging countries to meet the 2% target, he said.
“Thankfully, thanks to Trump in his first term, we increased defense spending … but we all have to get to 2%,” he told CNBC’s Steve Sedgwick at the World Economic Forum in Davos on Thursday.
Countries that have not yet reached the required target “must reach 2% in the coming months. It needs to be done this year,” noted Rutte, who himself faced criticism over why the Netherlands’ defense spending fell far short of NATO’s target during his time in office.
Outgoing Dutch Prime Minister Mark Rutte addresses the media on the first day of the NATO 2023 summit on July 11, 2023. in Vilnius, Lithuania.
Amazing Anderson | Getty Images
Rutte said it was impossible to increase defense contributions, noting that European countries could afford to cut pensions, health and social security spending or raise taxes to increase defense spending.
“At the end of the day, it’s a rich place, in Europe we have (incredible) wealth … so we can do that with defense spending,” he said.
However, pressing domestic spending priorities – as European countries face high food and energy costs – are holding back regional governments’ ambitions to increase defense and security funding.
Dutch Prime Minister Deek Schoof told CNBC on Wednesday that spending 5% of national GDP on defense was a difficult task.
“I think it will be very, very difficult. And when I look at the consequences of such increases, it is almost impossible. I think the defense spending debate should also be conducted and discussed from a strategic perspective. (We) have to decide where we want to be with NATO … and then decide what kind of money we’re going to put in,” he told CNBC’s Dan Murphy.
Spending Limits
Sweden’s Finance Minister Elisabeth Svantesson said she had to balance the desire to increase defense spending with the need for economic growth, which has been a problem for much of Europe.
“It’s a very strong debate about how much (should be spent on defense), whether it’s 2% or 5% (of GDP). But the question is, from my point of view, we have to do what we have to do to protect ourselves and have a strong NATO, but it’s also a question of growth,” she told Dan Murphy in Davos on Wednesday.
“I am the finance minister … it depends on growth. First of all, we need growth in Europe, and then we need to know what we can do in terms of military spending,” she said.
Sweden, which joined NATO as its newest member in 2024, announced last year that it plans to increase defense spending to 2.4% of GDP in 2025 and 2.6% of the economy by 2028.
Swantesson said Trump’s view on the need to increase defense spending for NATO members “is fair because we have to do more in Europe,” but argued that some member states are not even meeting the 2% target and that NATO countries “with more and larger economies than Sweden,” more needed to be done.
Spain is likely to be a target for Trump’s wrath. European Commission are forecast to expand by 3%. for the country’s economy last year, but Spain only allocated 1.28% of its GDP to security in 2024.
Spanish Prime Minister Pedro Sanchez defended Madrid’s recordtelling CNBC in Davos that the country has been working hard to increase defense spending.
“Rest assured, Spain is very committed to this goal of 2% of GDP defense spending, but let me also say that in the last 10 years we have also increased our total defense spending by 70%,” he said on Wednesday. . “If we take these figures in absolute terms, we can say that Spain ranks 10thousand the main contributor to NATO”.
