Donald Trump's first term saw US allies spend more on defence

Trump's actions are leading to rearmament

US President Donald Trump’s second term, like his first White House stint, may coincide with another phase of rearmament, which started with Russia’s invasion of Ukraine.

A Moneycontrol analysis of World Bank data shows that Trump’s first term (2017-21) saw a rise in defence spending of America’s allies, as the US president pushed NATO partners to spend more. China, Russia and the Arab world, however, spent less during the period.

But it might be different this time. On March 6, China announced a 7 percent rise in its defence Budget to $245 billion. Beijing's move comes amid rising tensions between the world's two biggest economies over trade, with rhetoric getting shriller by the day.

Two days earlier, the European Union proposed to borrow up to 150 billion euros  ($157.76 billion) for its rearmament push after Trump stopped aid to Ukraine. Trump has been vocal about Europeans footing a larger portions of defence bill even threatening to pull out of NATO.

During Trump’s first term, defence spending rose 3.65 percent of the GDP in 2020 from 3.4 percent in 2016 but declined to 3.4 percent in 2023.

The EU's defence spending rose from 1.33 percent in 2016 to 1.54 percent in 2020 as Trump’s first term winded down. The UK’s spending went up from 1.98 to 2.16 percent during the period.

Defence spending of America’s Asian allies also jumped during Trump’s first term. South Korea’s military expenditure rose to 2.8 percent from 2.46 percent and Japan’s to 1.02 percent from 0.93 percent in 2016.

India’s military spending also went up during the period — from 2.54 percent to 2.81 percent, World Bank data shows.

China, Russia and the Arab world’s defence spending dropped during the period. In the Middle East, Israel’s spending declined from 5.43 percent to 5.3 percent, while Arab countries spent 5.6 percent of GDP on defence in 2020 compared with 6.04 percent in 2016.

However, China, Russia and the Arab world witnessed a decline in spending. In the Middle East, Israel’s spending declined from 5.43 percent to 5.3 percent, while the Arab powers spent 5.6 percent of GDP compared with 6.04 percent in 2016.