Trump ask of NATO members will trip on budget constraints

Trump would surely want the European members of NATO to undertake more security-building exercises rather than piggybacking on American military prowess.

In several policy statements, both before his re-appointment and immediately thereafter, the US President Donald J Trump has asked the North Atlantic Treaty Organisation (NATO) partner countries to cough-up 5 per cent of national GDP on defence instead of the present 2 per cent. His apparent grouse is that while the European members of NATO make diplomatic noise on conflicts and wars affecting their national and collective security, they under-spend and bandwagon on US bankrolling for fighting their wars. However, within and outside NATO, the theoretical question of 5 per cent of GDP on defence is debatable and unsustainable.

Even before President Trump started shouting out to the NATO members to increase their national defence budgets, NATO members were increasingly getting conscious about enhancing the same. As early as 2006, NATO defence ministers’ members had collectively resolved to raise their defence budgets to 2 per cent that had fallen down quite below due to the peace dividend moments in the post-Cold War period and relative peace in Europe. Yet, by 2014, only three countries could cross the threshold. NATO heads of state and government then resolved to raise the same to a definite 2 per cent, a decision propelled partly by Russian annexation of Crimea and the position in the Middle East.

Developments during Trump 1.0

Even during his first term, President Trump had nudged NATO partners to spend more since many of them were still spending less than 2 per cent. In 2019, he had hosted the 2 per centers from NATO group for lunch in which nine eligible NATO countries’ leaders had participated. NATO members had also agreed to a new cost-sharing formula for handling common defence issues. Accordingly, the US was placated with 16 per cent share, same as that of Germany.

US does NATO’s heavy liftings

By mid-2024, 23 out of NATO’s 32 members had crossed the 2 per cent benchmark. In addition, the collective average for the NATO countries on defence expenditure had risen to 2.71 per cent of the GDP. Nevertheless, Trump may have a legitimate grievance in nudging the NATO countries to open their coffers for defence. In 2024, all NATO countries spent $1185 billion (estimated). Out of this, the US alone spent $755 billion. Other NATO countries, including Canada, spent only $430 billion. In other words, the US alone accounts for 63.71 per cent of the cumulative defence expenditure. A major fall-out of this huge proportion is the institutionalised expectation from the US to shoulder major portion of expenditure in all conflict situations that involve non-NATO conflicts. In Afghanistan, for example, the US spent $2.31 trillion during two decades of active involvement. Other NATO members were happy playing a second fiddle to the US.

While Afghanistan is a passé, Ukraine remains a concern. According to a Fact Sheet provided by the US Department of State on 20th January 2025, the US has provided $65.9 billion in military assistance alone to Ukraine since February 2022. The cumulative amount paid in military assistance to Ukraine since 2014 works out to be $69.2 billion. Overall, the US has spent $175 billion so far in different types of aid packages to Ukraine since February 2022. While this huge aid package has sustained Ukraine’s resistance against Russian aggression so far, it also provokes the economic nationalist in Trump. He would surely want the European members of NATO to undertake more security-building exercises rather than piggybacking on American military prowess.

Is the 5 percent target realistic?

However, it is debatable if the NATO countries will rake-up their defence budgets to 5 per cent of GDP as counselled by Trump due to numerous factors.

First, there is no fixed or ideational portion of GDP being spent on defence budgets and there are different national practices. No clear benchmarking is available in the long-held ‘guns vs butter’ debate in academic circles. Warmongers advocate a higher portion of GDP on defence. Nevertheless, higher defence budgets only promote military Inc in many countries and lead to militarisation of international relations.

Even in the SIPRI Fact Sheet on ‘Trends in world military expenditure, 2023 (published in April 2024)’, only ten out of top 40 countries spend 3 per cent or more on defence expenditure.

Second, the post-Cold War atmospherics benefitted the European continent through an uninterrupted peace dividend moment. Low defence budgets allowed the European countries to invest in developmental activities. NATO was used to defray the defence expenditure through collective security approach. Most NATO countries would resist frittering away this opportunity.

Third, it has taken almost two decades of wide-level consultations and dialogue amongst NATO member countries to implement the 2 per cent benchmark on defence budget. Even now, countries like Croatia (1.81), Portugal (1.55), Italy (1.49), Canada (1.37), Belgium (1.30), Luxembourg (1.29), Slovenia (1.29) and Spain (1.28) spend less than the agreed benchmark of 2 per cent. Pushing the NATO countries to an artificial construct of 5 per cent would stress their developmental planning and may face stiff domestic resistance.

A marginal rise in spending is the most likely outcome

NATO countries, therefore, are unlikely to agree to Trump’s demand for such massive hike in their national defence budgets and may at best agree for some marginal rise in future. Defence ministers of Germany, France, Britain, Italy and Poland – the five largest defence spenders of NATO in Europe, met recently in Warsaw and concluded that ‘meeting Trump’s NATO spending target would be tough’. The German Defence Minister explained the problem when he said that for a country like Germany, ‘spending 5 per cent of the GDP on defence would mean spending over 40 per cent of its national budget on defence’. The hard truth for Germany is ubiquitous for other countries as well. It would eat up all resources meant for development!

In all probability, therefore, Trump’s clarion call for raising defence budget amongst NATO partner countries would remain a ‘cherished dream’. At best, these countries may agree for more defence burden sharing in future conflict situations and help the US save some precious penny!