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Donald Trump’s return to the White House poses existential questions for Nato. Divisions in the west over how to deal with the Russia-Ukraine war have figured prominently since Trump won re-election. But it is transatlantic burden-sharing that could be Nato’s biggest concern.
During his first term of office, Trump was unabashed in his criticisms of the transatlantic alliance. Boiled down to one key message: Nato, Trump argued, was a club of “delinquent” allies leeching off the generosity of the United States.
Previous American presidents had levelled similar charges. But Trump was unusual in spelling out the consequences. America’s commitment to Nato’s collective defence mission, he insisted, couldn’t be taken for granted if the allies failed to increase their defence budgets.
The allies responded with significant increases in defence spending. These moves were spurred as much by worries over Russia as by Trump’s prodding. But Trump took the credit – and the allies and the then Nato secretary general, Jens Stoltenberg, were more than willing to give it. Seduced by such flattery, Trump thus became Nato’s champion.
Allied defence budgets continued to grow during Joe Biden’s term of office. Nonetheless, during the presidential election campaign, Trump reprised his Nato scepticism. He would, he asserted, encourage the Russians to do “whatever they hell they want” to any Nato members not paying their bills. Following his re-election in November, Trump made clear he wanted those bills to increase, insisting at a press conference on January 7 that 5% of GDP should be Nato’s new defence spending target. For context, in 2014, Nato set a 2% figure with a target date of 2024 to reach it.
Trump’s demands have galvanised Nato’s politics. Allied foreign ministers have reportedly already discussed a new interim spending target of 2.5%, with 3% as a benchmark to be reached by 2030. This plays well with big defence spenders such as Poland and the Baltic States, but is out of reach for countries such as Italy and Spain which have already struggled to keep pace with the increases. Even Europe’s big hitters – Germany and France – would struggle given budgetary pressures and, in Germany’s case, legal limits on deficit spending.
Trump’s Nato agenda also poses a particular difficulty for the UK. Keir Starmer has talked of a “Nato first” defence policy and a “cast-iron commitment” to increase the UK defence budget. Yet, in cash terms, the UK’s position has been increasingly wanting. In 2014, the UK was ranked third among the Nato allies by the share of GDP dedicated to defence. But Nato estimates for 2024 place it ninth. During that ten-year period, UK defence spending increased by 20% in real terms, well behind the NATO-Europe average of 54%.
In April 2024, the previous Conservative government pledged to increase the GDP share given over to defence (including spending on Ukraine), planning to hit 2.5% by 2030/31. The Labour government has retained the target, but has not set a timeline to achieve it. A strategic defence review due to report by mid-year will outline the security challenges facing the UK, but according to the chancellor of the exchequer, Rachel Reeves, there is no guarantee this will result in a spending boost.
In any case, Trump’s demands already make the 2.5% figure look inadequate. Trump’s demands aside, 2.5% is insufficient to fully fund the planned modernisation of the UK’s military (including the expense of maintaining the British nuclear deterrent) as well as the British commitment to Nato‘s defence plans.
The road to The Hague
Many observers have written off Trump’s presumptive foreign policy as bluster. This characterisation may be true of his threat to annex Greenland, for example, but on allied defence spending, Trump has articulated a consistent and logical argument. The gap between Trump’s demands and the allies’ abilities could make Nato’s next summit in The Hague in June 2025 a stormy affair.
The 5% figure seems to be Trump’s opening gambit. He may settle for less. But the next US president is likely to want a concrete figure and timeline. At Nato’s Brussels summit in July 2018, he came close to announcing an American exit from the alliance. Trump could well do the same in 2025 if he perceives there is reluctance to share the financial burden.
In the short term, the allies have limited options. Immediate, large-scale increases of defence budgets are politically and economically impossible for the majority of member states. Alternatives, such as a relaxation of EU fiscal rules to boost defence budgets through increased borrowing or the generation of greater EU-level defence funding are unlikely to gain traction. Divisions among EU members and the resistance of the European Central Bank stand in the way.
In the longer term, capability shortfalls and a reliance on American strategic leadership mean the Europeans have no workable Nato-wide alternative to fall back on should Trump order a US withdrawal or a downsizing of its commitment. The EU, for all the language of “strategic autonomy”, is not yet that body – and, in any case, it excludes several big Nato allies, including the UK, Canada, Norway and Turkey.
The allies are thus stuck in a relationship of defence dependency, exposed to Trump’s foibles. They may simply have to fall back on the approach they used during Trump’s first term – flattery and flexibility. One reason the allies chose the former Dutch prime minister Mark Rutte as the new head of Nato was because of his reputation as a “Trump whisperer”.
Trump, Rutte has noted, “is extremely clear about what he wants”. But it’s becoming increasingly obvious that the vague formula agreed at the July 2024 Washington summit to increase defence expenditure “beyond 2% of GDP” is probably not it.
Mark Webber is affiliated with the NATO Defence College in Rome as a Senior Non-resident Fellow.
