At present, NATO sets a target for its member countries to allocate 2% of their GDP to defense spending. However, it’s noteworthy that out of the 32 NATO members, only nine meet this benchmark.
The Financial Times reveals that Trump’s administration has communicated to European officials a new demand—NATO countries should increase their defense spending to 5% of GDP. Alongside this, there’s also an intention to keep providing aid to Ukraine.
Despite the strong initial stance, the report suggests that the demand might not be as rigid as it seems. In fact, there appears to be some flexibility, with negotiations possibly settling at a defense spending goal of 3% to 3.5% to stave off the imposition of tariffs.
Looking ahead to the situation in Ukraine over the next year remains uncertain. Yet, when it comes to the potential tariff threats posed by Trump, they don’t seem quite as daunting. For Europe, reaching a compromise on this defense expenditure deal could be quite manageable, especially if it helps to eliminate the looming tariff threat for the next four years.
