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Presented by Lockheed Martin — The U.S. spends around 3 percent of economic output on defense

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Defense &
National Security

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The Big Story

Unpacking Trump’s push for NATO allies to spend 5 percent on defense

President Trump’s demand follows his more aggressive rhetoric against the western security alliance, but key questions remain.

Trump told the World Economic Forum in Davos, Switzerland, on Thursday about the new target of spending 5 percent of economic output on defense.

He said 5 percent “is what it should have been years ago.”

“It was only at 2 percent,” Trump said, and “the United States was really paying the difference at that time, and it was unfair to the United States.”

Trump has long pushed for NATO allies to spend more and to exceed what most U.S. leaders have pushed for, which is a 2 percent target.

The U.S., which spends around 3 percent on defense, will also have to dramatically increase the Pentagon budget to reach Trump’s target.

European allies have traditionally relied on the U.S. for defense needs, but NATO leaders and Washington have pushed for years to change that.

The war in Ukraine has also spurred European nations to spend more amid fears of Russian aggression.

Dean Baker, a co-founder of the Center for Economic and Policy Research, said if Russia were to spend 6 percent of its economy on defense, NATO European allies would exceed Moscow by 50 percent if they met the 2 percent benchmark.

“They collectively will be spending more than enough to fend off any threat from Russia,” he wrote earlier this month. “A higher level of spending may be desirable from the standpoint of US military contractors, who would likely be beneficiaries of additional NATO spending, but this has nothing to do with the European countries’ defense needs.”

The Financial Times reported last month that Trump could be placated with a 3.5 percent target.

European allies may be spurred to meet Trump’s demands after he said last year he would let Russia attack any country that doesn’t pay up.

NATO Secretary General Mark Rutte agreed with Trump in Davos on Thursday, saying the “problem is Europe” underspending on defense.

“I can guarantee you, when you look at the incoming data now, 2 percent is not nearly enough,” he said. “It will be much more, really much more, and that will have a huge impact.”

Rutte said allies who have not met the 2 percent target must do so quickly, and then the alliance will collectively decide the exact number for the higher benchmark.

Last year, 23 allies of the 32-member alliance met the 2 percent target, the highest on record.

In the U.S., leading Republicans like Sen. Roger Wicker (Miss.), chair of the Senate Armed Services Committee, have called to increase defense spending to 5 percent.

But the Quincy Institute for Responsible Statecraft this month warned a defense surge would “dramatically grow” the federal debt and “would significantly increase the risks to the country’s long-term economic growth” because there is no realistic way to pay for it.

Read more NATO coverage at TheHill.com.

Welcome to The Hill’s Defense & National Security newsletter, I’m Brad Dress — your guide to the latest developments at the Pentagon, on Capitol Hill and beyond.

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On Our Radar

Upcoming things we’re watching on our beat:

The Senate is expected to vote Friday night on Defense Secretary nominee Pete Hegseth.
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Branch out with a different read from The Hill:

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Kash Patel, President Trump’s nominee to lead the FBI, is expected to appear before the Senate Judiciary Committee on Thursday. Patel held numerous national security roles during the first Trump administration but would be a new face at the FBI. Patel regularly attacks a “deep state” he blames …

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On Tap for Monday

Events in and around the defense world:

The Center for Strategic and International Studies unpacks Huawei and its geopolitical implications for a 9 a.m. online event.
The 2025 Washington China Forum runs Monday and Tuesday in Washington.

What We’re Reading

News we’ve flagged from other outlets:

Trump moves to close Pentagon office focused on curbing civilian deaths (The Washington Post)
Hamas has added up to 15,000 fighters since start of war, US figures show (Reuters)

Trending Today

Two key stories on The Hill right now:

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