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Australia is standing firm on defence spending targets despite European nations vowing to rapidly ratchet up expenditure under pressure from United States President Donald Trump.
On the sidelines of the NATO summit in the Netherlands, Defence Minister Richard Marles said Australia would decide its own spending levels to meet its own military needs.
That risks drawing a rebuke from Trump, who made clear he expects allies to drastically step up to reduce their reliance on the US.
NATO countries, of which Australia is not a member, agreed to increase defence spending targets to 5 per cent of GDP.

However, Spain refused prompting Trump to threaten to punish the Iberian nation with a tougher trade deal.

Donald Trump speaking at a podium with NATO signs in the background.

Donald Trump has long pushed for NATO allies to spend more on defence. Source: AAP / ANP/Sipa USA

“You know what we’re going to do? We’re negotiating with Spain on a trade deal and we’re going to make them pay twice as much,” he said.

“I think it’s terrible. You know, they (Spain) are doing very well … and that economy could be blown right out of the water when something bad happens,” Trump said, adding that Spain would get a tougher trade deal from the US than other European Union countries.

Australia is also seeking to negotiate a reprieve from tariffs imposed by the US on imports, including a 50 per cent levy on steel and aluminium.

‘That is fundamentally a matter for NATO’

Amid news of the defence-spending boost from NATO members, Marles maintained Australia would stick with its own defence spending process, which will see the nation’s share increase from two to 2.3 per cent by 2033/34.

“Look, obviously, a very significant decision has been made here in relation to European defence spending, and that is fundamentally a matter for NATO,” he said.

“We’ve gone through our own process of assessing our strategic landscape, assessing the threats that exist there, and the kind of defence force we need to build in order to meet those threats, to meet the strategic moment, and then to resource that.
“And what that has seen is the biggest peacetime increase in Australian Defence spending.
“Now that is a story which is, which is understood here and we’ll continue to assess what our needs are going forward. And as our prime minister has said, we will resource that.”

Marles did not speak directly with Trump, nor US Defence Secretary Pete Hegseth, despite intensive efforts by government officials to tee up a first face-to-face meeting of an Australian minister with the US president.

Trump hails NATO uplift as ‘great victory ‘

In a five-point statement, NATO endorsed the higher defence spending goal — a response not only to Trump but also to Europeans’ fears that Russia poses a growing threat to their security following the 2022 invasion of Ukraine.
The 32 allies’ brief communique added: “We reaffirm our ironclad commitment to collective defence as enshrined in Article 5 of the Washington Treaty — that an attack on one is an attack on all.”
Trump told a press conference that “we had a great victory here”, adding that he hoped that the additional funds would be spent on military hardware made in the US.
Asked to clarify his own stance on Article 5 after recent ambiguous comments, Trump said: “I stand with it. That’s why I’m here. If I didn’t stand with it, I wouldn’t be here.”

Trump had long demanded in no uncertain terms that other countries step up their spending to reduce NATO’s heavy reliance on the US

Despite an appearance of general agreement, French President Emmanuel Macron raised the issue of the steep import tariffs threatened by Trump, and the damage they may do to transatlantic trade, as a barrier to increased defence spending.
“We can’t say we are going to spend more and then, at the heart of NATO, launch a trade war,” Macron said, calling it “an aberration”. He said he had raised it several times with Trump.
NATO Secretary General Mark Rutte, who hosted the summit in his home city of The Hague, said NATO would emerge as a ‘stronger, fairer and more lethal’ alliance.

The former Dutch prime minister said Trump deserved “all the praise” for getting NATO members to agree on raising defence spending.

The new spending target — to be achieved over the next 10 years — is a jump worth hundreds of billions of dollars a year from the current goal of 2 per cent of GDP, although it will be measured differently.
Countries pledged to spend 3.5 per cent of GDP on core defence — such as troops and weapons — and 1.5 per cent on broader defence-related measures such as cyber security, protecting pipelines and adapting roads and bridges to handle heavy military vehicles.
The additional spending will be a tall order for European nations, many of which have strained finances.
Ukrainian President Volodymyr Zelenskyy had to settle for attending the pre-summit dinner on Tuesday evening rather than the main meeting on Wednesday, although he met Trump separately after the conference ended.
The Kremlin has accused NATO of being on a path of rampant militarisation and portraying Russia as a “fiend of hell” in order to justify its big increase in defence spending.
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