U.S. Leverages NATO Rearmament to Expand Security Influence, Presses Asia and Latin America for Higher Defense Spending

NATO members unveil sweeping defense spending plans under U.S. pressure
Weakened European defense industrial base creates opening for U.S.-made weapons
Asia and Latin America also face Trump administration demands to allocate 3.5% of GDP to defense

The military buildup among North Atlantic Treaty Organization (NATO) members is gathering pace. As U.S. President Donald Trump continues to pressure allies to increase defense spending, European nations have begun rolling out large-scale budget increases and procurement plans centered on U.S.-made weaponry. Washington's expanding security influence is extending well beyond Europe, with growing implications for the security landscape across Asia and Latin America.

NATO's Defense Buildup Gains Momentum

According to Reuters and other foreign media reports on July 8 (local time), NATO leaders announced in the "Ankara Summit Declaration," adopted at the NATO summit in Ankara, Türkiye, that "we are unveiling more than USD 50 billion in new defense procurement plans while committing to accelerate innovation through expanded joint production capacity and industrial cooperation." The commitment is intended to fulfill the "Hague Defense Pledge" in response to Russia's long-term threat to Euro-Atlantic security and the persistent risk of terrorism. At the NATO summit held in The Hague, the Netherlands, in June last year, member states agreed, in line with President Trump's demands, to raise defense spending to 5% of gross domestic product (GDP) by 2035.

European governments also unveiled detailed implementation plans around the summit. Germany's cabinet approved its 2027 budget, raising core defense spending by 32.6% from USD 96.8 billion this year to USD 128.4 billion next year. The United Kingdom announced, together with 12 European allies, a project to jointly develop and manufacture next-generation long-range precision missile systems with a maximum range of 2,000 kilometers, backed by USD 50 billion in investment over the next decade. Canadian Prime Minister Mark Carney also underscored Ottawa's commitment to strengthening military capabilities by announcing the preferred bidder for the Canadian Patrol Submarine Project (CPSP) before departing for Türkiye to attend the summit.

President Trump openly criticized countries unwilling to follow the defense buildup. According to CNBC on July 8, Trump said during a joint press conference with NATO Secretary General Mark Rutte following the summit, "Spain is a terrible partner in NATO," adding, "I don't want to do business with Spain anymore. Cut off all trade with Spain, including visits." Spain was the only NATO member to reject the targets outlined in the Ankara Summit Declaration and secure an exemption agreement, while also ranking among the alliance's lower defense spenders. According to the Stockholm International Peace Research Institute (SIPRI), Spain's defense spending amounted to 2.1% of GDP last year. Later that day, speaking aboard Air Force One on his return flight from Türkiye, Trump claimed Spain had reversed its position after his trade threat, saying, "When I said we'd stop trade, Spain changed its attitude and became very generous," asserting that Madrid had accepted Washington's demand to increase defense burden-sharing.

Europe Embraces U.S. Weapons Systems

The United States is using NATO's expanded defense investment as a platform to reinforce its own strategic influence. A prime example is the joint decision by Denmark, Finland, Germany, and Norway to procure Northrop Grumman's U.S.-made MQ-4C Triton high-altitude, long-endurance unmanned aerial vehicles. The four countries announced on July 7 that they would jointly purchase up to five MQ-4C Tritons. The aircraft serve as intelligence, surveillance, and reconnaissance (ISR) platforms capable of monitoring naval vessels and submarines over extended periods and will be integrated into NATO's jointly operated reconnaissance fleet after delivery. On the same day, Germany's Rheinmetall signed a memorandum of understanding (MOU) with Lockheed Martin to jointly produce Army Tactical Missile Systems (ATACMS) in Germany.

Europe's growing acceptance of U.S. defense systems stems largely from the inability of its own defense industry to meet surging demand. In an interview with the Financial Times (FT) published on June 30, Rutte stated, "Europe and the United States both have strong defense industrial bases, but we have a production capacity problem," adding that "production bottlenecks causing delivery delays have led some European allies to purchase weapons outside NATO, particularly from South Korea." In a separate interview with The Wall Street Journal (WSJ) on July 5, he also noted that while military spending across Europe has surged, defense manufacturers have reached the limits of their production capacity.

These constraints are widely viewed as the result of Europe's "peacetime industrial structure," which evolved over more than three decades following the end of the Cold War. After the collapse of the Soviet Union, European countries steadily reduced defense budgets and weapons inventories, while domestic defense companies shifted away from maintaining mass-production facilities toward producing limited quantities of high-value weapons over extended manufacturing cycles. As a result, weakened production lines and critical component supply chains are effectively impossible to restore within a short period. The fragmented structure of Europe's defense market further limits production expansion. Unlike U.S. defense contractors, which operate large-scale production lines based on procurement from a single Department of Defense, European manufacturers must separately tailor production processes to accommodate smaller orders from multiple countries. Even when purchasing the same class of weapon, European governments often require different performance specifications, standards, and certification criteria. The European Commission estimates that this fragmentation and lack of cooperation generate tens of billions of dollars in unnecessary costs each year.

The Growing Pressure of the '3.5%' Target

Having intensified its push into the European defense market, the United States is now pressing other allies to increase military spending in pursuit of additional strategic and commercial gains. South Korea is a representative example. Following last year's U.S.-South Korea summit, Seoul agreed to raise defense spending to the U.S.-requested level of 3.5% of GDP as soon as practicable and to spend USD 25 billion on U.S.-made military equipment by 2030. In line with this policy, South Korea's defense budget for this year was finalized at approximately USD 49.4 billion, up 7.5% from the previous year. Japan also achieved its original fiscal 2027 target of raising defense spending to 2% of GDP ahead of schedule in fiscal 2025 and expanded its fiscal 2026 defense-related budget to approximately USD 73.3 billion. However, Tokyo has not officially accepted Washington's proposed target of allocating 3.5% of GDP to defense.

Latin American countries have also come under direct pressure from Washington. Speaking at the Conference of Defense Ministers of the Americas in Cusco, Peru, on July 8, U.S. Under Secretary of Defense Elbridge Colby said, "It is important that countries in Latin America invest more in their own defense," noting that "some countries spend less than 1% of GDP on defense." He added, "It makes no sense for countries facing narcoterrorism threats to constrain defense spending. Americans are dying in large numbers because of drugs entering the United States from Latin America and the crime associated with them." His remarks reflected Washington's view that cartel-related crime originating in Latin America has become a direct national security threat warranting greater defense investment. The United States also presented these countries with the same target of allocating 3.5% of GDP to defense.

Among Latin American nations, only Colombia—long engaged in conflict with insurgent groups and drug cartels—comes close to that benchmark, spending 3.2% of GDP on defense. Peru allocates just 0.9% of GDP, while Brazil spends 1.1%. Chile's defense spending stands at 1.58%, Bolivia's at 1.37%, and Mexico's at just 0.7%—only one-fifth of the U.S. target. Experts argue that Latin American governments are unlikely to accept Washington's demands immediately. One foreign affairs expert said, "Latin America faces relatively little risk of external military invasion, leaving governments with limited justification for significantly increasing defense budgets, while fiscal capacity is also constrained. Moreover, involving the military in national campaigns such as cartel suppression risks reviving controversies over corruption and human rights abuses associated with past military dictatorships."