Trump gets NATO allies to spend 5% of GDP on defense, now must pay bills
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Days earlier, President Donald Trump had threatened Spain with new tariffs unless Madrid increased defense spending to 5 percent of GDP. Time will tell whether this tactic will be effective, but one thing is certain: The president has been far more effective at getting other nations to honor their commitments than he was in his first term. This fact is most evident when it comes to defense spending.
In 2006, America’s NATO allies agreed to spend 2% of their GDP on defense. After several years of little progress, the Obama administration signed an updated agreement in 2014 that everyone would meet that goal by 2024. But when Trump first took office in 2017, only five out of 28 countries had achieved this goal.
The president and his national security team, including me, were putting a lot of pressure on our allies at the time to honor their commitments. By 2021, the number of NATO members holding this meeting has doubled and the military spending of the allies has increased significantly.
President Donald Trump speaks with Secretary of State Marco Rubio at a news conference following the NATO Summit in The Hague, Netherlands, on June 25, 2025. On the agenda of the summit was a new defense investment plan that increased the defense spending target to 5% of GDP. (Omer Havana/Getty Images)
Let’s fast forward to 2025. Aided by the ongoing war in Ukraine and Europe’s fear of Vladimir Putin, Trump has achieved what many thought was impossible: Convince our NATO allies to spend 5% of their GDP on defense!
On the economic front, the White House has similarly persuaded other countries to honor past obligations when it comes to trade, using tariffs and other tools when necessary. This should be more evident when it comes to future trade talks with China.
The communist state has violated its obligations for decades and reneged on numerous agreements, from intellectual property theft to currency manipulation to unfair subsidies to Chinese companies. For example, during Trump’s first term, the PRC never purchased the $200 billion in additional US exports it promised.
China may be the country most notorious for reneging on its commitments, but it’s not the only one. Many of America’s friends are also guilty, especially when it comes to deals with US companies. I also saw this when I worked in the private sector.
That’s problematic enough that the House Appropriations Committee recently wrote in its August report on the Fiscal Year 2026 spending bill for national security, the State Department, and related programs that it “remains concerned about reports of trade disputes between United States agencies and host governments.”
The committee noted “particular concern” over “disputes concerning real estate seized, held or expropriated by foreign governments.” The report went so far as to call on the governments of the “Democratic Republic of Congo, Djibouti, Honduras, Kuwait and Mexico”.
Allegedly, Mexico’s state-owned oil company Permex owes $1.2 billion to American contractors. Kuwait is alleged to have failed to pay its financial obligations to the United States, including the Al Zour refinery, one of the largest oil refinery projects in the Middle East, where it failed to pay US and other contractors.
According to the State Department, many U.S. companies operating in Honduras “expressed concerns about politically motivated threats of criminal prosecution and expropriation of private assets.”
Secretary of State Marco Rubio speaks to the media at Ben Gurion International Airport as he leaves Tel Aviv for Qatar following an official visit near Lod, Israel, on September 16, 2025. (Pool Photo via Nathan Howard/AP)
The committee concluded its report by instructing Secretary of State Marco Rubio to “use a variety of diplomatic engagement tools to facilitate the timely resolution of such disputes.” Such action, of course, begins with America’s diplomats abroad.
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U.S. ambassadors already facing such issues in foreign capitals should pressure host governments at all levels. So are the people being offered to the Senate for such posts — starting with Amer Ghalib, who testified at a hearing on Thursday as America’s next ambassador to Kuwait (currently the only vacancy on the House Committee’s call list).
A separate congressional hearing on the broader issue of alleged backtracking on foreign governments’ deals with U.S. companies would also be very useful.
The administration has spoken appropriately about protecting U.S. jobs, preserving American innovation, and ensuring fairness when it comes to global trade and commerce. We have seen the president’s team act on these instincts. And given the business backgrounds of many in the administration, they certainly appreciate the challenges American companies face in resolving labor disputes with foreign governments.
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Applying the same focus and energy to helping U.S. firms resolve disputes with foreign governments, just as the president did this year by ensuring our NATO allies meet their spending commitments to strengthen the alliance, would go a long way in helping American companies and workers.
If our allies and friends want the benefits of partnership with the United States, they must also honor their commitments to our country, our businesses, and our people. This is another good way to put America first and promote U.S. economic growth and prosperity.
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