NATO Agrees to Historic Defense Spending Hike to 5% of GDP by 2035

preCharge News POLITICS — NATO allies on Wednesday agreed to more than double their defense spending target from 2% of gross domestic product to 5% by 2035, in the most decisive move from the alliance in more than a decade.

United Front Against Russia and Terrorism

In a joint declaration, the Western military bloc said it was “united in the face of profound security threats and challenges,” particularly the long-term threat posed by Russia to Euro-Atlantic security and the “persistent threat” of terrorism.

“Allies commit to invest 5% of GDP annually on core defence requirements as well as defence-and security-related spending by 2035 to ensure our individual and collective obligations,” the statement continued.

The 5% figure includes “at least” 3.5% of GDP earmarked for “pure” defense, with the remainder going to security and defense-related critical infrastructure, intended to ensure civil preparedness, resilience, innovation, and a strong defense industrial base.

🆕 NATO Allies have agreed to invest 5% of their GDP annually in defence.

A substantial commitment in response to significant threats to our security#NATOsummit pic.twitter.com/eFgwH3pfrR
— NATO (@NATO) June 25, 2025

Annual Reporting Requirements

Allies must submit annual plans detailing credible, incremental steps toward achieving the target, NATO said. This decision comes after pushback from some member states, particularly Spain, who have yet to meet the previous 2% benchmark set in 2014.

Trump Pressure and Global Conflict Fuel NATO Action

U.S. Influence and Global Unrest

This historic shift comes amid ongoing tensions in the Middle East and the prolonged Russia-Ukraine war. It also reflects years of pressure from U.S. President Donald Trump, during both terms, for Canada and European allies to contribute more to NATO’s collective defense burden.

The alliance reaffirmed its “ironclad commitment” to Article 5, the mutual defense clause that has come under scrutiny amid questions about U.S. reliability.

(Article image: NATO Secretary General Mark Rutte addresses alliance leaders during the North Atlantic Council Plenary Session at the 2025 NATO Summit in The Hague. Photo by Brendan Smialowski - Pool/Getty Images) — (Article image: NATO Secretary General Mark Rutte addresses alliance leaders during the North Atlantic Council Plenary Session at the 2025 NATO Summit in The Hague. Photo by Brendan Smialowski – Pool/Getty Images)

“We remain united and steadfast in our resolve to protect our one billion citizens, defend the Alliance, and safeguard our freedom and democracy,” the statement read.

NATO Leaders Hail a “Quantum Leap” for the Alliance

Secretary General Mark Rutte on the Path Ahead

Speaking at the summit, NATO Secretary General Mark Rutte said the agreement marked a “quantum leap” in collective defense.

The deal would “not only increase our security but also create jobs,” he added, emphasizing that significant threats require significant commitments.

“Allies recognized the severity of the threats,” Rutte said. “We are united in understanding that we need to step up to stay safe.”

Trump’s Role and Rutte’s Praise

Rutte said President Trump reaffirmed America’s commitment to NATO while stressing that Europe and Canada must contribute more — a demand the alliance is now answering.

While noting that this is only “Day One” of the buildup needed, Rutte emphasized the need for rapid innovation and action.

“The decisions made today will make NATO much stronger, they also make NATO a fairer alliance. The resolve of allies is clear: we are in this together, committed to Article 5, and we are determined to stand firm.”

Asked about Trump’s role, Rutte said, “I think he deserves all the praise.”

Article 5 Commitment Reaffirmed Amid Trump’s Comments

Trump’s Remarks on Collective Defense

Arriving at the summit Tuesday, Trump appeared to question Article 5, saying, “There’s numerous definitions of Article 5. You know that, right?” He added that he’s committed to being friends with NATO leaders and “helping them.”

Rutte responded Wednesday, saying he trusted the president and reaffirmed that the U.S. is “totally committed” to the NATO pact.

“You know, Article 5 is absolutely clear, and at the same time we have always said that we will never go into details on when Article 5 will be triggered,” Rutte said.

Spain’s Reversal and Member Unity

Despite its initial hesitations, Spain now appears committed to the 3.5% goal, according to Rutte, who described Madrid as “serious.”

Summit Atmosphere: “Cool, Calm, and Collected”

Finland and Germany on NATO’s New Era

Describing the 2025 summit as a “rebalancing” of NATO, Finnish President Alexander Stubb told CNBC the summit had a “cool, calm and collected” atmosphere.

“There was a lot of self-congratulation which I think was deserved because in many ways this was a historic meeting of NATO going back to its roots of collective self-defense as a deterrent to Russia,” he said.

Stubb noted that both Trump and Rutte were pleased with the agreement, and “there were a lot of smiles around the table.”

“I think the Americans are happy and … the Europeans have woken up and smelled the coffee.”

Germany’s Renewed Leadership

German Foreign Minister Johann Wadephul praised the summit’s outcome and Spain’s change of heart: “At the end of the day, they knew one against 31 makes no sense.”

Wadephul also stressed Germany’s readiness to lead on European defense, stating, “The U.S. has recognized that Europe is back again.”