Japan Institute for National Fundamentals

　
The Financial Times in its online edition on December 20 reported that U.S. President-elect Donald Trump urged North Atlantic Treaty Organization member states to increase their defense spending to 5% of gross domestic product (GDP) while continuing to provide military assistance to Ukraine. Trump thus suggested European countries in the face of Russian threats should not only rely on the United States for military support for Ukraine but share more burdens.

Trump urges European allies to raise defense spending to 5% of GDP

In 2014, NATO members set a goal of increasing defense spending to at least 2% of GDP by 2024. However, only 23 out of the 32 NATO members have achieved this goal. For this reason, NATO Secretary-General Mark Rutte has warned that current defense spending is insufficient to prepare for a future conflict with Russia. Citing the fact that European NATO members spent 4% of their GDP on defense during the Cold War, he has emphasized the need for higher levels of defense spending. NATO is currently considering a new goal of raising defense spending to 3% of GDP by 2030.

In light of these NATO trends, Trump has apparently urged that the goal be raised to 5% as 3% now under consideration is insufficient.

Then, how about the U.S. itself? Under the Democratic Biden administration, U.S. defense spending in fiscal 2024 totaled about $842 billion, equivalent to about 3% of U.S. GDP predicted at about $27,963 billion. On December 18, 2024, the U.S. Congress passed the National Defense Authorization bill for fiscal 2025 (October 2024 to September 2025). According to this bill, the total defense budget for fiscal 2025 will be $895 billion (about 139 trillion yen), the highest ever. The U.S. is working hard to increase defense spending in order to simultaneously counter threats emanating from situations in Ukraine, the Middle East, and China.

Japan is required to reverse its way of thinking

How about defense spending of Japan facing three nuclear-armed countries that aim to change the status quo by force, namely China, Russia, and North Korea?

In December 2022, the Fumio Kishida government approved three national security documents and defense spending of about 43 trillion yen over five years, setting a midterm target of raising annual defense spending to 2% of GDP (about 11 trillion yen) by fiscal 2027 in order to drastically enhance defense capabilities. In line with this midterm target, defense-related spending for fiscal 2024 is set at about 8.9 trillion yen, equivalent to about 1.6% of GDP. Japan’s defense spending, though having certainly increased compared to previous years, is far less than U.S. and NATO levels.

Therefore, the incoming Trump administration will naturally demand more defense spending by Japan than ever before.

In Japan, there is an argument that the government has no choice but to increase defense spending reluctantly because the Trump administration urges Japan to do so. Given that Japan faces threats from China and other countries, however, the idea of increasing defense spending at the behest of the U.S. is unreasonable. Rather, Japan, like the U.S. and NATO, should aim to achieve defense spending at 3% of GDP to not only enhance Japan's defense capabilities but also provide military assistance to Taiwan, the Philippines, Australia, and other countries. Given that GDP in 2024 is estimated at about 597 trillion yen, 3% of GDP comes to about 18 trillion yen, still about one-eighth of U.S. defense spending.

From the perspective of protecting the freedom and prosperity of the Indo-Pacific, Japan should change its way of thinking to view defense spending not only for itself but also for proactive contribution to peace.

Michio Ezaki is a member of the Planning Committee at the Japan Institute for National Fundamentals and a guest professor at Reitaku University.