Americans are wearing biggest smiles in NATO defence spending battle
Everyone at NATO knows about battles.
Sometimes you come out on top and sometimes you have to know when you’re beaten. And here, it’s the Americans who are wearing the biggest smiles.
It has long been a mantra of President Trump that European nations should spend a lot more money on defence.
During his first term in office, when he seemed to be deriding NATO on a regular basis, he amplified a debate that had long rumbled; now it feels like it’s coming to a resolution.
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Hegseth: ‘Not here to discuss’ leaving NATO
Certainly there was a bounce in the step of US defence secretary Pete Hegseth when we spoke.
“We all need increased capabilities and we all need to spend more,” he said.
“Thank you to President Trump for reviving this alliance. It was an alliance that was sleepwalking to irrelevance and President Trump, in his first term, said you need to step up and spend more. And he has in this term done the same.”
“What I saw in there”, gesturing to the meeting rooms where all the ministers had met, “were countries prepared to step up to push the limits of what they can do. That’s a good thing. That’s friends helping friends.”
Pete Hegseth and NATO secretary general Mark Rutte at NATO headquarters in Brussels. Pic: AP
Mr Hegseth came into this meeting in Brussels with one big demand – for NATO allies to bump up their defence spending to a total of 5% of GDP – more than any of them are spending at the moment.
Of that, he believes that at least 3.5% should be going towards core defence spending – soldiers, planes, guns and so on – while a further 1.5% could be spent on other “defence-related” elements – infrastructure, espionage, civil defence.
Pot one is clear. Pot two is vague – nobody seems quite sure what counts as “defence-related”. Climate change resilience, for instance, has been suggested by some countries. That one will need clearing up.
But even the 3.5% demand is a huge one.
Over third of worldwide defence spending by US
According to the latest data I’ve seen, only one NATO member presently spends above that target – and no, that isn’t America.
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NATO spending targets explained
It’s Poland, which has ramped up military spending ever since neighbouring Ukraine was invaded. Lithuania, Estonia and Latvia have all done the same, nervously looking towards Russia.
The United States sits at 3.4% of GDP. But that’s 3.4% of a very big number, so it equates to an awful lot of spending.
To put that in context, more than a third of worldwide spending on defence is carried out by America.
Look at the top 10 nations in the world for defence spending, and America is top by a mile. It spends more than the other nine countries on that list put together.
What’s more, the vast majority of that money goes to American companies, and a great deal of it is shared among a relatively small number of those companies.
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Increased military spending may well be good for global security, but until such time as Europe expands its own defence industry, it’s also excellent news for the American economy.
Mark Rutte, the NATO secretary general, admitted that it was a huge challenge, but said that he would not accept countries simply kicking the financial can down the street.
Countries will be monitored constantly to ensure they are making annual progress towards the 5% target.
A finishing line hasn’t been established yet, but it’s probably going to be 10 years from now. Still, Rutte said he didn’t want “hockey sticks” – the statistical model where things stay flat for a long time, and the big rise only comes at the end.
Vladimir Putin told Donald Trump he “will not back down” from Russia’s goals in Ukraine during a phone call today, the Kremlin has said.
The Russian president spoke to his US counterpart for almost an hour, and Mr Trump “again raised the issue of an early end to military action” in Ukraine, Kremlin aide Yuri Ushakov told reporters.
In response, Mr Putin said “Russia will not back down” from its aims there, which include “the elimination of the well-known root causes that led to the current state of affairs,” Mr Ushakov said.
The phrase “root causes” is shorthand for Moscow’s argument that it was compelled to invade Ukraine in order to prevent the country from joining NATO.
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Trump and Putin’s latest call on Ukraine
Ukraine and its European allies say this is a pretext to justify what they call an imperial-style war, but Mr Trump has previously shown sympathy with Russia.
At the same time, Mr Putin told the US president that Russia is ready to continue negotiating, the aide said.
The Russian president said any prospective peace deal must see Ukraine give up its NATO bid and recognise his country’s territorial gains.
Volodymyr Zelenskyy, seen with Mr Trump in June, is pushing for Ukraine to join NATO. Pic: Reuters
He also briefed Mr Trump on agreements made last month, which saw Russia and Ukraine exchange prisoners of war and dead soldiers.
Specific dates for the third round of peace talks in Istanbul were not discussed – nor was the US decision to halt some shipments of critical weapons to Ukraine.
Mr Putin and Mr Trump’s call came after the Pentagon confirmed some weapons due to be sent to Ukraine have been held as it reviews military stockpiles.
The paused shipments include air defence missiles and precision-guided artillery, two people familiar with the situation have said.
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The decision led to Ukraine calling in the acting US envoy to Kyiv on Wednesday to underline the importance of military aid from Washington.
Kyiv also cautioned that the move would weaken Ukraine’s ability to defend itself against intensifying Russian airstrikes and battlefield advances.
Mr Putin and Mr Trump’s phone call was the sixth they have publicly disclosed since the US president returned to the White House in January.
Donald Trump’s ‘big beautiful bill’ has been passed by the US congress, sending it to the president to sign into law.
The controversial tax breaks and spending cuts package cleared its final hurdle as the Republican-controlled House of Representatives narrowly approved the bill with a 218-214 vote.
The bill delivers tax breaks Mr Trump promised in his 2024 election campaign, cuts health and food safety programmes, and zeroes out dozens of green energy incentives.
According to the nonpartisan Congressional Budget Office (CBO), it will lower tax revenues by $4.5trn over 10 years and add $3.4trn to the US’s $36.2trn debt.
But despite concerns over the 869-page bill’s price tag – and its hit to healthcare programmes – Republicans largely lined up in support, with just two rebelling on the vote.
House Speaker Mike Johnson is congratulated following the vote. Pic: Reuters
Every Democrat in Congress voted against the bill, blasting it as a giveaway to the wealthy that will leave millions of Americans uninsured.
House Speaker Mike Johnson made the Republicans’ closing argument for the bill, telling Congress: “For everyday Americans, this means real, positive change that they can feel.”
Earlier, the House’s Democratic leader Hakeem Jeffries gave a record-breaking eight-hour and 44-minute speech against it.
“The focus of this bill, the justification for all of the cuts that will hurt everyday Americans, is to provide massive tax breaks for billionaires,” he said.
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The bill’s spending cuts largely target Medicaid, the health programme that covers 71 million Americans on low incomes.
It will tighten enrolment standards, institute a work requirement and clamp down on a funding mechanism used by states to boost federal payments.
The changes could leave nearly 12 million people without health insurance, according to the CBO.
On the other side of the ledger, it will stave off tax increases that were due to hit most Americans at the end of the year, when tax cuts from President Trump’s first term were due to expire.
It also sets up new tax breaks for overtime pay, seniors and tipped income.
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The bill narrowly passed the US Senate on Tuesday after vice president JD Vance cast the deciding vote to break a 50-50 tie.
Mr Trump will sign it into law on Friday at 5pm local time (10pm in the UK), the White House said.
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