NATO leaders have agreed on a massive hike in defence spending after pressure from US President Donald Trump, and expressed their "ironclad commitment" to come to each other's aid if attacked.

Meanwhile on the sidelines, Australia, which is not part of NATO, announced new sanctions on Russia and new military support for Ukraine in its battle to fight off Russian President Vladimir Putin's invasion.

The 32 NATO leaders on Wednesday endorsed a final summit statement saying: "Allies commit to invest 5 per cent of GDP annually on core defence requirements as well as defence- and security-related spending by 2035 to ensure our individual and collective obligations".

Spain had already officially announced that it cannot meet the target, and others have voiced reservations, but the investment pledge includes a review of spending in 2029 to monitor progress and reassess the security threat posed by Russia.

The leaders also underlined their "ironclad commitment" to NATO's collective security guarantee – "that an attack on one is an attack on all". Ahead of the summit, Trump had again raised doubts over whether the United States would defend its allies.

Trump later insisted he supported article five of the NATO mutual defence pact, which classes an attack on one as an attack on all.

"If I didn't stand with it, I wouldn't be here," he said, having earlier said there were "numerous definitions of article five".

The show of unity vindicated NATO Secretary-General Mark Rutte's billing of the summit as "transformational", even though it papered over divisions. The spending pledge sets European allies and Canada on a steep path toward significant military investment.

The spending hike requires each country to spend billions of dollars. It comes as the United States — NATO's biggest-spending member — shifts its attention away from Europe to focus on security priorities elsewhere, notably in the Middle East and Indo-Pacific.

Trump called the agreement a "monumental win" for the US, saying it was something no one had thought was possible.

"We were carrying much more than our fair share, it was quite unfair, actually," he said.

"But this is a big win for Europe and for actually, Western civilisation".

Spain's stance and economic challenges

But ahead of the meeting, Spain announced that it would not be able to reach the target by the new 2035 deadline, calling it "unreasonable". Belgium signalled that it would not get there either, and Slovakia said it reserves the right to decide its own defence spending.

Trump described Spain's position as "terrible", pledging to make the country "pay it back" on trade, a possible reference to targeted tariffs.

"I'm going to negotiate directly with Spain," he said.

"I'm going to do it myself. They're going to pay. They'll pay more money this way."

Many European countries face major economic challenges, and Trump's global tariff war could make it even harder for America's allies to reach their targets. Some countries are already squeezing welfare and foreign aid spending to channel extra funds into their military budgets.

"There's a problem with Spain. Spain is not agreeing, which is very unfair to the rest of them, frankly," Trump complained on Sunday.

He has also criticised Canada as "a low payer". In 2018, a NATO summit during Trump's first term unravelled due to a dispute over defence spending.

Rutte conceded "these are difficult decisions" but "given the threat from the Russians, given the international security situation, there is no alternative".

"Let's be honest. I mean, politicians have to make choices in scarcity. And this is not easy," he said.

Australia announces new sanctions and aid

Australian Defence Minister Richard Marles said a Royal Australian Air Force E-7A Wedgetail aircraft would deploy to Europe in August alongside up to 100 ADF personnel at the request of Poland.

He said new sanctions had also been applied targeting Russia's defence, energy, transport, insurance, electronics and finance sectors, as well as promulgators of Russian disinformation and propaganda.

Foreign Minister Penny Wong said Australia remained "steadfast" in its support for Ukraine.

"Our targeted sanctions reflect our close coordination with key NATO partners, including the UK, Canada and the European Union," she said, in a statement.

"Australia has now imposed more than 1,500 sanctions in response to Russia's full-scale invasion of Ukraine. We will continue to work with partners to disrupt Russia's ability to fund its illegal and immoral war."

Russia's neighbours lead the pack in boosting spending

Other countries closer to the borders of Russia and Ukraine — Poland, the three Baltic states and Nordic countries — have committed to the goal, as have NATO's European heavyweights Britain, France, Germany and the Netherlands.

"This is a big win, I think, for both President Trump and I think it's also a big win for Europe," Finnish President Alexander Stubb told reporters. 

"We're witnessing the birth of a new NATO, which means a more balanced NATO."

He said it would take nations "back to the defence expenditure levels of the Cold War". 

NATO countries started to cut their military budgets in safer times after the Berlin Wall collapsed in 1989.

In a fresh take on Trump's MAGA movement, Lithuanian President Gitanas Nausėda said: "We should choose a motto, 'make NATO great again.'"

After Russia's full-scale invasion of Ukraine in 2022, the NATO allies agreed to make 2 per cent of GDP the minimum spending level. Last year, 22 countries were expected to hit that target, up from just three a decade ago.

In The Hague, the allies endorsed a major revamp of their spending targets. They upped the ante for what NATO calls "core defence spending" to 3.5 per cent, while changing how it's counted to include providing military support to Ukraine.

To hit Trump's 5 per cent demand, the deal set a second target of 1.5 per cent of GDP for a broader range of defence-related spending, such as improving roads, bridges, ports and airfields so that armies can deploy more quickly, countering cyber and hybrid attack measures, or preparing societies to deal with future conflicts.

Progress will be reviewed in 2029, after the next US presidential elections.

"This declaration is historic. We are 32 allies supporting that ambition, which is huge," said Norwegian Prime Minister Jonas Gahr Støre.

"We have been struggling to get above 2 per cent and now we said 3.5 per cent, which is necessary in order to reach our capabilities."

Earlier this month, NATO agreed individual purchasing targets for nations to stock up on weapons and military equipment to better defend Europe, the Arctic and the North Atlantic, as part of the US push to ramp up security spending.

US decision on forces in Europe expected in coming months

Extra funds will also be needed should the Trump administration announce a draw-down of forces in Europe, where around 84,000 US troops are based, leaving European allies to plug any security gaps. The Pentagon is expected to announce its intentions in coming months.

Beyond Trump's demands, European allies and Canada have steeply ramped up defence spending out of concern about the threats posed by Russia. Several countries are concerned that Russia could carry out an attack on NATO territory by the end of the decade. Hungary is not one of them, though.

"I think Russia is not strong enough to represent a real threat to us. We are far stronger," said Hungarian Prime Minister Viktor Orbán, fielding questions from reporters, leaning back with his hands thrust into his pockets. Orbán is considered Russian President Vladimir Putin's closest ally in Europe.

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