(Analysis) NATO leaders agreed in June 2025 to a historic plan: by 2035, each member will aim to spend 5% of its national income on defense. This target, more than double the previous 2% goal, splits into 3.5% for military needs and 1.5% for infrastructure and cybersecurity.

The decision comes as NATO faces growing threats from Russia and global instability, and as the United States, especially former President Donald Trump, demands that European allies share more of the defense burden.

Spain, led by Prime Minister Pedro Sánchez, resisted the sharp increase, arguing that raising defense spending to 5% would cut into social programs. After tense negotiations, Spain secured an exemption, committing to 2.1% of GDP instead of 5%.

NATO’s final statement used flexible language to allow this, avoiding a split within the alliance. Trump publicly criticized Spain’s stance, warning of possible trade penalties for not meeting the new target.

The financial scale of NATO’s plan is unprecedented. Based on NATO’s current combined GDP of about $56.3 trillion, the alliance would spend roughly $2.8 trillion a year on defense if all members reach the 5% goal.

NATO’s $3 Trillion Defense Surge: Outspending Rivals, Reshaping Global Military Power. (Photo Internet reproduction)

That’s a 92% increase from the current $1.47 trillion annual spending. This colossal sum would dwarf the military budgets of any rival. Russia’s 2025 defense budget stands at about $145 billion.

NATO’s Military Spending Surpasses China and Russia

China’s official 2025 defense budget is $246–$249 billion. Independent estimates, which include China’s off-budget military spending, put the real figure between $330 billion and $471 billion—still far below NATO’s projected total.

NATO’s military edge already shows in numbers: the alliance fields about 3.4 million active personnel, 22,000 aircraft, and over 1,100 naval vessels. Russia’s forces are much smaller by comparison.

Even if China’s real defense spending is at the high end of estimates, NATO’s combined future spending will exceed Russia and China’s military budgets together by more than seven times.

This surge in defense investment signals NATO’s determination to maintain its military dominance. The alliance wants to show Russia and the world that it is willing to back up its security commitments with unmatched resources.

For defense industries, this means massive new demand for equipment, infrastructure, and cybersecurity. For governments, it means tough choices about balancing military needs with domestic priorities.

Spain’s exemption highlights that not all NATO members can or will meet the same targets, reflecting economic and political realities.

Still, the alliance’s new goal marks the biggest planned military build-up since the Cold War, reinforcing NATO’s position as the world’s leading military power through sheer financial commitment.