Korea faces pressure as NATO raises defense spending target to 5% of GDP

Audio report: written by reporters, read by AI

Following a new NATO agreement to raise defense spending to 5 percent of members' GDP by 2035, pressure is mounting on U.S. allies in Asia, including Korea, to follow suit. The move is seen as part of a broader push by U.S. President Donald Trump, who has long pressed allies to increase their military budgets.

On June 25 in the Netherlands, NATO’s 32 member states adopted a joint statement in The Hague committing to allocate at least 3.5 percent of GDP annually to direct military expenditures, with an additional 1.5 percent to be spent on indirect security-related costs. The agreement also reaffirmed Article 5 of the NATO treaty, which states that an attack on one member is an attack on all.

Since 2014, the NATO defense spending target has stood at 2 percent of members' GDP. Tripling that goal will require a significant reallocation of national budgets, including cuts to welfare programs and other domestic spending. Major NATO members such as Germany, France and Britain have outlined concrete plans to meet the target, while Spain has opposed the increase. In response, President Trump threatened to double tariffs on Spanish imports, indicating his intention to tie security contributions to trade negotiations.

Korea now finds itself in a challenging position. The country’s 2025 defense budget is approximately 61.2 trillion won ($45.2 billion), or 2.3 percent of the GDP. Raising it to 5 percent would require an additional 70 trillion won based on this year’s economic output — a burden that could strain public finances. Yet, as NATO’s experience suggests, avoiding U.S. pressure entirely may be difficult.

To minimize the burden, Korea must pursue a multifaceted strategy. First, it is inevitable that defense cost-sharing negotiations will need to be linked with trade and tariff discussions. Korea could also use this moment to strengthen its self-reliant defense capabilities by reallocating increases in defense spending toward force enhancement and strategic asset development. Expanding security infrastructure and investing in military modernization could turn this pressure into an opportunity.

Korea’s defense industry might also benefit. As NATO members ramp up military spending, opportunities for exports from Korea’s defense sector could expand. The government should consider ways to tie increased defense funding to long-term industrial competitiveness.

Importantly, NATO’s new target carries no legal force. A shift in U.S. domestic politics — particularly if Republicans lose influence in the 2026 midterms — could weaken Trump’s hand. For now, Korea must monitor the evolving U.S. stance while crafting a flexible and pragmatic response grounded in national interest. A diplomatic approach rooted in practicality will be essential.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.