Trump Crazy: Spending 5.0 Percent of GDP on the Military

Fact-based, data-driven research and analysis to advance democratic debate on vital issues shaping people’s lives.
Center for Economic and Policy Research
1611 Connecticut Ave. NW
Suite 400
Washington, DC 20009
Tel: 202-293-5380
Fax: 202-588-1356
https://cepr.net
According to press accounts, Donald Trump has been demanding that our NATO allies spend 5.0 percent of their GDP on the military. This would be more than double their current commitment of 2.0 percent of GDP. While Trump is very happy throwing other people’s money into the toilet, presumably Europeans who know arithmetic will throw this one in the loony bin.
While the United States has wanted to use NATO as an all-purpose lackey to support whatever wars we decide to start (see Afghanistan and Iraq), it was originally established as anti-Soviet alliance. With the demise of the Soviet Union, it essentially is now an anti-Russia alliance. (Whether Russia is necessarily an enemy of the rest of Europe can be debated, but we’ll leave that question alone for now.)
The question at hand is how much do the European NATO countries need to spend to have a military that is adequate to defend themselves from Russia? At the most basic level, we need to know how large their economies are relative to each other. The graph below shows the GDP in 2024 for the European NATO countries, Russia, China, and the United States. (It adds Belarus’ GDP to Russia’s and Hong Kong’s to China’s.)
As can be seen, at 32.3 trillion dollars, the combined GDP of the European NATO countries is more than four times the 7.2 trillion dollars GDP of Russia combined with Belarus. If Russia spends 6.0 percent of its GDP on its military (this seems to be the consensus estimate), that comes to $430 billion a year. The European NATO countries could more than match this by spending 1.4 percent of their GDP on their military. They would be spending at a level 50 percent above Russia’s spending at their current target level of 2.0 percent of GDP. And this assumes no support whatsoever from the United States.
Given this arithmetic, it is hard to understand why the European NATO countries would have any reason to spend in excess of the current 2.0 percent NATO target. A higher level of spending may be desirable from the standpoint of US military contractors, who would likely be beneficiaries of additional NATO spending, but this has nothing to do with the European countries’ defense needs.
If the European NATO countries did decide to spend more, it certainly should not be in response to the urging of Donald Trump. They collectively will be spending more than enough to fend off any threat from Russia. There should be little need for any assistance from the United States in this effort.
As a practical matter, any additional spending might more appropriately be focused on the United States as a potential enemy. After all, Trump has already raised the possibility of using military force against three NATO members before even taking office. But presumably their efforts to build up their defenses against the United States will not be coordinated with Donald Trump.