On 27 January, Lithuania and Estonia pledged to increase defence spending to meet United States President Donald Trump’s target for NATO members to commit more than five percent of their GDP towards defence. The countries became the first NATO members to fulfil Trump’s demands. The decision comes amid ongoing debates among NATO members to raise the defence spending target to three percent.
Reasons for Trump’s Defence Spending Target
The North Atlantic Treaty Organization (NATO) was formed by the United States in 1949 to counter communist republics like Russia. The alliance currently has 32 members across Europe and North America, including Canada, France, Italy, the United Kingdom, and Spain.
President Trump urged NATO members to increase military expenditure above the current two percent standard to ensure robust security in the region amid the ongoing Russia-Ukraine war. Trump also plans to redirect American military resources toward China and the Asia-Pacific.
Trump has criticized Europe for being heavily reliant on US security guarantees. In February 2024, his statements about endorsing Russia if NATO members did not increase defence spending led to widespread outrage and concerns about his commitment to NATO’s collective defence
principle. In December 2024, Trump threatened to withdraw the US from NATO if allies refused to increase their defence contributions.
Statements Made by Both Countries
- Lithuania has committed to spending 5-6 percent of its GDP on defence annually from 2026 until at least 2030. Lithuanian Minister of Foreign Affairs Kęstutis Budrys stated that the government plans to finance this defence spending through borrowing.
- Estonia has pledged to raise defence spending from 3.7 percent to 5 percent of its GDP. Estonian Prime Minister Kristjan Michal stated that the government would implement public sector cuts to shift funding toward military spending.
- The increased defence spending by both countries would put them ahead of most NATO members, including Poland, which allocated 4.12 percent of its GDP to defence in 2024, and the United States, which allocated 3.38 percent.
Potential Outlook of the Situation
The increased defence spending by Lithuania and Estonia underscores a critical shift in NATO’s posture in Eastern Europe, as member states closest to Russia seek to reinforce their military readiness. However, the feasibility of sustaining such high levels of defence spending remains uncertain, particularly given potential public opposition and economic constraints.
This development could increase pressure on other NATO members, especially Western European nations, to raise their defence budgets, potentially intensifying intra-alliance debates about equitable burden-sharing. The move could also escalate tensions in Europe, as Russia has consistently warned of a higher risk of confrontation with NATO over its policies. Additionally, demonstrations by groups opposing the budget changes can be expected.
The move is also likely to provoke a strong reaction from Russia, which may view these measures as escalatory and further evidence of NATO’s militarization near its borders. This could heighten geopolitical tensions, increasing the risk of confrontational rhetoric or actions by Moscow. Additionally, domestic opposition within Lithuania and Estonia could lead to protests or political pushback, particularly from groups advocating for greater investment in social programs.
