NATO leaders pledged to raise defence spending to 5% of GDP by 2035, with 3.5 % dedicated to core military capabilities, at last week’s summit in The Hague. This dramatic increase, framed as a clear response to Russia’s aggression and China’s growing assertiveness, may appear like a bold act of unity. But it also reveals a more complex shift: a hardening of alliance politics under US pressure, growing unease among Indo-Pacific partners, and a quiet divergence between two major regional security outlooks.
For Indo-Pacific players already navigating economic headwinds and regional instability, NATO’s escalation may appear less like strategic foresight and more like overreach.
This was not unity in spirit. The pledge’s careful structure – with its division between core defence spending and broader defence-adjacent areas like cyber and transport – suggests internal hesitation as much as external resolve. It was reportedly crafted by NATO Secretary-General Mark Rutte to satisfy demands from Washington while offering European leaders a compromise. Above all, it was designed to placate Donald Trump, who has long demanded that NATO members spend more or face consequences.
Spain, which has historically resisted defence spending increases, pushed back quietly but deliberately. In the summit communiqué, Madrid inserted a key qualifier, supporting the pledge from “allies” rather than “all allies”. That linguistic shift was enough to trigger Trump’s ire. He threatened tariffs and accused Spain of free-riding. This incident reveals the shifting nature of NATO politics, where economic coercion is now being used to enforce alliance discipline, and defence spending has become a marker of political loyalty.
More telling than intra-European tensions was who chose not to attend. Of NATO’s four Indo-Pacific partners – the so-called IP4 – only New Zealand sent its leader, Prime Minister Christopher Luxon. Australia, Japan and South Korea sent lower-level representatives. Japan’s Prime Minister Shigeru Ishiba reportedly withdrew in part due to concerns about pressure from Washington to adopt similar spending targets. For Indo-Pacific players already navigating economic headwinds and regional instability, NATO’s escalation may appear less like strategic foresight and more like overreach.
This divide is not only fiscal – it reflects a structural difference in how each region understands security. NATO, under sustained US influence, increasingly sees military power as the primary measure of credibility. In contrast, Indo-Pacific partners continue to emphasise a more mixed approach. They combine deterrence with diplomacy, economic engagement, and coalition-building. Australia’s strategy remains focused on Southeast Asia and the Pacific Islands. Japan and South Korea operate in volatile neighbourhoods where strategic flexibility is often more stabilising than military maximalism.
At the 30 May-1 June Shangri-La Dialogue in Singapore, US calls for increased Indo-Pacific defence contributions were met with caution, particularly from regional states wary of being drawn into a major-power contest. Malaysian Prime Minister Anwar Ibrahim emphasised that for many in the region, economic disruption, not military imbalance, is the more immediate security concern. That sentiment was recently echoed by Singapore’s Prime Minister Lawrence Wong, who affirmed that Southeast Asia rejects zero-sum competition and embraces multilateralism, asserting that ASEAN can “shape its own destiny” amid rising US-China rivalry.
What we are witnessing may be the onset of a subtle but important decoupling. Over the past five years, starting with NATO’s 2030 agenda and accelerating through successive summits, security ties between the Euro-Atlantic and Indo-Pacific have grown closer. Common concerns about the erosion of global norms, China’s rise, and Russia’s war in Ukraine have driven stronger cooperation. But unity has limits. The Hague summit signals that while NATO seeks broader partnerships, it is also raising the cost of entry – in financial terms, and in the expectation of political alignment.
This divide is not only fiscal – it reflects a structural difference in how each region understands security.
There are arguments in favour of the 5% pledge. Supporters often argue that in the context of growing strategic uncertainty, increased investment will lead to greater innovation, interoperability and fairer burden-sharing among allies. But even if that logic is sound, the model risks becoming exclusionary. Instead of encouraging convergence, it may lock in a two-tier system: those who can meet NATO’s demands, and those who choose not to or cannot.
For Indo-Pacific partners, the dilemma is growing. Aligning too closely with NATO’s increasingly forceful posture may pull them into European-driven decisions that are not tailored to their region. But staying too distant could reduce their influence in transatlantic institutions that shape the global rules-based order. This is especially true under Trump, whose transactional approach to alliance management reduces space for nuanced or balanced positions.
The 5% benchmark is not just about budgets. It symbolises a shift in NATO’s identity – from a consensus-based community to a more hierarchical bloc, where spending is a test of trust. Spain’s careful distancing and the IP4’s absence are not minor footnotes. They may as well be early signs of resistance to a model of alliance politics that prioritises conformity over adaptability.
If global stability depends on resilient, flexible coalitions rather than rigid blocs, NATO’s future challenge is not only to deter adversaries but to keep its friends close. As Indo-Pacific countries weigh their strategic bandwidth, they may increasingly question whether NATO’s trajectory strengthens or limits its capacity to shape a stable multipolar order.
