Trump gets NATO allies to spend 5% of GDP on defense, now must pay bills

Days ago, President Donald Trump threatened Spain with new tariffs unless Madrid increases its defense spending to 5% of its GDP. Whether this tactic proves effective remains to be seen, but one thing is certain: the president has been even more effective than he was in his first term when it comes to getting other nations to honor their commitments. This fact has been most prominent when it comes to defense spending.

In 2006, America’s NATO allies agreed to spend 2% of their GDP on defense. After several years of little progress, the Obama administration secured an updated agreement in 2014 that all would achieve this goal by 2024. Yet when Trump first entered office in 2017, only five of 28 nations had met that mark.

The president and his national security team, including me, pressed our allies hard back then to live up to their commitments. By 2021, the number of NATO members meeting doing so had doubled and allied military spending increased considerably.

Fast-forward to 2025. Aided by the ongoing war in Ukraine and a European fear of Vladimir Putin, Trump managed to achieve what many thought impossible: convince our NATO allies to spend a whopping 5% of their GDPs on defense!

In the economic space, the White House has similarly persuaded other nations to live up to past obligations when it comes to trade, using tariffs and other means where necessary to do so. This should be more apparent when it comes to future trade talks with China.

The communist state has violated its obligations and reneged on numerous agreements for decades, from the theft of intellectual property to currency manipulation and the unfair subsidization of Chinese companies. During Trump’s first term, for example, the PRC notably never purchased the $200 billion in additional U.S. exports it had promised.

China may be the most notorious country when it comes to reneging on commitments, but it’s not the only one. Many of America’s friends are also culpable, especially when it comes to deals made with U.S. companies. I have seen this during my own time in the private sector.

This is enough of a problem that the House Appropriations Committee recently wrote in the August report of their FY2026 spending bill for national security, Department of State and related programs that it “continues to be concerned by reports of commercial disputes between United States entities and host governments….”

The committee noted “particular concern” about “disputes over real property seized, held or expropriated by foreign governments.” The report went as far as to call out the governments of the “Democratic Republic of Congo, Djibouti, Honduras, Kuwait, and Mexico.”

Allegedly, Mexico’s state-owned oil company Permex owes American contractors $1.2 billion. Kuwait is purportedly accused of not paying the U.S. for its financial obligations – including for its Al Zour refinery, one of the largest oil refinery projects in the Middle East – where it reportedly has left U.S. and other contractors unpaid.

And, per the State Department, many U.S. companies operating in Honduras have “voiced concerns regarding politically motivated threats of criminal prosecution and expropriation of private assets.”

The committee concluded its report by directing Secretary of State Marco Rubio “to utilize the various tools of diplomatic engagement to…. facilitate the timely resolution of such disputes.” Such action, of course, begins with America’s diplomats abroad.

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U.S. ambassadors who are already on station in foreign capitals facing such matters should press their host governments on all levels. As should those persons being put forward to the Senate for such assignments – beginning with Amer Ghalib, who testified Thursday at a hearing to be America’s next ambassador to Kuwait (currently the only vacant post in the House Committee’s call out list).

Further, a separate congressional hearing on the broader issue of foreign governments allegedly backpedaling on their agreements with U.S. companies would also be quite helpful.

The administration has appropriately spoken about protecting U.S. jobs, preserving American innovation, and ensuring fairness when it comes to global trade and business. We have seen the president’s team act on these instincts. And given the business backgrounds of many in the administration, they surely appreciate the challenges that American companies face when addressing business disputes with foreign governments.

Just as the president did this year by getting our NATO allies to live up to their spending commitments when it comes to bolstering the alliance, applying this same focus and energy to help U.S. firms resolve their disputes with foreign governments would go a long way to helping American companies and workers.

If our allies and friends want the benefits of partnership with the United States, they must also honor their commitments – to our country, our businesses and our workers. That’s another good way to put America first and promote U.S. economic growth and prosperity.

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