Defense deals signal rise of a new-look NATO

The dust is still settling from the recent NATO summit in Turkiye, a key forum framed around longer-term strategic questions for the military alliance. However, in the event, many of the headlines were made by the announcement of $50 billion in military agreements — deals that will contribute to the “Europeanization” of the alliance.

Reflecting the dealmaking mood, US President Donald Trump agreed to lift sanctions on Turkiye imposed in 2020 over Ankara’s purchase of Russian air defense missiles, warming ties between two allies. Trump also expressed a willingness to sell Turkiye F-35 fighter jets.

The large number of defense transactions, which include European countries buying surveillance drones, and NATO buying aircraft, underlines how much the debate has changed within the alliance since Trump’s first presidency. At the 2018 NATO summit in Brussels, Trump threatened to withdraw from the alliance unless other countries took serious steps toward reaching the benchmark of 2 percent of gross domestic product spending they had agreed to about four years earlier. Fast forward to July 7-8, and Canadian and European allies announced in Turkiye that they are increasing spending on defense rapidly, spending 20 percent more in 2025 than in the previous year, amounting to a $139 billion boost.

Yet, while Trump has helped influence the debate over greater military spending in the last decade, broader factors are also pushing European and Canadian increases in defense budgets, and fueling the “Europeanization” of NATO. A combination of Russian military assertiveness, instability in the Middle East and Africa, and concerns about China in the Asia-Pacific has driven this trend. Russia’s invasion of Ukraine in 2022 altered defense calculations for Europe. It was a wake-up call that also prompted Sweden and Finland, after decades of neutrality, to join the alliance.

The positive news for NATO is that the alliance is becoming more able to face what might be huge internal and external challenges on the horizon. In 2019, French President Emmanuel Macron said the alliance had become “brain dead” as a result of a rapidly changing geopolitical landscape, including the diminished commitment of the US under Trump. However, Macron has since said that the Russian invasion of Ukraine gave the alliance the jolt it needed with the “worst of electroshocks.” Nevertheless, the remainder of the Trump presidency is likely to continue to see tensions within NATO, and Europe and Canada remain dependent for now on the US for key capabilities.

NATO has formed closer ties with Japan, South Korea, Australia, and New Zealand. 

Andrew Hammond

In this context a key debate is underway about how best Europe might fill these gaps. NATO Secretary General Mark Rutte has launched a “Made in NATO” plan for a new age of transatlantic industrial cooperation. However, the EU is set on fostering its own homegrown industries with its own “Made in Europe” concept. At the heart of the dispute is how to spend the flood of defense money Europe is pouring into rearmament.

Beyond these defense deals, there were key discussions about the alliance’s future strategic direction. Perhaps the most important was framed by Turkish President Recep Tayyip Erdogan, highlighting the need for institutional revision. The Turkish leader warned that “today’s world is not a continuation of the old world in which NATO was founded. A new world has been established, and within this new global architecture, NATO’s positioning must be fundamentally different.”

What Erdogan alluded to is the doctrine of strategic expansion initiated through global partnerships, embodied in the so-called NATO 3.0 concept, a major reform of the alliance in response to fast-changing geopolitical realities in an increasingly multipolar world. As a result, Turkiye is enhancing defense cooperation with some states in the Middle East.

However, perhaps the most consequential geography of interest for NATO, with its combined membership of nations accounting for around half of global GDP and a collective population of over 1 billion, is the huge Asia-Pacific region, where China has been rising now for decades. Rutte said earlier this month that China is having a massive buildup of its own military and will have 1,000 nuclear warheads by 2030, adding: “So let’s not be naive about China. This foursome (China, Russia, North Korea, and Iran) is the main long-term threat we face.”

In recent years, NATO has formed closer ties with Japan, South Korea, Australia, and New Zealand. Officials from all four countries attended the Turkish-hosted meeting. The alliance is also cultivating warmer relations with India, which is part of the Quadrennial Defense Review with the US, Japan, and Australia.

Taken together, tensions with NATO are likely to simmer for the remainder of the Trump presidency, despite the increased defense spending by Europe and Canada. The best way for the alliance to withstand these US headwinds will be to continue to transform, including building more global partnerships, and helping to provide strategic direction in a rapidly changing security environment.

• Andrew Hammond is an associate at LSE IDEAS at the London School of Economics.