Terrifying! US Allies Begin Splurging on Weapons

US allies are now seriously bolstering their militaries. Their defence budgets are rising sharply, particularly in Europe and the Indo-Pacific region. Citing The Economist, the annual comparison of global military budgets shows the largest shift in US allies’ defence spending since 2001. This change follows NATO Secretary General Mark Rutte’s promise to US President Donald Trump last year that European defence budgets would increase substantially. Now, that promise is materialising. US allies are ramping up their military spending, both to alleviate pressure from Trump and to prepare for potential reductions in American security protection. In the ranking, The Economist uses estimates from the Stockholm International Peace Research Institute (SIPRI). Military budgets are compared using three measures: value in US dollars, share of gross domestic product (GDP), and military purchasing-power parity (PPP). PPP adjusts for differences in local wages and prices in each country. This measure allows a country’s defence budget to be compared more fairly with the US budget. However, the cost of military equipment is not adjusted. The reason is that most defence hardware is imported, and its quality is hard to compare directly. Global Military Spending Hits US$2.9 Trillion Worldwide, military spending reached US$2.9 trillion in 2025, equivalent to Rp50,779 trillion (assuming an exchange rate of Rp17,510/US$1). This figure is up 2.9% from 2024 after adjusting for inflation. The increase also marks the 11th consecutive annual rise, meaning the world has been expanding defence spending for over a decade. Europe is one of the main drivers of the global military spending increase. European countries, excluding Russia and Ukraine, contributed nearly half of the total rise. Defence spending in the region surged 14.1% to US$864 billion. In contrast, the US is moving in a different direction. The US defence budget fell 7.5% to US$954 billion in 2025. This level is roughly back to the US defence budget in 2021. Part of this change is related to support for Ukraine. The US did not approve additional funding for Ukraine in 2025, while European countries are increasing their support. However, the European defence spending increase is not solely tied to the Ukraine war. If Russia, Ukraine, and related military aid are excluded from the calculations, European defence spending still rose 13.4%. This shows that European countries are not only responding to the war but are also rebuilding their own military capabilities in the long term. Other US allies are also strengthening their defence budgets. Japan, for example, raised its defence budget by 9.7% in 2025 to US$62 billion. Japan’s defence spending now equals 1.4% of GDP, the highest share since 1958. This increase signals that US allies in the Indo-Pacific region are also becoming more serious about enhancing their defence capabilities amid rising geopolitical tensions in the area. US Allies’ Spending Now Surpasses America The spending increases mean that US allies, when adjusted for military purchasing power, are now spending more on defence than the US for the first time since 2001. NATO countries plus US treaty allies in the Indo-Pacific—Australia, Japan, South Korea, Thailand, and the Philippines—are spending funds equivalent to 111% of the US defence budget in 2025. Meanwhile, NATO allies in Europe and Canada alone are spending the equivalent of 81% of the US budget. In other words, when calculated based on military purchasing power, US allies have now become a very significant defence spending force. US Still Number One, China Second Nonetheless, the US remains the country with the largest military spending in the world when viewed in dollar terms and military PPP. China is in second place. SIPRI estimates China’s military budget rose 7.4% in 2025 to US$336 billion. Adjusted for military PPP, China’s budget equals US$599 billion or 12.7% of total global military spending. By comparison, the US share is 20.2% of the global total. Meanwhile, Ukraine remains the country with the largest defence spending as a share of GDP. The country allocates 40% of its economic output to defence, far above Russia’s 7.5%. Spending Rises, But Not Yet Independent from US Looking ahead, the US still has the potential to widen its lead in dollar terms. Trump wants to bring US defence spending close to 5% of GDP. On the other hand, although NATO countries’ defence budgets are increasing this year, most members are still only around 2% of GDP. A report from the Kiel Institute, a research institution, assesses that large-scale combat operations in Europe are still hard to imagine without US approval, software, and weapons. In other words, US allies’ defence spending is indeed rising rapidly. However, the increase is not yet enough to make them truly independent from America. In practice, the American military umbrella remains hard to replace.