Spending on defence is surging in Europe while it falls in the United States, suggesting the Trump effect driving European engagement with NATO remains alive and well.
Analysis of global military spending found that in 2025, $2.8 trillion or 2.5 per cent of worldwide Gross Domestic Product was directed towards militaries. Spending rose by 2.9 per cent and has increased every year for 11 consecutive years, leaving defence budgets worldwide 41 per cent higher today than in 2015, so found the Stockholm International Peace Research Institute (SIPRI) in their annual report.
Incredibly while global defence spending showed healthy growth, it did so when costs for the world’s single largest military power — the United States — managed to slash its costs. The U.S. saw its defence spend cut a staggering 7.5 per cent by President Donald Trump ending support to Ukraine and curbing spending on Israel, SIPRI said.
President Trump has long warned America’s allies, particularly Canada and NATO’s European members, to do more for their own collective defence, and go some way to reverse the collapse in military spending across the alliance in most members but America in the post Cold War era. Trump’s criticism, that America’s allies have become free riders enjoying the bloom of global security paid for by American taxpayers, has led at times to panicked responses in Europe that the President is trying to undermine or destroy the alliance, even as Trump himself and NATO’s leaders state clearly the plan is to move to an era of greater strength underwritten by burden sharing.
And there is clear evidence for what has previously been called this ‘Trump Effect’, with defence spending rising faster in Europe than any other part of the world, growing at an astonishing 14 per cent this year. European countries spent $864 billion on their militaries in 2025, with almost a third of expenditure on investments in new equipment, implying the rise in cost is going towards modernisation and growth. The report also found this surge in spending to be beneficial to the United States, with half of all European defence equipment bought from American firms.
Change across Europe was not evenly distributed. Ukraine’s spending grew from a already high level, and European countries feeling under threat from Russian aggression surged cash to their armed forces. Poland is reckoned by many to be well on its way to be the most capable military in Europe — enabled by large buys of modern, if cost effective, military equipment from South Korea — while Germany has declared its intention to be the largest army on the continent within the decade.
On the other hand, the United Kingdom, which evidently wishes to be outdone by none when it comes to belligerent government rhetoric and promises of preparing the nation for war, saw its actual defence spending fall by two per cent from 2024 to 2025.
In some cases, those European nations boosting their defence spending have done so in an attempt, they claim, to spite President Trump, to defy America. Yet whatever pretexts European leaders sell these defence boosts to their own voters under, all spending increases are still moving towards the more independent and self-funding Europe in NATO President Trump has encouraged for a decade.
SIPRI analysis suggests the United States’ contraction in defence spending may be short lived, with new spending on the horizon, which says nothing of the costs for the present Iran war to be considered in future.
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