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    Trump’s defense spending promises face test

    Smart WealthhabitsBy Smart WealthhabitsJuly 6, 2026No Comments7 Mins Read
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    NATO faces a key test of its credibility and future viability this week as leaders meet in Turkey, with new European defense spending targets under unprecedented scrutiny from the White House.

    This week’s summit, starting Tuesday, will examine whether Europe can turn big budgets into military power fast enough to keep President Donald Trump busy while preparing for a future in which Washington will play a smaller role in the continent’s security.

    Last year’s summit in The Hague was seen as a success when the allies committed to spending 5% of GDP on defense by 2035, including 3.5% on core defense needs and 1.5% on broader security needs.

    But this year’s summit in Ankara is expected to move the debate from promises to implementation. This includes questions about procurement, industrial capacity, support for Ukraine and the political framework of what the Trump administration is calling “NATO 3.0.”

    “This is really the NATO summit where NATO goes from burden sharing to burden shifting,” Ulrike Franke, senior policy fellow at the European Council on Foreign Relations, told CNBC.

    The summit comes as NATO faces pressure to maintain its support for Ukraine and adapt to a battlefield shaped by rapid technological advances in drones, air defense and industrial capability.

    Here are five big questions facing NATO leaders.

    Can NATO keep the US busy while placing more responsibility on Europe?

    Following pressure from the White House, European governments have largely accepted that they will have to spend more, produce more and take more responsibility for their own security.

    But NATO has been structured around American power for 77 years, making the issue a military as well as a political question, said Max Bergman, director of the Europe, Russia and Eurasia program at the Washington-based Center for Strategic and International Studies.

    He told reporters at a press conference last week that if Washington pulls back, even without leaving, Europe will face a difficult question — how to organize defense without the US at the center.

    NATO Secretary General Mark Rutte has focused on keeping Trump busy by pursuing burden-shifting plans. But Bergman said there has been little discussion of a “Plan B” if the US decides it doesn’t want to remain deeply involved.

    For Europe, Franke said, another priority is clarity. If Washington intends to withdraw forces, assets or capabilities, allies need a roadmap and a timeline. That could be difficult with Trump, whose approach to allies has often been unpredictable.

    According to Franke, Europeans would also be willing to unite publicly, especially on defense spending. Spain and France have already faced criticism over their defense budgets. Meanwhile the UK and France face serious financial constraints despite recognizing the need to do more.

    Will Europe’s defense boom yield arms – or just higher budgets?

    The pace of NATO spending in Europe’s defense sector has already changed. Poland, the Baltic states and the Nordic countries have advanced the fastest, reflecting their proximity to Russia. However, larger economies have grown more slowly due to fiscal pressures and domestic politics.

    “There is money in the system now, but we need to be able to spend it,” Franke said. “Europe needs to be able to produce things.”

    North Atlantic Treaty Organization (NATO) Secretary General Mark Rutte, U.S. President Donald Trump and British Prime Minister Keir Starmer, front row, left to right, with other world leaders during a family photo at the NATO summit in The Hague, Netherlands, on Wednesday, June 25, 2025.

    Bloomberg | Bloomberg | getty images

    Europe’s defense industry remains fragmented and hampered by supply chains, bureaucracy, labor shortages and years of underinvestment. Joint purchasing could, theoretically, lower costs, improve interoperability and build scale. In practice, governments still want contracts, jobs and tax revenues at home.

    Franke pointed to Franco-German defense projects as examples of how national political incentives can slow cooperation, even when joint production makes strategic sense.

    Can allies support Ukraine as war escalates?

    Ukraine is expected to take center stage in Ankara, with debate focusing on long-term military support, Kiev’s own defense industry and what NATO can learn from the country after more than four years of full-scale war.

    This happened when Russia suffered heavy losses on the battlefield. “The data indicates (that) the Russians are doing very poorly in 2026,” said Seth Jones, chair of the defense and security department at CSIS, citing rising casualty rates and ground losses.

    Kiev has also increased long-range drone and missile attacks inside Russia. Targeting energy, military and logistics infrastructure, demonstrating the progress Ukraine has made in developing domestic strike capabilities.

    Franke said NATO needs to stop viewing Ukraine solely as a recipient of Western aid. Kiev is now a source of military innovation, particularly in drones, counter-drone systems and battlefield data on how to fight Russia.

    “Ukraine holds the cards in drone and counter-drone systems,” Franke said.

    This could shift the NATO conversation from how the alliance helps Ukraine to how Ukraine helps NATO prepare for modern warfare.

    Can NATO avoid political cleavages as the alliance evolves?

    The summit comes after months of tension between Washington and European allies, including Trump’s frustration over inadequate European support during the Iran conflict.

    Franke said Iran could join Ankara. This could include debate on a possible European contribution to maritime security or any peacekeeping arrangements, including minesweeping efforts. But he said such contributions were likely to be limited and partly symbolic, because Europeans are still not fully on board with Washington’s approach.

    Franke said European unity would matter if Trump singled out countries on spending, although that is difficult when threat perceptions vary widely across Europe.

    There is also the question of future arrangements. NATO summits were not traditionally annual events, but they have been held every year since Russia’s full-scale invasion of Ukraine. Amid uncertainty over a potential Albania summit next year and the 2028 US election calendar, Bergman said he would not be surprised if this was the last NATO summit of Trump’s presidency.

    That possibility could raise the stakes. If this summit is the “last hurray,” the message Trump wants to send at this NATO summit may matter beyond Turkey.

    What does Türkiye want from hosting the summit?

    Türkiye’s role as host adds another layer of complexity.

    Like previous host countries, Turkey is likely to use the summit to put its security concerns and defense industry on the agenda.

    For President Recep Tayyip Erdogan, a successful summit would likely demonstrate Turkey’s centrality, avoid a major diplomatic breakdown and strengthen Ankara’s case for access to defense purchases as European military spending increases.

    IZMIR, TURKEY – MAY 21: Turkish President Recep Tayyip Erdogan arrives to participate in the Distinguished Observer Day of the EFES-2026 Joint, Joint, Live-Fire Field Exercise, one of the largest and most extensive military exercises conducted by the Turkish Armed Forces, in Izmir, Turkey on May 21, 2026. (Photo by Turkish Presidency/Mustafa Qamasi/Handout/Anadolu via Getty Images)

    Anadolu | Anadolu | getty images

    “Defense purchases (and) legitimizing the regime are probably Turkey’s main goals,” Bergman said, noting democratic decline under Erdogan.

    Turkey may also be concerned about being left out as the EU shifts more defense spending toward European producers, he said, adding that because Turkey is in NATO but not the EU, access to future contracts and joint projects could become a priority.

    As NATO tries to keep the US engaged, rapidly arm Europe, and retain Ukraine, Turkey will likely be pressing its case: any new European security framework still needs Ankara at the table.

    Why Europe is rushing to build its own defense industry – and what it means
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