What Trump Wants From NATO Allies—and Why They Can't Just Give it to Him

To President Donald Trump, NATO is an unfair financial burden on the U.S. Ahead of the U.K. summit, his administration reportedly secured a cut in its monetary contribution to the defense alliance, with other allies making up the shortfall.

According to the book A Warning, purportedly by an anonymous senior administration official, Trump allegedly said the U.S. was "getting raped" by its NATO allies and pushed to come out of the alliance, formed to protect Western Europe from the Soviet Union as the Cold War dawned.

In London on Tuesday, Trump's language was softer, but his sentiments similar. "We benefit the least," Trump told reporters before the NATO summit, and called the alliance "unfair" to America.

Trump has in the past described NATO as "obsolete." But after French President Emmanuel Macron called the alliance brain dead, Trump hit back: "NATO serves a great purpose."

Disputes about how much the U.S. should contribute compared to others in NATO, particularly the larger powers in Europe, are not new.

President John F. Kennedy remarked back in 1963 that the U.S. "cannot continue to pay for the military protection of Europe while the NATO states are not paying their fair share," and was irritated in particular by West Germany's agricultural competition with American farmers.

What is new, however, is the intensity of rhetoric from Washington and an unpredictable president who appears willing to threaten the future of historic alliances unless and until he gets his way—and NATO has been in Trump's firing line since his 2016 campaign.

Long-running American concerns about NATO's funding structure are bearing fruit in Trump. The alliance must now adapt to its new realities—political, diplomatic, and technological—and communicate its enduring importance to members, and those states aspiring to join.

"The case has to be made. And that's where I think the current period is so distressing. Leaders are failing to make the case. In fact they're doing quite the reverse," Dr. Leslie Vinjamuri, head of the U.S. and Americas program at foreign affairs think tank Chatham House, told Newsweek.

"It undermines the more important dialogue that should be taking place. We're now in a different landscape when it comes to conflict. There isn't this hard and fast division between war and peace. There's hybrid warfare, there's cybersecurity issues, there's all sorts of things."

So how exactly does NATO funding work and what is in dispute?

How does NATO funding work?

Its members support NATO financially directly and indirectly. Member states make direct contributions under its principle of "common funding," which is the pooling of resources.

How much each member state contributes to common budgets is determined by a formula that is based on Gross National Income (GNI).

NATO's combined military and civil budget is around $1.85 billion for 2019.

There is also the common-funded NATO Security Investment Programme, which provides the necessary infrastructure for the alliance's work. The investment program's spending ceiling for 2019 is around $775 million.

Indirect NATO funding comes primarily in the form of its 2 percent guideline.

This is an agreement by NATO states to spend at least 2 percent of their GDP on defense. Within the overall 2 percent target is a sub-target; that 20 percent of defense spending should be on major new equipment.

Not all meet these guidelines. There was an agreement reached in 2014 that member states will do so by 2024 and each is supposed to develop a national plan to ensure this is the case.

NATO views this spending target as "an important indicator of the political resolve of individual Allies to devote to defense a relatively small, but still significant, level of resources at a time of considerable international uncertainty and economic adversity."

What does the U.S. currently pay?

The current formula for up until the end of 2019 sees the U.S.—the largest and wealthiest member state, and therefore the one with the highest GNI—contribute most of all to common funding.

It pays in a little over 22.1 percent of the NATO budget. Germany is the second-biggest contributor at almost 14.8 percent. The smallest contributor to common-funded budgets is the tiny Balkan state of Montenegro at 0.027 percent.

All in on direct funding, the U.S. contributed around $580 million to NATO this year. To put that in context, federal budget spending is set to be $4.4 trillion in the 2019 fiscal year. America's common funding contribution to NATO is around 0.013 percent of all its federal spending.

There may be additional spending elsewhere on NATO. For example, there is also the joint funding of research and development programs agreed between participating NATO states.

With the 2 percent target, again the U.S.—the largest military power by some distance in NATO—is the leader. The latest NATO estimates show that the U.S. is currently spending 3.42 percent of its GDP on defense.

The others meeting the 2 percent guideline, though only narrowly, are Greece, Estonia, the U.K., Romania, Poland, and Latvia. The remaining 22 members are not.

Many more member states meet the secondary 20 percent target—16 in total—including the U.S., which is hitting 27.5 percent this year on major defense equipment spending, ranking it sixth in NATO.

What are the disputes within NATO?

Trump argues that the U.S. is unfairly treated under the NATO system. He believes the U.S. contributes too much and the other member states too little. In essence, as with trade, Trump believes America is being ripped off.

The president sees NATO as a solution to a problem—namely, Russian aggression—that is primarily Europe's burden to carry, not America's, and therefore Washington's role in the alliance should shrink while others' roles grow.

His critics counter that Russia is also America's problem because it is a threat to U.S. allies and strategic partners, such as Ukraine. Moreover, Russia is a threat to the U.S., as demonstrated by the Kremlin's election meddling.

NATO also strengthens American power and influence. One consequence of Trump's NATO stance is to exacerbate divisions in the E.U. over how it should handle defense in the future. Some, such as France's Macron, are taking the opportunity to push harder for an E.U. military force independent of the U.S.

A 2018 report by the NATO Parliamentary Assembly said the culture of the alliance historically was "to encourage a steady increase [in defense spending] over time and to not call out individual members for 'failing' to live up to these expectations at any given time.

"The reason for this was clear—the maintenance of Allied solidarity always overrode any momentary shortcoming."

NATO must also evolve to tackle new and emerging threats, such as cyberwarfare, and American leadership in a strong defense alliance that works well together is vital to allies' security interests.

"There is a very clear sense that it's not only about protecting the sovereign borders of, say, the Baltics or Poland. It's also about hybrid warfare. It's about technology. It's about disinformation. And those are all things that draw on and threaten the transatlantic space," Vinjamuri said.

"It's very difficult to separate the U.S. from the U.K., from France, from Germany, from Ireland, from the other member states because their information systems and technology is heavily integrated.

"So whether it's about counterterrorism or combating interference domestically in disinformation campaigns by Russia or beginning to think about the role of China... all of those things are really very difficult to respond to if you don't have very effective working institutional structures for coordinating with your partners, in this case your allies."

But Trump is not alone in his complaints about the level of defense spending by NATO allies. American policy has been for some time to get other NATO states to do more to support the alliance and allow the U.S. to step back. Many ordinary Americans agree with him.

President Barack Obama voiced concerns during his leadership, and in 2014 at a NATO summit in Wales the allies agreed to the 2024 pledge. However, since then some states have stalled on that commitment. Five years on, just 15 of its members have made plans to hit 2 percent.

This infographic was provided by Statista.

Defense spending is on the rise across most NATO states. But there are political and economic challenges to increasing defense spending for many, particularly in Europe.

Economic weakness and financial crises have put heavy pressure on government budgets making it harder for them to find the money necessary. "It's a lot of money, especially for some of them," Vinjamuri told Newsweek, noting that the larger the economy, the greater the sum even a couple of percentage points of GDP will be.

Higher spending on defense is also a difficult political sell after the unpopular wars in Iraq and Afghanistan, and in some countries the rise in popularity of pro-Russian political parties—or, at least, skepticism about the Russian threat—further complicates the NATO issue.

The intangible and sometimes abstract strategic benefits of higher defense spending are hard to communicate to voters and opponents will often position it as a choice against, for example, more welfare spending or civilian infrastructure projects.

The 2 percent figure is also seen by some as a blunt tool, heavy on symbolism and light on substance, that does not take enough into account how that money is spent or a state's existing military capabilities, arguing that less spent efficiently is better than more spent carelessly.

The high level of U.S. defense spending, for example, reflects its global military role and responsibilities beyond NATO's focus.

"It takes time to make the case. European leaders have to make the case to their domestic populations, to their parliaments," Vinjamuri told Newsweek.

"You don't just write out a check and suddenly spend more money. There is a question of thinking rationally about where to put that money and how it can be leveraged in a way that's useful at the national level and to contribute to the agenda of NATO.

"It is more complex than it sounds."

Germany is a good example of such difficulties with its fragmented, turbulent politics and economy on the cusp of recession. Berlin has already said it will not be able to meet the 2 percent target by 2024 and it will likely be the early 2030s before it does.

There is also debate about how defense spending is measured because there is variation between states, making it harder to judge exactly whether each ally is meeting its commitment. It is a similar problem with variations in GDP calculations.

NATO freely admits that it is heavily reliant on American military strength, and has been since its inception at the dawn of the Cold War, describing it as an "over-reliance."

"This imbalance has been a constant, with variations, throughout the history of the Alliance and more so since the tragic events of 11 September 2001, after which the United States significantly increased its defense spending," says NATO.

"The gap between defense spending in the United States compared to Canada and European members combined has therefore increased."

Ahead of the summit, multiple reports said the U.S. and NATO had reached a deal that would see Washington reduce its contribution to common funding down to 16 percent, with other states making up the difference. It is the first, small step towards America passing more of the NATO burden onto the major European powers.

But any talk of NATO's demise is premature. "In the medium and long-term, I'm optimistic that people will continue to see great utility and value in NATO," Vinjamuri told Newsweek.