NATO Members Commit to 5% GDP Defense Spending by 2035

At the recent NATO summit in The Hague, President Donald Trump successfully pushed member countries to commit to a new defense spending target of 5% of GDP by 2035, more than doubling the previous 2% goal. This commitment is expected to trigger a major defense industry boom, especially among European companies like Germany’s Rheinmetall, which is already reporting significant sales growth. The increased spending is a response to escalating global conflicts, including Russia's war in Ukraine and China's military expansion, and reflects Trump's emphasis on 'peace through strength' and the importance of investing in serious military hardware, ideally made in America. The agreement has also eased transatlantic trade tensions, as Europe plans to increase purchases of American weapons, balancing trade relations that have long been strained by European underinvestment in defense. This surge in defense commitments is influencing national budgets and sovereign borrowing in several European countries. Meanwhile, the U.S. is experiencing a defense industrial resurgence, with factories ramping up production of critical weapon systems to meet both domestic and allied demands.