Japan Braces for U.S. Demands of Additional Defense Spending Increases; Govt to Monitor Outcomes for NATO Members

By Yujiro Okabe and Kojiro Tanikawa / Yomiuri Shimbun Staff Writers

16:24 JST, June 27, 2025

The government is bracing for the administration of U.S. President Donald Trump to demand that Japan significantly boost its defense spending, in the wake of NATO members agreeing to do so at a recent summit.

Concerned that such an increase would require huge outlays and spark public backlash, the government intends to emphasize to the United States that Japan is already proactively making efforts to strengthen its defense capabilities. It plans to begin fully considering this matter, including details such as the size of future defense budgets and where funding for such expenditures could come from, after next month’s House of Councillors election.

At a press conference Thursday, Chief Cabinet Secretary Yoshimasa Hayashi said the government was “closely observing” the outcomes of the NATO decision, which he described as a “significant move.” However, Hayashi added, “The substance of defense capabilities is what’s important, not the amount spent.”

NATO member states agreed to raise their defense spending target to 5% of gross domestic product, a major increase from the previous benchmark of 2%.

Based on the Defense Buildup Program and other policies, Japan’s government aims to increase security-related expenditure to an amount equivalent to 2% of the fiscal 2022 GDP in fiscal 2027. In addition to the conventional defense budget, this figure would also include costs for expenditures in four key related fields such as building public infrastructure and cybersecurity. Japan’s security-related spending has been steadily growing and reached about 1.8% in fiscal 2025.

The government has been busily working behind the scenes to steer the United States away from issuing an explicit demand for greater defense spending since Trump returned to the White House in January. “If the government decided to expand this spending further due to pressure from the United States, public opinion would be critical,” a senior Foreign Ministry official told The Yomiuri Shimbun.

The government has repeatedly explained to Washington that progress is being made toward achieving the 2% target and sought its understanding on this approach.

Given the new target rolled out by NATO members, a senior government official said, “There’s no doubt the United States will step up its demands.”

In a statement issued on June 20, ahead of the NATO summit meeting, the U.S. Defense Department said U.S. allies in Asia, including Japan, should also aim to increase their defense spending to 5% of GDP. Some observers believe Prime Minister Shigeru Ishiba decided to skip the NATO summit to avoid having any demands thrust directly at him by the United States.

Discussions on the formulation of the next Defense Buildup Program are ongoing among expert panels at the Defense Ministry. There is a widespread view within the ministry that increased spending will be inevitable given the severe security environment surrounding Japan.

There is support within the ruling Liberal Democratic Party for settling this issue before the current program expires in fiscal 2027. “A review ahead of schedule also must be considered,” former Defense Minister Minoru Kihara said.

The cabinet of then Prime Minister Fumio Kishida decided to increase income taxes to generate the financial resources required to achieve the 2% target. However, the timing of the tax hike has yet to be determined. Accordingly, securing funds needed to accommodate any further increase in security-related spending will not be easy.