South Korea and Trump’s 5% defence spending demand

South Korea’s defense spending in 2024 was USD47.5 billion, or around 2.7 percent of Gross Domestic Product (GDP). The U.S. is currently pushing its Indo-Pacific allies, particularly the NATO–IP4 (Japan, South Korea, Australia, and New Zealand) to follow the European commitment to spend five percent of GDP on defense. It will be a challenge to convince each state to commit—although currently opposed, South Korea may prove to be the easiest.

The Indo-Pacific is not Europe. Not all states agree there is a common adversary, there is no formal alliance structure, and the institutional mechanisms that make NATO rearmament both credible and coherent, doesn’t exist.

First, strategic threat perceptions vary sharply across states. Europe, throughout the Cold War and since the 2014 annexation of Crimea, has viewed Russia as the primary threat. Although not all states have responded militarily, the acceptance of this fact is near universal. In contrast, Indo-Pacific countries hold divergent views on China—the primary competitor of the U.S.

Japan and Australia have aligned closely with the U.S. framing of China as a systemic challenge to the rules-based order. In contrast, South Korea and New Zealand (under varying administrations) have been far more ambivalent with the U.S. framing of China as a systemic challenge to the rules-based order.

This reflects the broader regional stance, with the Philippines (under varying administrations) and other ASEAN members who count China as their largest trading partner and a permanent (as well as historical) feature of the region, considerably more ambivalent with the U.S. framing of China as a systemic challenge to the rules-based order. For some, it is natural and unavoidable.

On top of this, each state has strategic concerns regarding states other than China. As a simple example, Japan has Russia; South Korea has North Korea; Australia has Indonesia (and vice versa); and New Zealand—well, they have nobody, and that’s why it’s pretty much perfect. This both nullifies the propensity for a unified threat perception and complicates defense spending (see below).

The absence of a unified threat perception erodes the possibility of creating collective urgency around defense buildup or strategic coordination in the same way NATO has with Russia.

Second, the Indo-Pacific lacks a multilateral, treaty-based alliance system akin to NATO. Instead, it consists of a patchwork of bilateral and trilateral security arrangements—such as the U.S.–Japan Security Alliance, the U.S.–ROK Alliance, and newer configurations like AUKUS and the Quad. These frameworks differ in legal standing, operational depth, and strategic purpose.

For instance, AUKUS is focused on high-end technological sharing, particularly nuclear submarine capability, while the Quad has no collective defense obligations and operates as a strategic dialogue forum. Even the U.S. bilateral security treaties do not reach the level of NATO’s Article 5 mutual defense commitment. For example, the US treaty commitment under ANZUS requires the U.S. to “consult” if Australia is attacked! Often ridiculed in Australia, the country’s entire security rests on the whims of whichever U.S. administration is in power.

Reflecting this, there is nothing binding the region together. Without such a structure, there is no central body to coordinate force posture, procurement standards, or military integration. This limits strategic coherence, reduces the speed and scope of crisis response, and most importantly, allows for greater divergence in national priorities—particularly as domestic politics, economic dependence, and regional geography pull states in different directions.

Third, NATO’s credibility in collective rearmament stems from decades of shared military planning, interoperability standards, centralized command structures (like SHAPE), and a political decision-making apparatus in Brussels that enables coordination even across politically diverse members. None of these features are present in the Indo-Pacific.

There is no central secretariat, no standing integrated military command, and no standardized doctrine across the region’s various defense actors. Moreover, NATO has institutionalized burden-sharing debates, force generation conferences, and joint exercises that enhance both capability and trust for decades.

In contrast, Indo-Pacific states coordinate through Washington. The “hub and spokes” approach worked well in the Cold War when the region was a secondary theater but it does not serve the current strategic environment—and it’s too late to alter this structure.

Without a shared institutional infrastructure, even a coordinated buildup of defense spending across Indo-Pacific democracies would lack coherence, fall short of strategic alignment, and risk duplication or gaps in regional defense postures. Worse still, with no institutional setting buttressing collective security, the end result will be competitive insecurity—an unstable regional buildup that feeds mistrust, accelerates arms races, and expands the zone of confrontation.

Competitive insecurity occurs when more spending by one actor increases perceived vulnerability in others. That perception triggers further spending, eroding stability without improving predictability. Each move is defensive in intent but escalatory in effect.

In Europe, defense increases reinforce an existing collective architecture. NATO provides shared planning, integrated capabilities, and a singular enemy: Russia. That clarity doesn’t exist in the Indo-Pacific. Instead, the region is shaped by overlapping disputes, competing loyalties, and divergent perceptions of threat.

Using the simple example above, when Japan increases its defense spending, Russia must increase its spending; when South Korea increases its defense spending, North Korea must increase its spending; when Australia increases its spending, Indonesia feels compelled to do the same. When New Zealand increases its defense spending (and integrates more closely with the U.S.) it loses its neutral player position. Each defense spending increase produces a ripple effect, and isn’t just about the IP4 countries.

If the IP4 move toward five percent spending, ASEAN states and even India will feel pressured to follow. Indonesia, Vietnam, the Philippines, and others — all sitting between Chinese power and U.S.-aligned partners — would see their defense postures fall behind. They’d face growing incentives to rearm, not because they want to, but because they believe they must. India, already managing tensions with China along its border and seeking naval dominance in the Indian Ocean, would be drawn deeper into a regional arms race it has so far tried to avoid.

This chain reaction would not create collective defense. It would generate a loosely connected set of arms buildups, each feeding off the other, with no mechanism for coordination, deconfliction, or trust-building. Unlike Europe, where there is a broad two-player competition, the Indo-Pacific is a web of overlapping rivalries and asymmetries. India and China face off along a contested land border, while China and Japan spar over maritime claims. North Korea’s nuclear threat looms over South Korea and Japan, but draws a different level of urgency from Southeast Asian states.

The United States seeks to manage all these tensions while balancing deterrence with engagement—yet without a unified command or shared strategic culture among its regional partners, its efforts risk being piecemeal. As each state re-arms according to its own threat perceptions and procurement preferences, the region could become more volatile, not more secure.

Finally, public support is not guaranteed, either. In all four IP4 states, military budgets compete with demands for housing, climate response, and public health. Political leaders may find that large-scale defense increases provoke backlash, especially if the perceived threat remains abstract or distant. In New Zealand and South Korea in particular, publics remain wary of being pulled into U.S.–China confrontation by default.

The Indo-Pacific does face real threats: the South China Sea, North Korean nuclear expansion, and the rising risk of conflict over Taiwan. But the solution is not to copy-paste NATO’s budget formula. The region needs a strategy tailored to its geography, history, and institutional gaps.

South Korea occupies a particularly precarious position within this emerging environment of competitive insecurity. Unlike Australia or Japan, which have relatively stronger alignment with U.S. strategic framing and fewer direct threats from non-Chinese actors, South Korea faces a unique dual exposure: to North Korea’s growing nuclear capabilities on the one hand, and to the broader U.S.–China rivalry on the other. This makes its defense planning both immediate and entangled.

Any increase in South Korean defense spending is immediately read in Pyongyang as escalatory—regardless of intent—and justifies further nuclear tests, missile launches, or doctrinal shifts in North Korea’s posture. At the same time, overt alignment with the U.S. push for a five percent of GDP defense commitment risks undermining Seoul’s diplomatic maneuverability with China, which remains a critical economic partner and a gatekeeper of stability on the peninsula.

Paradoxically, this makes South Korea both the most vulnerable and the most pliable partner among the IP4.

Its historical dependence on the U.S. alliance system and the immediacy of the North Korean threat make it more likely to acquiesce to American pressure to increase defense spending. The Yoon Administration would’ve jumped at the chance. The Lee Administration will resist, but will find it incredibly difficult. Washington under Trump is not easy to deal with, and Seoul has few diplomatic cards left to play.

Its best option would be to use deft creativity to give Trump a walk-away Fox News victory without impacting regional affairs—a very hard call.

Seoul might spend more, but unless that spending is part of a regional or institutional logic, it will feed insecurity rather than resolve it. For South Korea, the real risk is that its willingness to comply will place it at the center of an arms race it cannot shape, and one whose logic is increasingly divorced from the peninsula’s actual security needs.