U.S. may require South Korea to spend 5% of GDP on defense

The U.S. Department of Defense has officially confirmed for the first time that it intends to apply NATO’s defense spending guideline — 5 percent of the GDP — to South Korea.

As U.S. President Donald Trump’s call for allies to shoulder more of the defense burden extends from Europe to Asia, South Korea now faces potential pressure to adopt what is being called the “5 percent rule.”

Pentagon spokesperson Sean Parnell told the JoongAng Ilbo on June 19 that, as Secretary of Defense Pete Hegseth said during the U.S. Senate budget hearing and the Shangri-La Dialogue in Singapore, the country’s European allies are now setting a global benchmark for alliances, particularly in Asia, spending 5 percent of GDP on defense.

Parnell added that given North Korea’s continued nuclear missile development and China’s military expansion, it is only logical that U.S. allies in the Asia-Pacific align with the pace and spending levels of Europe. He said that for the American people, fair and balanced burden-sharing with Asian allies is common sense.

This is the first time the U.S. has officially stated it plans to apply the 5 percent GDP defense spending rule — previously targeted at NATO — to South Korea. In a speech at the Shangri-La Dialogue in late May, Hegseth criticized Asian allies for underinvesting in defense saying that “it doesn’t make sense for countries in Europe to do that while key allies in Asia spend less on defense in the face of an even more formidable threat, not to mention North Korea.”

The development comes as speculation grows over a potential first face-to-face meeting between the South Korean and U.S. presidents at the NATO summit in The Hague on June 24 and 25, heightening the need for South Korea to prepare for increased pressure from Washington.

A top-tier ally

Korea is already one of the most proactive U.S. allies when it comes to defense spending. The Ministry of National Defense said South Korea’s defense budget stood at 2.3 percent of GDP last year — higher than most NATO member states. Under a midterm defense plan announced in December 2023, Seoul has committed to increasing its defense spending by an average of 7 percent annually to strengthen its “three-axis” deterrence system against North Korea.

According to the plan, South Korea’s defense budget will reach approximately 80 trillion won ($58.4 billion), around 3 percent of its GDP, by 2028 and could surpass 100 trillion won, roughly 5 percent, in the early 2030s if current trends continue. Some experts argue that Seoul should stress this autonomous increase in defense spending when negotiating with Washington.

In a statement, the Defense Ministry said, “South Korea is one of the few major U.S. allies with a very high defense-to-GDP ratio, and has been continuously increasing its defense budget in response to the serious security threat posed by North Korea’s nuclear and missile programs.”

Not just about cash

Experts also say South Korea need not meet the 5 percent threshold through direct military spending alone. Secretary Hegseth suggested during the Senate hearing that the 5 percent figure could include related investments beyond the defense budget. NATO Secretary-General Mark Rutte has proposed a model combining 3.5 percent in direct military spending with 1.5 percent in indirect investments.

Korea already spends over 1 trillion won annually under the bilateral Special Measures Agreement to support U.S. Forces Korea. Additionally, South Korea is one of the largest purchasers of U.S. military hardware. According to the Defense Acquisition Program Administration, Seoul bought 6.9 trillion won worth of U.S. arms through the Foreign Military Sales program and over 3 trillion won through commercial deals in the past five years — amounting to nearly 2 trillion won per year on average.

These purchases could be used to argue Korea’s substantial contribution and flexibility in fulfilling the 5 percent guideline.

Trump’s focus on totals

Trump is known for making decisions based on first impressions and prefers brief summary reports. He often zeroes in on headline figures, which could work to South Korea’s advantage. Since he appears most interested in total spending amounts, Seoul may have considerable flexibility in deciding how to meet the 5 percent standard.

For instance, South Korea could boost personnel costs — such as increasing pay for junior and mid-level officers, whose compensation has long been criticized as inadequate — to raise the overall defense expenditure without necessarily transferring additional assets to the United States. This approach would still meet Trump’s numerical expectations without altering Korea’s strategic position.

“South Korea, which already pays separate defense cost-sharing contributions, should stand firm on past agreements while also being prepared to negotiate,” said Moon Sang-kyun, a professor of North Korean studies at Seoul Cyber University. “If South Korea agrees to increase defense spending beyond initial expectations, it must secure strategic returns, such as expanded deployment of U.S. strategic assets — a careful cost-benefit analysis is essential.”

BY LEE YU-JUNG, KANG TAE-HWA [kim.minyoung5@joongang.co.kr]