NATO leaders have agreed on a new defence spending plan during their summit in The Hague. The move comes in response to pressure from U.S. President Donald Trump, who has demanded that each country allocate 5% of its GDP to defence. While NATO didn’t fully agree to that exact figure, they reached a compromise that adds up to 5%, but not all of it goes directly to weapons and military equipment.

Under the deal, NATO countries will aim to spend 3.5% of their GDP on core military needs by 2035. This includes things like tanks, aircraft, and other direct defence equipment. The remaining 1.5% can be used for broader, defence-related areas such as cybersecurity, transportation infrastructure, and other support systems. This setup gives some room for countries to invest in important defence-related projects without having to spend everything on weapons.

The 3.5% is meant to cover the hard military power NATO needs, especially with the rising threat from Russia. NATO plans to significantly increase its air defence systems and add many more tanks and armoured vehicles. Money spent on military aid to Ukraine will likely be counted toward this portion as well.

The remaining 1.5% is meant for projects that support military operations, like building stronger bridges, better roads, and improving cyber protection. These things are essential for moving military equipment and responding quickly to threats. Some countries, like Italy, are hoping to count long-planned infrastructure projects under this part of the spending.

To ensure countries stick to the agreement, each NATO member will have to report annually on their progress. Although an earlier idea to force steady yearly increases was dropped, the alliance will review the situation in 2029 and could update the spending targets. There’s also the political pressure of not wanting to upset Trump, especially if he returns to power.

Some countries, like Spain, believe they’ve worked outside deals to avoid meeting the full 5% target. However, NATO’s chief has made it clear that no country is officially exempt, and all members are expected to increase their defence efforts.