• Trump continued his tirade against NATO members he says aren't paying their "fair share."

• As Russia's war in Ukraine threatens NATO, the Baltic states say they're investing in defense more than ever.

• The efforts include increased spending, buying new weapons, and reinstating conscription.

Former President Donald Trump has long expressed his vitriolic opinions on NATO, often suggesting some European members don't pay their "fair share" and take advantage of the US.

But as Russia's bloody war in Ukraine enters its third year, and the threat to NATO countries, particularly those on Russia's borders, grows, the Baltic states are investing in their defense more than ever.

At a Hudson Institute event in Washington DC on Monday morning, days before the 20th anniversary of their countries' ascensions into NATO, the foreign ministers of Lithuania, Latvia, and Estonia explained the gravity of the current war in Ukraine and what it could mean for future Russian aggression, particularly towards NATO members.

"We have no other options" besides supporting Ukraine and ensuring it wins, Estonian Foreign Minister Margus Tsahkna said, highlighting that NATO and the West "would pay" heavily should Russia win and expand its ambitions to conquering other neighbors.

Experts and officials have long suggested that should Russia be successful in beating Ukraine, Russian President Vladimir Putin would feel emboldened to continue his conquest, which could even involve invading NATO members, triggering full-scale war between the nuclear-armed adversaries.

During the talk, the three ministers also spoke to the US' shaky involvement in supporting Ukraine, with the latest aid package stuck in congressional limbo. Many countries, including China, are watching what will happen at the end of the war, Tsahkna said, "So, I think that [the] US must wake up as well, showing the leadership more because Europe is doing more right now."

The talk came just on the heels of Trump's most recent attack on NATO members who he deems aren't paying their 'fair share." Last week, the former president said that he would keep the US in NATO should European countries pay and "play fair." He said the US "was paying 90% of NATO," and that without the US, NATO "literally doesn't even exist."

"It's more important for [European countries] than it is to us. We have an ocean in between [us and] some problems," Trump said. "They took advantage of us on trade."

The NATO alliance benefits from the US's vast nuclear arsenal and roughly 100,000 US troops in Europe. The alliance has set guidelines for each ally to spend at least 2% of its GDP on its military; 18 of the 32 member states are expected to meet this goal this year.

This is far from the first Trump has complained about US involvement in NATO or made erroneous claims about the alliance. Last month, Trump's comments at a campaign rally that he would "encourage" Russia 'to do whatever the hell they want" to NATO allies who aren't hitting the spending target received widespread criticism.

During his first term as president, Trump often bashed NATO, raising anxieties that the US would either pull out of the alliance or not respond to an Article 5 situation, when an ally is attacked and the rest of the alliance comes to its defense. Now, if Trump were to be reelected this year, he'd have a much harder time with that, as Congress passed a bill in December that prevents a president from withdrawing from NATO without Congressional approval.

Trump's comments have often missed the point on the progress made across NATO to both deter Russia and boost defenses. Many European states, the Baltics included, have long sent military aid to Ukraine and recently upped their assistance packages. Just last week, France and Germany agreed to co-produce military equipment for Ukraine on Ukrainian soil, a major step to getting troops spare parts, munitions, and complete weapons systems.

Germany also agreed to send a hefty aid package, but Chancellor Olaf Scholz is still refusing to send long-range Taurus missiles after months of debate.

And earlier this month, French President Emmanuel Macron refused to rule out sending troops to Ukraine. While his stance isn't held by many other European leaders, it does indicate a growing view that the war in Ukraine is becoming, as Macron said, "existential" to Europe.

The Baltics understand that sentiment well; the threat of Putin's aggression is right on their doorstep. While talking about how NATO's military spending compared to Russia's, Latvia Foreign Minister Krišjānis Kariņš emphasized how the Baltic countries are preparing to deter and counter Russia.

"So in Latvia, and in my neighbors, we go full out," Kariņš said. "We invest in our own defense, budgeted 2.4% this year, it looks like we're going to hit 3% this year, and we will be going beyond that in the future as well."

Many NATO members — 18, according to projections from earlier this year — are spending at least 2% of their gross domestic product on defense, while the remaining members are being urged to swiftly meet that target. That's seven more than 2023. In 2014, only three NATO allies met that threshold.

Last year's numbers indicated Poland spent 3.90% of its GDP, just above the US at 3.49% and Greece at 3.01%. Many nations bordering Russia or Belarus also increased their spending. Estonia spent 2.73%, Lithuania 2.54%, and Latvia 2.07%. Finland, Romania, and Hungary also spent over the 2% threshold.

Kariņš also said there were other major steps being taken to prepare defenses for Russia. "We've reinstated conscription, so we're building up our armed forces," an unpopular move that Latvian President Edgars Rinkēvičs is pushing other NATO members to do, too. "Nobody wants to fight," Rinkēvičs told The Financial Times. "But the problem is nobody wants to be invaded as well. And nobody wants to see Ukraine happening here."

Kariņš also said Latvia and the other Baltic states were purchasing more weapons systems and increasing NATO's military presence in the Baltics. Just last month, Germany announced plans to deploy two combat battalions, or around 5,000 troops, to Lithuania, the first such move for the country since World War II. The goal is to deter Russian aggression against the country, as well as reinforce Lithuania's defenses.

And this past weekend, the US approved a total $228 aid package to Estonia, Latvia, and Lithuania, which will go towards fast-tracking military infrastructure and development projects involving air and maritime defenses, as well as land forces.

NATO Spending by Country Per Capita: Top 15 Countries

we look at the NATO spending by country per capita and list the top 15 countries. You can skip our detailed analysis on the increase in defense expenditure by NATO’s European members after Russia’s invasion of Ukraine, and head over directly to NATO Spending by Country Per Capita: Top 5 Countries.

Moscow’s assault on Ukraine in 2022 sent shockwaves across Europe, signaling the return of war to the continent after decades of peace. Finland and Sweden are the latest countries to join NATO following the start of the war, while several other countries across the region are actively racking up their military expenditure to bolster national defense.

Global defense spending reached a record high of $2.2 trillion in 2022, according to the Stockholm International Peace Research Institute (SIPRI), with Europe witnessing its steepest rise in 30 years, having spent $480 billion in military expenditure during the year. NATO’s defense spending in 2022 was also 0.9% higher than in 2021, totaling $1.2 trillion. Final, aggregated figures for 2023 are still awaited, however, another recent report by SIPRI noted a 94% increase in arms imported by European countries between 2019-2023, compared to the previous five-year period from 2014-18. The United States was the origin of 55% of the arms procured by Europe in the last five years.

The surge in military expenditure amid growing calls from the United States and NATO for members of the treaty to meet the expectation of spending at least 2% of their GDP on defense has created a boom in the armaments and aerospace industries. Lockheed Martin Corporation (NYSE:LMT)’s full-year financial statements for 2023 reported a 2.4% increase in revenue compared to the previous year to total $67.6 billion. The company’s net profit has also grown from $5.7 billion in 2022 to $6.9 billion in 2023.

NATO members are actively pursuing measures to upgrade their fleet of fighter jets, by replacing aging aircraft with newer, advanced fighters – most notable of which is Lockheed Martin Corporation (NYSE:LMT)’s F-35. Last year, Canada announced it was buying 88 of these fifth-generation fighter jets to enhance Arctic security and also get closer to NATO’s spending expectations. Earlier in December 2022, Berlin also clinched a $8 billion deal with the United States to procure 35 F-35 fighters, with the first set of planes set to be delivered in 2027.

Lockheed Martin Corporation (NYSE:LMT)’s stock price has risen more than 9% since Russia’s invasion of Ukraine in 2022. RiverPark Advisors made the following comment about the company in its Q3 2023 investor letter:

RTX Corporation (NYSE:RTX)’s figures are also soaring. The company generated revenues of $68.9 billion in 2023, a year-on-year increase of 3%, with contracts continuing to flow to the company from NATO countries seeking to enhance national security. This week, RTX Corporation (NYSE:RTX) was awarded a $1.2 billion contract to develop and supply Germany with Patriot air and missile defense systems.

Hungary also boosted its aerial security in November 2023 after it received delivery of the first two units of the NASAMS air defense system from RTX Corporation (NYSE:RTX) and Kongsberg Defence & Aerospace. According to a report in Bloomberg, the American defense conglomerate is also in talks with French aerospace company Safran, with the latter showing interest in RTX Corporation (NYSE:RTX)’s flight control units.

Northrop Grumman Corporation (NYSE:NOC) on the other hand generated $39.3 billion in sales in 2023, at a 7% increase in comparison to 2022. The company reported impressive growths in its aeronautics, defense, mission, and space systems. Projecting a sustained demand for its weapons in 2024, Northrop Grumman Corporation (NYSE:NOC) has forecasted $41 billion in revenue for this year. Its share price has increased 16% since the beginning of the conflict in Ukraine.

The company, in June last year, modernized the air defense capabilities of Latvia, Lithuania, and Estonia under a $14.3 million fund provided by the US. Northrop Grumman Corporation (NYSE:NOC) is also cooperating with Terma, a Danish company, on electronic warfare training in Northern Europe.

Methodology

We have listed the top 15 NATO countries in ascending order of their estimated military spending per capita in 2023. Data has been sourced from NATO’s July 2023 press release titled Defence Expenditure of NATO Countries (2014-2023). In the case of two or more countries having the same expenditure per capita, we gave a higher ranking to the country that was spending a greater percentage of its GDP on defense.

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Let’s now head over to the list of NATO spending by country per capita.

NATO Spending by Country Per Capita: Top 15 Countries:

15. Italy

Military Spending Per Capita: $484

Italy’s GDP was estimated to be $2.19 trillion in 2023 by the IMF, with over $33 billion incurred on military expenditure, which was equivalent to 1.46% of its GDP. According to NATO, Italy’s estimated per capita military spending for 2023 is $484.

14. Belgium

Military Spending Per Capita: $502

Belgium has the second lowest percentage of GDP spent on defense among all NATO members, measured at 1.13% last year. Despite that its military spending per capita is above $500. This figure is likely to rise as Brussels plans on increasing its military expenditure to 1.54% of the GDP by 2030.

13. Estonia

Military Spending Per Capita: $578

Estonia borders Russia to the East. The country’s military spending has continuously (since 2015) been above NATO’s 2% target for member states. Last year, Estonia allocated 2.73% of its GDP on defense expenditure – the fourth highest in NATO. The per capita military spending in Estonia has increased by nearly 75% over the last decade, from $328 in 2014 to $378 in 2023.

12. Canada

Military Spending Per Capita: $622

Canada boasts one of the most powerful militaries in the world. The country spent $28.9 billion on defense in 2023, which amounted to 1.38% of its GDP. In March this year, Canada announced $1.3 billion in defense spending cuts over the next three years, which is likely to reduce the country’s military spending per capita.

11. Greece

Military Spending Per Capita: $622

Greece’s defense spending soared from $5.2 billion in 2014 to $8.5 billion in 2022, before dropping slightly to $7.1 billion last year. Despite the dip, it has the third highest share of military spending as a share of the GDP (3.01%), and is among countries with the highest military spending per capita in NATO.

10. Poland

Military Spending Per Capita: $657

Poland had the highest percentage of military spending as a share of the GDP (3.9%) in 2023 among NATO members. This is a significant jump from 2.42% in 2022. As a result, since 2022, the country’s military spending per capita has more than doubled from $325 in 2020 to $657 now.

9. Germany

Military Spending Per Capita: $677

Germany is on ninth spot in our list of NATO spending by country per capita. However, the country has consistently remained under target as far as NATO’s 2% spending goal is considered. Last year, it only spent 1.57% of the GDP on defense. In February, the government pledged to meet NATO’s goal by next decade, and stated that its defense spending could rise up to 3.5% of the GDP by then.

8. France

Military Spending Per Capita: $737

France boasts one of Europe's strongest and largest militaries, and spent 1.9% of its GDP on defense expenditure in 2023. Last January, French president Emmanuel Macron announced to raise the country’s military budget by 40% for 2024-2030 to enable the French military to be combat ready, amid the volatile situation in Ukraine. This move is likely to increase the country’s military spending per capita, which has grown by a meager 5% since 2019 ($700).

7. Luxembourg

Military Spending Per Capita: $773

Luxembourg has the lowest contribution of military spending as a share of the GDP in NATO (0.72%), but it is among countries with the highest spending per capita in the alliance. One factor for that is its tiny population of 640,000. Having said that, the country deserves credit that despite its small size, it has more than doubled its defense spending from $250 million in 2015 to an estimated $609 million in 2023, with its per capita military spending increasing 76% in this time period.

6. Netherlands

Military Spending Per Capita: $848

The Netherlands is in sixth position in the list of NATO spending by country per capita, with $848 being spent per head in the country on defense expenditure. In 2023, the Dutch government is estimated to have spent 1.7% of its GDP on military expenditure. With its economy crossing the $1 trillion mark, Amsterdam can look to further increase military spending to meet NATO’s 2% goal.

5. United Kingdom

Military Spending Per Capita: $965

The United Kingdom is one of the most powerful countries in the world, and a key member of NATO. The country is estimated to have spent over $68 billion on defense expenditure in 2022. However, its current military spending per capita figure is the lowest since $985 in 2018. It did briefly go past $1,000 in 2021 and 2022, but has dipped below in 2023, according to estimated figures released by NATO.

4. Denmark

Military Spending Per Capita: $1,000

Denmark spent 1.65% of its GDP on defense expenditure in 2023. It has the fourth highest military spending per capita among NATO members. The government has plans to spend over 20 billion euros over the next decade in a bid to raise its spending share closer to NATO’s 2% expectation, which will further boost its spending per capita from the current level of $1,000

3. Finland

Military Spending Per Capita: $1,153

Finland’s military spending per capita has increased from $647 in 2021 to $1,153 in 2023. It became the 31st member of NATO in April 2023, amid Russia’s invasion of Ukraine a year prior. The move prompted a warning from Moscow which threatened to bolster its defense in response. Finland shares a 1,340 kilometer border with Russia. Its defense budget for 2024 is 5% higher than in 2023, which is likely to further increase its percentage of defense spending as a share of GDP, which currently stands at 2.45%.

2. Norway

Military Spending Per Capita: $1,339

Norway has one of the highest military spending per capita in the world and ranks second among NATO members. The figure has consistently remained above the $1,100 mark since 2014, and grew to $1,339 in 2023. The country spent 1.67% of its GDP on defense expenditure last year, and has set a target to meet NATO’s 2% expectation by 2026.

1. United States

Military Spending Per Capita: $2,220

According to NATO, the United States is estimated to have spent over $860 billion on defense expenditure in 2023, which is more than double of all other members combined. It also has the highest spending by country per capita of $2,220 in the alliance, which is more than half as much as Norway’s, which finds itself at a distant second. The country has been consistently urging member nations to increase spending in order to meet NATO’s target to enable the alliance to be ready for challenges faced by its members.