Ms. Khyati Singh, Research Analyst, North America and Strategic Technologies Centre, Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA), spoke on “Transactional Alliances: How Trump Has Reshaped Burden Sharing Debates” at the Monday Morning Meeting held on 23 June 2025. Dr. Rajorshi Roy, Associate Fellow, Europe and Eurasia Centre, MP-IDSA moderated the session. Scholars of the Institute attended the meeting.

Executive Summary

The session examined how Donald Trump transformed U.S. alliance policy through a transactional approach, treating security commitments as financial exchanges. His “pay up or else” strategy, demanding allies increase defence spending significantly, yielded results with more North Atlantic Treaty Organisation (NATO) members meeting spending targets and substantial increases in total alliance defence budgets. However, this approach fractured alliance cohesion, weakened Western unity against China, and prompted European pursuit of defense autonomy, raising questions about whether short-term financial gains justify long-term alliance fragmentation.

Detailed Report

The moderator, Dr. Rajorshi Roy, noted that several pillars of U.S. foreign policy, especially the post–World War II U.S.-led alliance system, have been upended under the Trump administration. He highlighted the traditional US approach to burden sharing of security where allies were seen as strategic assets rather than financial burden. Today, however, President Trump has questioned the U.S. participation in NATO and demanded allies raise defence spending from existing below 2 per cent of their GDP to over 5 percent. The seemingly US transactional approach has been extended to Indo-Pacific partners like Japan and South Korea as well. .

Ms. Khyati Singh explained that Trump’s Presidency ushered in a transactional view of alliances, demanding short-term bargains in exchange for U.S. security. He repeatedly branded NATO “obsolete,” threatening withdrawal unless members met higher defense spending targets with a clear message: allies must “pay up” or risk losing U.S. support.

Trump’s “America First” doctrine, formalised in the 2017 National Security Strategy, placed U.S. sovereignty above multilateral commitments, declaring the United States “will always choose independence and cooperation over global governance.” This transactional view manifested at the 2018 Brussels Summit, where Trump publicly scolded Germany for under-investing in defence, and at a 2024 South Carolina rally, where he told ‘delinquent allies’ they couldn’t count on U.S. protection unless they “paid their bills.”

Ms. Singh clarified that burden sharing debates aren’t new—previous presidents addressed this issue through softer diplomatic approaches. However, President Trump’s approach was distinct: he cast partners as economic dependents rather than strategic allies, using public shaming, troop withdrawal threats, and explicit “pay or else” demands. This heightened transatlantic tensions while prompting several allies to accelerate defence budgets, but exposed fractures in alliance cohesion by prioritising bilateral deals over collective strategy.

President Trump’s pressure campaign yielded significant results in defence spending increases across NATO members and prompted restructuring of cost-sharing formulas. After 2021, Trump remained influential in foreign policy debates, with his comments prompting Congressional safeguards requiring two-thirds Senate approval for NATO withdrawal. By mid-2025, his “deals not vows” approach extended to AUKUS, with demands for Australia to increase defence spending significantly.

From a geopolitical perspective, Trump’s confrontational policies weakened Western unity when cohesion was needed to counter China. While he designated Beijing as the chief “pacing challenge,” the resulting transatlantic rift created opportunities for China. European leaders began pursuing greater defence autonomy, reviving plans for an EU military headquarters and exploring independent arrangements.

Domestically, Congress responded with legislative safeguards around NATO commitments, while public opinion remained solidly pro-NATO. Ironically, Trump’s “pay up” demands coincided with a record high in Pentagon budgets and, under Biden, continued defence spending increases driven by strategic competition rather than alliance disputes.

Ms. Singh concluded that Donald Trump’s transactional approach to alliances—treating security commitments as financial exchanges—led to increased defence spending by allies but at the cost of trust and cohesion. His rhetoric broke diplomatic norms, prompting partners to seek greater autonomy. The era of “Transactional Alliances” has reframed burden sharing debates and exposed the true costs of collective defence. Whether this results in a more balanced system or enduring fragmentation remains to be seen, but the question “Where is the profit?” is better suited to a businessman than the President of the United States.

Dr. Rajorshi, in his closing remarks, mentioned that the key takeaway of the discussion was that appears to be a recalibration among traditional US allies, especially as there are now questions regarding credibility of US as a strategic partner.

Q&A Session

Participants raised questions pertaining to various themes like the impact of President Trump’s attitude towards burden sharing on countries around Russia (particularly the Baltic states), implications of Marco Rubio joining the cabinet given his previous position on NATO, Trump’s claims about European under-contribution despite increased spending data, India’s role in QUAD, use of tariffs as geopolitical tools, permanence of transactional approaches, benefits to China from this strategy, burden sharing mechanisms and funding, India’s potential as a defence partner, China’s dual-use technology stakes in Europe, Trump’s transactional relationship with Israel, Middle East conflict costs, and the “Make America Great Again” (MAGA) movement’s split on Israel policy.

The Speaker provided detailed and insightful responses to the comments and queries received from the attendees.

The Report was prepared by Ms. Meghna Pradhan, Research Analyst, North America and Strategic Tehnologies Centre, MP-IDSA.