US Pressures NATO on Spending as Nuclear Hosting Expands

The United States has escalated its criticism of NATO allies over defense spending during the Shangri-La Dialogue in Singapore. U.S. Defense Secretary Pete Hegseth commended Asian partners for boosting military budgets and aligning with Washington amid rising tensions with China, but urged Western Europe to take note and increase their own investments.

Hegseth's remarks come as President Donald Trump's administration continues to pressure European governments to spend more on their militaries. The U.S. has announced plans to withdraw 5,000 troops from Germany and reduce certain military capabilities available to NATO during crises by roughly one-third to one-half, including strategic bomber planes, fighter jets, and some naval assets.

European officials have insisted that NATO remains resilient despite the U.S. criticism. A senior NATO official downplayed the significance of the U.S. troop withdrawal, stating that it was already planned and would not affect the alliance's cohesion. German State Secretary Nils Hilmer announced that Berlin is accelerating military investment regardless of future U.S. deployments.

European defense ministers also used the forum to reassure Asian partners about NATO's credibility beyond its immediate neighborhood. French Defense Minister Catherine Vautrin emphasized that NATO's robustness in Europe, particularly in defending Ukraine against Russian aggression, was crucial for its credibility in Asia. Norwegian Defense Minister Tore Sandvik noted that security theatres are increasingly intertwined, with North Korean troops fighting in Ukraine.

The U.S. is considering expanding its nuclear weapons-hosting capability to more European NATO member states. Currently, six NATO members— the U.K., Germany, Italy, the Netherlands, Belgium and Turkey — participate in the alliance's nuclear weapons-sharing arrangements. According to a report by Financial Times, cited by CNBC, this group could now be expanded to include additional NATO countries in Europe.

The possible expansion comes as the White House looks to scale back conventional military support to the alliance and Europe looks to reduce its reliance on Washington by boosting defense spending amid concerns over the U.S.' commitment to the security pact. A NATO official told CNBC that the organization 'continuously monitors' the security environment and 'adapts as needed.'

Analysts suggest that a larger nuclear deployment in Europe would boost certain defense names involved in the manufacture, maintenance and parts supply chain for dual-capable aircraft, including BAE Systems, Lockheed Martin, Rolls-Royce, Northrop Grumman, RTX, Cobham, Qinetiq. Dan Coatsworth, head of markets at AJ Bell, noted that these aircraft cost significant sums just to get in the air and much more when factoring in ongoing maintenance.