Spend More or Lose U.S. Support: How Washington Is Rewriting the Rules of Its Asian Alliances

The ballroom of the Shangri-La Hotel in Singapore has hosted some of the most consequential security speeches of the 21st century. Defense ministers, generals, and diplomats from across the Indo-Pacific gather each year at the International Institute for Strategic Studies' annual dialogue — a forum built precisely on the kind of multilateral consultation and diplomatic choreography that has defined the postwar security order. The event is, in many ways, a temple to the rules-based international order.

It was the perfect venue for Pete Hegseth to announce that era was over.

Speaking on May 30, 2026, at the 23rd IISS Shangri-La Dialogue, the U.S. Secretary of Defense — or "Secretary of War," as the Trump administration has formally rebranded the department — delivered a blunt ultimatum to America's allies across the Asia-Pacific: raise defense spending to 3.5 percent of your gross domestic product, or face a fundamental shift in how Washington does business with you.

"The era of the United States subsidizing the defense of wealthy nations is over," Hegseth told the assembled defense chiefs. "We need partners, not protectorates. We seek alliances built on shared responsibility, not dependency."

The line landed with the force of a policy declaration. But it was what followed that sharpened the threat. Nations willing to meet the benchmark would be rewarded handsomely. Those who refused would pay a price. "For those nations," Hegseth said of high spenders, "we are moving them to the front of the line: expedited arms sales, deep industrial-base collaboration, expanded intelligence sharing." As for the rest: "Allies who refuse to step up and carry their own weight for our collective defense will face a clear shift in how we do business."

Then came the line that will likely define the speech in diplomatic history: "Less Shangri-La, more ships, more subs."

The Demand Nobody Currently Meets

The 3.5 percent GDP threshold Hegseth set in Singapore is not aspirational — it is, by any reasonable accounting, nearly impossible for most American allies in the region to meet in the near term. And the gap between the demand and the reality on the ground reveals just how transformative — or disruptive, depending on your vantage point — the Trump administration's approach to alliance management has become.

According to data published by the Stockholm International Peace Research Institute (SIPRI), none of Washington's major partners in Asia currently comes close to the 3.5 percent mark. Singapore and South Korea spend roughly 2.8 to 3 percent of GDP on defense, and are the closest to the new standard. Japan, after a historic decade-long military buildup, is approaching 2 percent. Australia sits at approximately 2 percent as well. The Philippines and others in Southeast Asia spend significantly less.

SIPRI noted in an April 2026 report that Japan's military expenditure rose 9.7 percent in 2025 to reach $62.2 billion — equivalent to 1.4 percent of GDP and the highest share since 1958. Taiwan's spending rose 14 percent to $18.2 billion, or 2.1 percent of GDP, the largest annual increase on record. The trend is upward across the region — but the distance to 3.5 percent remains vast.

"U.S. allies in Asia and Oceania such as Australia, Japan and the Philippines are spending more on their militaries, not only due to long-standing regional tensions but also due to growing uncertainty over U.S. support," said Diego Lopes da Silva, Senior Researcher with SIPRI's Military Expenditure and Arms Production Programme, in April. "As in Europe, U.S. allies in Asia and Oceania are also under pressure from the Trump administration to spend more on their militaries."

That pressure, which has been building through bilateral meetings and pointed public statements for more than a year, crystallized in Singapore into something more formal: a numbered target, a carrot, and an unmistakable stick.

From NATO to the Pacific

To understand the Singapore speech, it helps to trace the lineage of the demand. The 3.5 percent figure for Asian allies did not emerge in a vacuum. It mirrors — at a reduced level — the campaign Trump has waged on NATO's European members, where he successfully pushed the alliance toward endorsing a new goal of 5 percent of GDP on defense spending by 2027. Hegseth himself praised the "near consensus" on that figure after a Brussels meeting with NATO counterparts earlier this year.

The logic in both cases is the same: the United States, which spent an estimated 3.38 percent of its own GDP on defense in 2024 and is now proposing a record $1.5 trillion military budget for fiscal year 2027, argues that allies are free-riding on American power while enjoying its protection.

But the application of that logic to the Indo-Pacific is more complicated than in Europe for several reasons. Asian alliances are structurally different — they are largely bilateral, hub-and-spoke arrangements centered on Washington rather than a collective treaty organization like NATO with shared command structures and mutual defense obligations. There is no Asian equivalent of Article 5. The politics of defense spending in Japan, South Korea, and Australia are also shaped by domestic constitutional, economic, and historical factors that make rapid military expansion genuinely difficult.

And yet, as Hegseth acknowledged in Singapore, the region is not standing still. He praised the Philippines for increasing its defense spending by 12 percent. He commended Japan for working to accelerate its defense transformation. He singled out South Korea, where President Lee has pledged to increase spending to 3.5 percent of GDP, as a model of burden sharing. He praised Australia, Singapore, Malaysia, Thailand, and Indonesia by name.

"There has been progress," Hegseth said. But progress, his speech made clear, is no longer sufficient.

A Region Caught Between Two Giants

The timing of the Singapore speech added a layer of complexity that diplomats in the room were quick to note. Hegseth delivered his address less than two weeks after a summit between President Trump and Chinese President Xi Jinping in Beijing — a meeting Hegseth said he personally witnessed.

"Just two weeks ago, President Trump and President Xi engaged in direct discussions in Beijing that reinforced this very foundation," Hegseth told the audience. "I bore witness to their hours of candid conversations. It was truly historic." The two leaders, he said, agreed that the United States and China should build a relationship of strategic stability based on fairness and reciprocity.

And yet in the same speech, Hegseth warned of "rightful alarm regarding China's historic military buildup and the expansion of its military activities in the region and beyond," and reaffirmed that American strategy is centered on "deterrence by denial" along the first island chain — widely understood as a strategy designed to counter the People's Liberation Army in any potential conflict over Taiwan.

Analysts who cover the region noted that the tone of this year's speech was markedly softer on China than Hegseth's address at the same forum in 2025, when he described the Chinese threat as real and potentially imminent, and said the PLA was rehearsing for the "real deal." The shift reflects the détente that followed the Beijing summit — but it also creates a rhetorical tension: the administration is asking allies to spend dramatically more on military capabilities to counter China while simultaneously describing relations with Beijing as "better than they've been in many years."

That tension was not lost on the allies in the room, several of whom have their own complex economic relationships with China and are wary of being forced into an explicit anti-Beijing posture.

The Carrot and the Stick

Hegseth's framework in Singapore was notable for its transactional clarity. Countries that meet the 3.5 percent target receive tangible rewards: expedited arms sales, deeper intelligence sharing, and enhanced industrial base collaboration. Countries that refuse risk a "clear shift" in how the United States engages with them.

He specifically called out New Zealand as a "freeloader" — a sharp diplomatic rebuke from a close partner and member of the Five Eyes intelligence-sharing network. Wellington pushed back quickly, saying it was increasing defense investment.

The threat to condition alliance benefits on spending levels represents a significant departure from how Washington has historically managed its Pacific partnerships. For decades, the alliance framework was understood to be broadly unconditional — the U.S. provided its security umbrella as a matter of strategic self-interest, and while allies were encouraged to spend more, the relationship was not explicitly tied to specific numerical targets.

That model, Hegseth argued, produced dependency. "For too long, the security of this region has rested disproportionately on American military power," he said. "This is a burden the U.S. cannot and should not carry alone."

The harder question — which Hegseth's speech gestured toward without fully resolving — is whether conditioning alliance benefits on spending levels actually strengthens American security or weakens it. Skeptics argue that allies who feel squeezed or humiliated may diversify their security relationships in ways that reduce American influence, or that the uncertainty itself may create the kind of strategic ambiguity that emboldens adversaries.

The Allies Respond

Australia's response to Singapore illustrated the diplomatic tightrope allies are now walking. Prime Minister Anthony Albanese, asked about Hegseth's call for Canberra to reach 3.5 percent "as soon as possible," gave a carefully measured reply: the government would decide on Australia's defense capability needs before announcing spending figures. Albanese noted that Australia had already committed to spending hundreds of billions on American-manufactured nuclear submarines under the AUKUS agreement — a commitment the Pentagon had praised.

Australia had in April 2026 already pledged to raise defense spending to 3.0 percent of GDP by 2033, a significant increase. But that fell short of the new American threshold, and the gap exposed a fundamental problem: allies that are already spending more are being told it is not enough, without a clear explanation of what military capability the number is meant to purchase.

Japan faces perhaps the most dramatic fiscal challenge. With the world's highest debt-to-GDP ratio among advanced economies, Tokyo is already under significant strain from its ongoing defense buildup to 2 percent of GDP. The Center for Strategic and International Studies has noted that South Korea's and Taiwan's pledges to reach 3.5 percent may raise expectations for Japan's next defense plan, due by the end of 2026. But the fiscal math is daunting.

South Korea's position is illustrative of the political complexity. President Lee's pledge to reach 3.5 percent — cited approvingly by Hegseth — came in the context of an ongoing debate in Seoul about troop costs, the future of the U.S.-Korea alliance, and the strategic implications of U.S. engagement with North Korea. Trump publicly criticized South Korea in April 2026 for not providing enough assistance during the Iran conflict, arguing that Seoul, which depends on the Strait of Hormuz for its energy supplies, should play a greater role in securing it. The criticism stung — and it illustrated that the spending demand is not purely a Pacific security issue. American allies are increasingly expected to contribute to American military operations in theaters far beyond their own regions.

The Deeper Doctrine

Beneath the specific dollar figures, Hegseth's Singapore speech articulated a wholesale philosophical reorientation of American alliance management — one that is likely to outlast any individual spending commitment.

The speech was framed around what he called "practical realism" — a posture that eschews what he called the "toothless, utopian, and globalist course of foreign policy" in favor of explicit national interest alignment. "The bedrock of a durable partnership is not based on idealistic values," Hegseth said, "but on the concrete alignment of national interests."

The speech was, in effect, a rejection of the postwar liberal internationalist framework that undergirded American alliances for eight decades — the idea that shared values, multilateral institutions, and a rules-based international order were themselves strategic goods worth maintaining. In its place was a straightforward transactional logic: you pay for what you get, you contribute or you do not receive.

"We don't need more conferences," Hegseth told the assembled diplomats and defense ministers at one of the region's most important conferences. "We need more combat power."

For Southeast Asian defense officials in the audience who had come to Singapore precisely because they valued the diplomatic forum Hegseth was disparaging, the line was jarring. Many privately welcomed his reaffirmation of Washington's commitment to the region — but some voiced serious concerns about the feasibility of meeting the spending demands, and about the broader message the administration was sending about what kind of ally America intended to be.

What Comes Next

The Singapore speech sets up a series of consequential tests in the months ahead. Japan's next defense plan is due by the end of 2026 and will be scrutinized for whether Tokyo is willing to commit to targets that approach the 3.5 percent threshold. Australia's path to 3 percent by 2033 is now likely to face renewed American pressure to accelerate. South Korea's actual budget allocations will be watched closely to see whether the presidential pledge translates into appropriated funds.

And there is the broader question of whether the explicit conditionality Hegseth introduced will survive contact with strategic reality. The United States needs its Pacific alliances — for basing access, intelligence sharing, logistics, and the political legitimacy that comes with operating as part of a coalition rather than alone. Those needs do not disappear because Hegseth declared the era of subsidized defense over.

What is clear is that the rules of the relationship have changed — or at least the rhetoric has. Whether allies can or will meet the new benchmarks, and whether Washington will follow through on its implicit threats if they do not, is a story that will unfold over years, not months. But in the ballroom of the Shangri-La Hotel, on the morning of May 30, 2026, the American defense secretary said something that cannot easily be unsaid.

Less Shangri-La, more ships, more subs.

The region is listening.

All quotes attributed to Secretary Hegseth in this article are drawn from the official "As Delivered" transcript of his May 30, 2026 remarks at the IISS Shangri-La Dialogue, published by the U.S. Department of Defense, U.S. Embassy Singapore, and United States Forces Korea. Defense spending figures are sourced from SIPRI and Newsweek's reporting on current alliance spending levels.