Europe’s rearmament push drives global military spending to record $2.9 trillion despite U.S. pullback

global military spending hit a record $2.89 trillion in 2025, up for the 11th straight year, according to sipri. europe drove the increase, with spending up 14% to $864 billion, even as the u.s. cut its outlay by 7.5% after no new ukraine aid was approved. the u.s. still led at $954 billion, but the pentagon has requested about $1.5 trillion for fiscal 2027 — the largest request ever. germany's military spending rose 24% to $114 billion, pushing its defense burden to 2.3% of gdp — the first time above nato's 2% guideline since 1990. spain's spending jumped 50% to $40.2 billion, also crossing the 2% threshold for the first time since the target was set in 1994. in june 2025, nato members except spain outlined a long-term goal of 5% of gdp by 2035. asia and oceania spending rose 8.1% to $681 billion, the largest annual rise since 2009. taiwan's spending increased 14% to $18.2 billion, its biggest jump since at least 1988, as china conducted two major military exercises around the island and aircraft incursions hit a record 5,709. japan's spending rose 9.7% to $62.2 billion, the highest share of gdp since 1958, and tokyo signed its first warship export deal with australia. defense stocks surged: hanwha aerospace rose 193%, rheinmetall climbed 154%, and mitsubishi heavy industries gained 72.7%.