Early Monday morning, President Trump sent out tweets repeating a tired inaccuracy: that the United States pays too much to protect Europe and gets nothing in return. Trump claimed — without evidence — that the United States must “be treated fairly, which it hasn’t, on both Military and Trade.”
He said the United States pays “LARGE portions of other countries military protection,” which is flat-out wrong. And he said the United States loses “hundreds of billions of dollars” to the European Union in trade deficits, a gross exaggeration.
The United States does not foot the bill for any European country’s security forces.
Trump seems to be referencing an old talking point about the United States paying more than its fair share toward NATO. But his framing is misleading. Countries don’t pay into some kind of specific NATO fund. Rather, each member nation agrees to dedicate a certain portion of its gross domestic product toward its own armed forces. In the past, Trump has objected to several NATO countries not spending at least 2 percent of their GDP on defense.
Currently, six countries (out of the 29 NATO members) hit that target: Greece, Estonia, Poland, Latvia, Britain and the United States.
But NATO made the 2 percent requirement mandatory only in 2014, and it gave member states until 2024 to hit that goal.
“Trump’s comments misrepresent the way NATO functions,” former U.S. ambassador to NATO Ivo Daalder told us last year, after the president made similar remarks. “The president keeps saying that we need to be paid by the Europeans for the fact that we have troops in Europe or provide defense there. But that’s not how it works.”
In a report on this issue, the Center for Strategic and International Studies wrote that “the Trump Administration’s focus on military burden sharing as the percent of a nation’s economy or GDP devoted to defense is a dangerously meaningless criteria for judging useful defense efforts.”
Trump also exaggerated the trade deficit between the United States and Europe. In 2017, the E.U. had a $101 billion trade surplus with the United States. As the New York Times explained, the president often fails to include trade in services such as law, finance and technology when calculating that number.
He does so even though his own advisers have highlighted the importance of trade in services. The U.S. economy has shifted “from manufacturing and toward service provision industries” in recent decades, according to a report by the Trump White House in March. “Focusing only on the trade in goods alone ignores the United States’ comparative advantage in services.”
Additionally, most economists don’t see a deficit as a “loss” for the United States. As the New York Times put it:
“Most economists do not see the trade gap as money ‘lost’ to other countries, nor do they worry about trade deficits to a large degree. That’s because trade imbalances are affected by a host of macroeconomic factors, including the relative growth rates of countries, the value of their currencies, and their saving and investment rates.”