There’s no shortage of measures that the United States’ major East Asian friends could spend an increased defence budget on.

NATO allies of the US have agreed to allocate 5 percent of GDP to defence and related spending. With the growing risk of simultaneous contingencies in the Taiwan Strait and on the Korean Peninsula, Taiwan, South Korea and Japan must also consider what credible deterrence really costs.

Spending at 5 percent of GDP, as demanded by US President Donald Trump, could fund vital capabilities in East Asia that would reduce overdependence on US forces, such as missile defence, precision strike and infrastructure resilience.

Whether East Asia follows the US-backed NATO model will shape regional defence and the global balance of US commitments.

In practical terms, the 5 percent benchmark signals a shift from reactive preparedness to forward-leaning deterrence. For Taipei, Seoul and Tokyo, it would mean assuming a more autonomous role in regional security to reinforce the US alliance framework. It would also send a clear message to Beijing and Pyongyang that the cost of aggression is rising.

Among the three, Taiwan has the strongest incentive—and arguably the greatest urgency—to raise spending. It currently allocates about 2.4 percent of GDP to defence, but faces a direct and escalating threat from China’s military coercion, which includes near-daily air incursions, grey-zone sabotage campaigns and disinformation operations.

A 5 percent target could provide Taiwanese defence with a further A$30 billion to A$33 billion annually—enough to significantly scale up mass production of such area-denial systems as sea mines, mobile anti-ship missiles and suicide drones. Taiwan could also accelerate hardening of points likely to be targeted in the opening hours of a conflict, such as ports, airfields and power grids.

Expanded funding could also support greater investment in fast-production drone swarms, mobile radar decoys and low-cost electronic warfare tools—all critical for disrupting Chinese landing operations. It could also allow Taiwan to preposition war stocks and invest in dispersed basing schemes, including underground fuel depots and highway strip runways.

However, greater spending must be met with greater cohesion. Taiwan’s defence strategy still suffers from gaps between civilian and military planning and from bureaucratic inertia that has slowed force reorganisation. Taipei must also develop flexible procurement pathways, as domestic defence production is still developing capacity and US arms deliveries have multi-year timelines. These pathways could include direct commercial sales, licensing and co-production with allies.

South Korea already spends more than most NATO countries in relative terms—around 2.7 percent of GDP—but increasing to 5 percent could increase defence funding by up to A$60 billion annually.

Along with increasing defence spending, Seoul will need to allocate it to capabilities that enhance both deterrence and resilience. One of the most pressing priorities is enhancing long-range precision strike capabilities. Outfitting F-35As with small diameter bombs would significantly improve Seoul’s capacity to target and disable North Korean transporter erector launchers in the early stages of a conflict. Additional investment in loitering munitions and AI-assisted targeting could further compress the kill chain, especially under satellite-degraded conditions.

Air and missile defence also demand urgent upgrades. While South Korea’s long-range missile program is progressing, full network integration with medium-range missile batteries and airborne surveillance systems remains a work in progress. With North Korea now testing solid-fuel intermediate range ballistic missiles and hypersonic glide vehicles, the speed and discrimination capabilities of interceptors must improve. A 5 percent budget would allow Korea to build a layered, resilient kill-web modeled on Israeli defence systems.

But perhaps most overlooked is the civilian dimension. In a dual-contingency scenario, North Korea may see an opportunity to strike the south while US forces are engaged in Taiwan. Seoul must expand hardened command posts, bunkers resistant to electromagnetic pulses, and population shelters across urban areas. Israel’s experience during its conflict with Iran has shown how civilian infrastructure can be weaponised. Survivability is as important as lethality.

While Japan’s strategic outlook has changed significantly since the release of its 2022 National Security Strategy, Tokyo’s current defence spending sits at around 1.8 percent of GDP. Raising it to 5 percent would nearly triple Japan’s defence budget, bringing it to more than A$300 billion annually and placing it among the world’s top three military spenders.

This would enable Tokyo to complete missile defence coverage of the Nansei Islands, importantly protecting it from Chinese anti-access and area denial systems. Japan could also expand its investment in uncrewed platforms designed for contested airspace and maritime grey-zone patrols around the Senkaku Islands.

Increased spending also allow for greater investment in operational command infrastructure, closing gaps in jointness between branches of the Japan Self-Defense Force. Deeper integration with United States Indo-Pacific Command structures—such as shared targeting frameworks or secure intelligence and surveillance fusion nodes at Yokota or Camp Zama—would dramatically improve responsiveness in a Taiwan contingency.

While public backing for increased defence spending has grown, strong reservations remain regarding offensive capabilities, even after the Japanese government’s official decision to acquire enemy base strike capability. Building a national consensus for 5 percent will require policy leadership and greater efforts to educate the public on the changing security environment.

For the United States, the implications are far-reaching. A more self-reliant trilateral frontline would allow the US to rebalance its force posture. Carrier strike groups could be more selectively deployed; rotational forces in Guam, Okinawa and Darwin could gain more breathing room; and munitions stockpiles could be conserved for high-leverage operations.

If NATO and Indo-Pacific partners approach the 5 percent goal, Washington may begin transitioning from forward first responder to strategic backstop—a role more suited to its global commitments. If Asian partners reach the threshold while Europe lags, it would accelerate the Pacific pivot. And if none of the US’s partners can move towards 5 percent, the risks of deterrence failure will grow. The US is already confronting defence industrial shortfalls and political gridlock at home. It cannot indefinitely uphold regional stability without meaningful burden-sharing.

The 5 percent figure forces US partners to confront a fundamental question: is deterrence worth the price of genuine capability, or are we content to fund symbolic preparedness?

For South Korea, Japan and Taiwan, the answer will define the next decade of security in East Asia.