A single figure has exposed all the contradictions in Washington's Asia strategy: 3.5% GDP. This is the level of defense spending that U.S. Secretary of Defense Pete Hegseth is demanding that Asia's allies and partners achieve — a threshold that, according to the International Institute for Strategic Studies (IISS), most Southeast Asian economies cannot meet given budget competition with infrastructure, healthcare, and education. According to Channel News Asia, regional analysts view this demand as "unrealistic" and potentially counterproductive at precisely the moment when Washington needs these partners most.
The problem goes beyond the numbers. The real mechanism behind this story is a geopolitical paradox: the U.S. is simultaneously demanding that Southeast Asia share the defense burden, while Washington's own trade and economic policies are eroding the foundation of trust that alliances need to function. When both these forces operate simultaneously, the result is not neutral — it is acceleration toward Beijing.
Why 3.5% Is Unrealistic for Southeast Asia
To put this number in perspective: even NATO members in Europe are struggling to reach the 2% GDP threshold — a minimum level that the alliance has debated for decades. Hegseth's 3.5% demand far exceeds the highest requirement Washington has ever placed on Europe.
For Southeast Asian economies — where millions of people are still in the early stages of middle-class development, where public health systems lack sufficient coverage, and where transportation infrastructure remains the top development priority — defense spending at that level means drastic cuts in other areas. This is not a technical decision, but a highly sensitive internal political decision for every government in the region.
According to Channel News Asia, expert Joshua Kurlantzick of the Council on Foreign Relations assesses that punishing the Philippines or Thailand — two countries facing real pressure from China — over low defense spending is "counterproductive." Both nations are navigating direct geopolitical pressure, and Washington adding another layer of pressure from the U.S. side does not strengthen the alliance — it erodes it.
The core issue is that Washington is applying a NATO template to a region with entirely different structures. ASEAN was built on principles of non-interference and consensus — not on legally binding collective defense obligations. Rigid NATO-style defense spending requirements in that environment are not only economically unfeasible, but diplomatically misguided.
The Trap: U.S. Economic Policy Undermines the Foundation Defense Needs
This is the real mechanism to worry about. According to Channel News Asia, Kurlantzick points out that precisely at the moment Washington calls on Asian partners to invest more in collective defense, U.S. trade and economic policy is continuously eroding the trust and goodwill that make alliances valuable in the first place.
This is not mere rhetoric. The tariffs that the Trump administration imposed on Southeast Asian goods during 2025-2026 have forced many governments in the region — including treaty allies — to recalculate their strategic benefits. When a partner asks you to spend more on collective defense while simultaneously imposing tariffs on your exports, the internal political calculus becomes very simple: this is not a balanced alliance — this is an asymmetrical relationship.
And Beijing understands this well. Also according to Channel News Asia, Chinese leaders are actively courting ASEAN nations, offering deeper economic integration as a stable and predictable alternative to an increasingly erratic Washington. This is not passive diplomacy — this is a deliberate and consistent strategy of filling the void.
Aisha Kusumasomantri, a defense researcher at the Indo Pacific Strategic Intelligence research institute based in Jakarta, according to Channel News Asia, assesses that the U.S. should try to "persuade" Southeast Asian allies to support burden-sharing policies rather than "confront" them, while warning Washington not to escalate punitive measures while Beijing is deploying highly effective public diplomacy in the region.
The key point here is that relative power is shifting not because China is growing stronger in absolute terms, but because the U.S. is weakening itself in relative terms — through inconsistent economic policy and counterproductive diplomatic pressure.
Southeast Asia's Real Leverage — and How the Region Will Use It
Hunter Marston's analysis from the Lowy Institute, according to Channel News Asia, highlights a reality many Washington observers overlook: Southeast Asia is not a weak party with no cards to play.
Countries like Indonesia possess strategic minerals and military access that the U.S. needs for its power projection capabilities in Asia. The Philippines, with its treaty alliance with Washington, is "far more important" to U.S. force deployment capabilities in the region — to the point that Washington can hardly let Manila suffer real consequences for lower defense spending. Marston assesses that Southeast Asian nations will leverage comparative advantage in one area to avoid coercion in others — minerals in exchange for defense flexibility, military base access in exchange for tariff exemptions.
This is how Southeast Asia has always operated in great power geopolitics: not by standing firmly on one side, but by diversifying leverage. According to Channel News Asia, Muhammad Faizal, a researcher at the S. Rajaratnam School of International Studies (RSIS) in Singapore, assesses that countries unable to meet U.S. defense spending expectations may try to reassure Washington by deepening bilateral cooperation in other defense or non-military areas.
But the most notable direction, also according to Faizal via Channel News Asia, is that ASEAN nations will strengthen relationships with middle-power nations like Turkey, India, Japan, and Australia as a way to manage dual risk — not being coerced by Washington while not being completely drawn into Beijing's orbit. This is a rational geopolitical defensive strategy and is becoming increasingly common.
For Vietnam — a special case within ASEAN because it has direct territorial disputes with China in the South China Sea, deep economic ties with Beijing, and is an increasingly important partner of Washington — this defense spending pressure places Hanoi in an extremely complex situation. The country will not abandon the advantage of its relationship with the U.S., but neither can it ignore the reality that sharply increased defense budgets would have significant domestic economic consequences and could be interpreted by Beijing as a hostile signal.
The Vietnamese Community in America Faces a Difficult Problem
For the Vietnamese community in the United States — particularly the generation that lived through the collapse of an American ally because Washington withdrew — this debate over defense burden carries very specific historical weight. Many in the community in Little Saigon in Orange County, California, or in densely Vietnamese areas of Houston and Virginia view Southeast Asia not as an abstract zone on a geopolitical map, but as the homeland of parents, of family, of millions of people living under the shadow of U.S.-China competition.
The biggest concern in this community is not how much of GDP Southeast Asia spends on defense. Rather, it is whether the U.S. is a trustworthy partner — a question that the personal history of many Vietnamese-American families has already answered bitterly. When analyses indicate that trust in the U.S. is declining while trust in China is rising in the region, according to Channel News Asia via Kurlantzick's assessment, this is not just a survey statistic — it is a warning.
The Real Risk: Washington Is Pushing the Region Toward the Adversary It Wants to Contain
Finally, according to Channel News Asia, Kurlantzick warned of a "real risk" that U.S. pressure will produce unintended consequences: pushing smaller nations closer to the very country the U.S. is trying to push them away from. He also noted that China's favorability index in the region is currently higher than the U.S., and the war in Iran has caused a clearly negative impact on public opinion about America in the region.
This is the crux of the entire story. The mechanism Hegseth wants to activate — more defense spending equals stronger alliance — only works when there is a foundation of trust. When that foundation is eroded by punitive trade policy and erratic diplomatic behavior, then increased spending pressure does not strengthen the alliance — it creates centrifugal reaction.
The common argument heard in Washington is that Southeast Asia needs the U.S. more than the U.S. needs Southeast Asia, so countries in the region will ultimately have to comply. This argument overlooks a simple geographic reality: Southeast Asian countries have no choice about having China as a near neighbor. They are forced to find a way to coexist — and if Washington makes that choice economically painful, their response will not be submission, but diversification.
Most likely, the scenario will unfold as Marston and Faizal outline: Southeast Asian countries will negotiate case by case, using minerals, military bases, and technical cooperation as leverage to avoid direct defense pressure — while simultaneously strengthening relationships with India, Australia, and Japan as a second layer of insurance. The result would not be Southeast Asia "choosing China" — but the region increasingly not needing to "choose the U.S." And that is exactly what Beijing wants.
Read the full original Channel News Asia report at the source link below.