The Hague Summit decision to allocate 1.5 percent of GDP to critical infrastructure, civil preparedness, and the defence industrial base marked a qualitative and quantitative shift in how NATO Allies approach today’s security challenges. Despite the lack of a strong statement on Ukraine or a strategy for dealing with Russia, the 2025 meeting of NATO leaders was hailed for its historic commitment to raise Allies’ defence spending to a total 5 percent of GDP – with 3.5 percent going to more traditional “core defence requirements” like equipment, personnel, and operations.  

No one underestimates the challenge of delivering on these promises in the face of trade wars, economic challenges, and in some cases, sceptical parliaments and publics. But the fact and scope of the commitment underscore the way Ukraine and Washington’s new approach to European security has upended assumptions in Brussels and European capitals. 

Specifically, the 1.5 percent will go to “inter alia protect our critical infrastructure, defend our networks, ensure our civil preparedness and resilience, unleash innovation, and strengthen our defence industrial base.” And while the details are not spelled out, addressing supply chain security, and particularly reliance on China for critical minerals and rare earths, is one obvious path for investment.    

Rare earths and supply chains have been top of in-box for governments and tech, automotive, and defence industries, spurred by semiconductor and medical supply crises during COVID, demand for vehicle electrification, and on the defence side, the war in Ukraine.   

In some categories, such as rare earths and battery-grade graphite, Beijing controls over 90% of global processing capacity in critical materials.  And China has recently exercised its leverage, banning the exports of technologies vital to processing rare earths outside of China, and restricting exports of 16 critical minerals, including antimony, gallium, germanium, graphite, and seven rare earth elements.   

Automakers and defence companies were among the first sectors affected and while the U.S. and China have reportedly reached a deal to unblock exports, the fact that a deal was necessary underscores the risk to the U.S. and Allied economies and military capabilities. So does China’s unapologetic status as President Putin’s “no limits” partner and de facto industrial base for the brutal and illegal war against Ukraine.    

How Allies allocate those 1.5 percent investments will be a critical part of the broader post-Summit challenge of “making it so,” and a vital element of bolstering NATO’s long-term capacity and defence and deterrence posture. While the “how” is not currently spelled out in a public document, NATO seems to have thought this through, including the critical question of avoiding or at least minimising “cammo-washing” (a practice akin to environmental “green-washing” by using critical military requirements to fund “nice to have” projects that do not contribute to urgent security needs.) 

The Updated Defence Production Action Plan endorsed by Allied Defence Ministers earlier this year spells out some detailed and relevant parameters. “Allies agreed to take action to foster the responsiveness, strength, resilience and security of supply chains in order to protect industries and ensure that the Alliance develops military capabilities free from the hostile influence of potential adversaries.”  

In addition to developing recommendations “to address access to the individual critical raw materials identified on the NATO list of 12 defence-critical raw materials. . . including  national plans for onshoring/friend shoring,” Allies “will identify risks related to critical manufacturing capability, supply chain capacity and bottlenecks, and key materials and components, across the Alliance and among partners, as appropriate; explore the establishment of multinational stockpiling initiatives for specific critical raw materials; and leverage the NATO innovation ecosystem (including DIANA, the NIF and the Science & Technology Organization (STO)) to enhance resilience of the supply chain for critical materials and technologies by identifying mitigating solutions, and/or suitable substitute materials for further research.” 

As applied to rare earths, these are new tasks for NATO, but they fall in the Alliance’s traditional wheelhouse of baselining and prioritising challenges, coordinating action by national governments, and managing multinational procurement, logistics, and stockpiling. Coordination of stockpiling efforts with the EU Commission will be critical. Innovation – also a Summit priority – is another place where focused effort and NATO’s and Allies’ strong scientific base can make a difference in areas as diverse as alternative materials science, recycling materials in existing defence and other systems, and “full value mining” to recover minerals from mine waste heaps across the Alliance. Although not a NATO responsibility, revising permitting laws to facilitate “on-shored” and “friend-shored” production and processing in the U.S and Europe and other friends and allies, is another element in a solution.   

None of these is a magic rock, and China’s lead, bolstered by its lax environmental and labour laws and illegal and uncompetitive practices, will not be overcome in the short term. A race to the bottom is not an option for a modern democratic alliance and in any event cannot be won. But by stating and stepping up to the challenge, NATO and NATO capitals have made an important first step to strengthen their deterrence and strategic autonomy. 

The task now is to generate the promised investments and move out smartly on the detailed road map set out in the Summit and related documents.