Bank of Fuying: Trump's 5% military spending demand is unrealistic and will make the Western Hemisphere less secure

January 10th, Jinshi data: Derek Holt, an economist at the Bank of Canada, believes that U.S. President-elect Trump’s request for allied countries to allocate 5% of GDP to defense this month will make the Western Hemisphere more insecure, unreliable, and fragile. Canada’s current expenditure is about 1.25%, or 40 billion Canadian dollars per year. Holt calculates that if this proportion is increased to the 2% promised by NATO, it would amount to 60 billion Canadian dollars per year if immediately implemented, although Canada has committed to reaching this goal by 2032. Holt estimates that reaching 5% of GDP, if immediately implemented, would mean up to 150 billion Canadian dollars per year, and if implemented by 2032, it would reach 210 billion Canadian dollars per year. For an economy of about 3 trillion Canadian dollars, the total scale over 10 years would reach 1.5 trillion to 2 trillion Canadian dollars. Holt said that this is impossible, and it will definitely not happen if Canada faces destructive tariffs and a fiscal deficit outbreak, making the defense space even smaller.