NATO Secretary General Mark Rutte, right, meets with a Norwegian soldier during a visit to Setermoen, Norway, Mar. 8, 2026. A new economic assessment finds the United States would lose roughly $240 billion in annual exports if it withdrew from NATO, challenging the argument that the alliance is a financial drain on American taxpayers. (Alexis French/U.S. Marine Corps)
The U.S. stands to lose $240 billion annually in exports if it quits NATO, according to a new economic assessment that challenges the notion that the alliance is a drain on American taxpayers.
Among President Donald Trump’s criticisms of NATO is that American involvement comes at great financial cost in the form of military investments aimed at defending Europe.
However, a collection of recent studies examining economic data going back to NATO’s founding nearly 80 years ago concludes that alliance membership is a wealth generator.
Being in NATO brings “statistically robust increases in bilateral trade among member states,” economists Oleksandr Shepotylo and Karen Jackson wrote in a study published this month titled “Beyond Security: The Trade Implications of Joining NATO.”
“These effects are not short-lived,” the authors said. “They emerge gradually, strengthen over time, and remain positive even during periods of heightened geopolitical tension, including the Russian invasion of Ukraine in 2022-2025.”
It’s unclear what Trump’s plans are regarding the U.S. and NATO. While he has said he is reconsidering membership, the U.S. has not taken any formal steps to begin the withdrawal process, which requires a one-year notification period.
There also is U.S. legislation that requires presidents to gain Senate approval before pulling out, although that could be subject to legal challenge if Trump so desires.
That law was passed during Trump’s first term, when he frequently railed against what he considered European allies’ freeloading at American expense for their collective defense.
“The burden-sharing critique runs as follows: The United States contributes a disproportionate share of NATO’s defense costs, therefore it is subsidizing European security,” the researchers said. “The economics run the other way.”
The full-scale Russian invasion of Ukraine in 2022 has set off a binge in many NATO members’ defense spending, particularly on U.S. weaponry.
Researchers found that a chief beneficiary of the NATO relationship is U.S. industry. The gains from allied purchases of American-made weapons systems in turn produce American jobs and funds innovation more broadly, according to the study.
The new research results, which were based on advanced “gravity model” analytics to examine trade flows, were also spelled out in a joint analysis by the Center for Strategic and International Studies.
Among the key findings: NATO member states see a 12-27% long-run increase in bilateral trade directly connected to NATO membership.
Meanwhile, U.S. exports were estimated to fall 16.1% if the country exits NATO, or roughly $240 billion annually, according to a companion study by the researchers.
American gross domestic product would also drop by an estimated 0.4% from a NATO exit, approximately $100 billion per year at current output, they found.
While NATO has historically been viewed primarily as a collective defense pact, its status as a vehicle for economic growth has been overlooked, the researchers said.
“As the alliance’s hub, the United States has benefited disproportionately from this economic integration and would see some of the steepest losses should the alliance dissolve,” the researchers said.
If building into the alliance’s institutional “trust architecture” takes between five and 20 years to generate full trade benefits, “then disrupting that architecture means losing those benefits, and rebuilding them would likely take a generation,” they said.
The White House could be looking at other ways to retaliate against the bloc, such as punishing allies it has deemed unhelpful during the ongoing Iran conflict.
Such aggressive tactics could come at a cost to U.S. industry, even if Trump stops short of completely cutting off ties, the researchers said.
“The trust necessary to support the alliance is already fraying and partners are responding in real time,” they said.
