<h1>NATO Leaders Set Historic 5% GDP Defense Spending Target Despite Key Exemptions</h1> NATO leaders are expected to agree on a historic 5% GDP defense spending target at a summit, comprising 3.5% for core defense and 1.5% for infrastructure and cyber defense. However, the alliance faces immediate challenges as a European nation has secured an exemption from the target, citing economic constraints and claiming it can meet capability requirements with only 2.1% GDP spending. The US administration has also indicated the target should not apply to America, only its allies. The spending increase aims to address threats from ongoing conflicts and hybrid warfare, with implementation deadline likely set for 2035 and progress reviews scheduled for 2029.