But nothing lasts forever, and so it is, after 80 years, for the post-World War Two era.
For proof how much is changing, this week Finance Minister Nicola Willis announced plans to amend New Zealand’s procurement rules to favour local businesses, something Jacinda Ardern would have rejected as too left-wing had the Greens proposed it.
In fact, the rules-based era has been fraying since the US’ unilateral invasion of Iraq in 2003, both Hillary Clinton and Trump rejecting further rules-based economic liberalisation in 2016, and Joe Biden continuing Trump’s sabotage of the World Trade Organisation after 2020.
Europe in particular should have better prepared for this inevitable moment. There’s something odd, as Polish Prime Minister Donald Tusk puts it, that 80 years after the Soviet Union conquered Berlin, “500 million Europeans are begging 300 million Americans for protection from 140 million Russians who have been unable to overcome 50 million Ukrainians for three years”.
Just how long did Europe expect the US to guarantee security? If not the eight decades that have passed, did they expect a full century?
Inevitably American taxpayers would rebel and a Trump would emerge to say time was up. In retrospect, Europe – except for the UK and France with their independent nuclear deterrents – erred not making the first move towards true post-World War Two sovereignty by taking responsibility for its own security after the Cold War.
Now, Trump is forcing the timetable, just as he promised American voters.
Poland, with more reason than anyone to take defence seriously, is already Nato’s top spender, putting 4.1% of GDP into its military in 2024, rising to 4.7% this year.
The rest of Nato is following, as are three of its friends in the Indo-Pacific Four (IP4): Japan, South Korea and Australia. New Zealand is the fourth IP4 country.
The current Nato guideline is that those wanting its security guarantee should spend at least 2% of GDP on defence. After Trump’s comments during the campaign, nearly three-quarters of Nato members have met that target and all are on track to do so. South Korea is well over, Australia is right on the cusp and Japan will get there by 2027.
Yet, to continue the US security guarantee, Trump is demanding 3% or even 5%, the latter more than the 3.4% the US spent in 2024.
That might be dismissed as Trumpian bluster, but Nato will unveil a higher new target around the time of our Budget on May 22. Nato secretary-general Mark Rutte of the Netherlands – another country with good historic reasons to take defence seriously – indicates it should be at least 3%.
That’s not as unlikely as it sounds. If European Nato members continue their military build-ups at current rates, they’ll reach an average of 3% of GDP by 2030 and Trump’s 5% by 2035.
The Ardern, Hipkins and Luxon Governments all committed to New Zealand being part of the IP4. All New Zealand Governments emphasise the importance of the military alliance with Australia.
There’s no doubt that remaining in the IP4 demands we quickly meet at least the current 2% target, up from around 1.2%. As the new world order quickly unfolds, that will be true even to maintain the alliance with Australia.
The stakes are high. That alliance ending would soon raise questions about the extent of our economic relationship, including the survival of 1973’s Trans-Tasman Travel Arrangement that allows us to live in Australia and the Closer Economic Relations treaty a decade later.
We could abandon pretensions of keeping up economically or militarily with Australia, but that’s not the policy of the current, any previous or any future New Zealand Government.
Peters’ whole life and career can now be seen as but a preparation for this time of such radical yet otherwise uncertain change.
When it comes to country-first ideology, Peters was the OG when Trump was still making use of the infrastructure of globalisation to build casinos, golf courses and resorts around the world.
As Foreign Minister, Peters is always charming, uses words carefully, and is shrewd in dealing with people with whom he or New Zealand policy disagrees.
In Beijing earlier this month, he successfully took the sharpest edges off our deteriorating relationship.
If anyone can negotiate the twists and turns of our relationship with the Trump Administration, it is Peters. Like Trump – born and bred in Queens not Manhattan – the man from Whananaki has spent his whole life closely adjacent to the establishment, but never quite part of it, with little love lost on either side. More than 20 years before Trump’s “America First” inauguration speech in 2016, he named his party “New Zealand First”.
Now, in 2025, Peters even has a National Party Finance Minister basing policy on that idea.
With our farmers and manufacturers at risk of US tariffs, everyone ought to wish Peters the best as he arrives in Washington to meet with Secretary of State Marco Rubio and other US political contacts sympathetic to New Zealand. As Peters himself says, his meetings are seriously important.
When he returns, his diplomatic skills will need to turn to secure a commitment from Willis to increase defence spending to at least the current Nato guideline of 2% of GDP, which would require her to find around $5.7b more a year by 2027/28, on top of the $4.3 billion of defence spending Treasury currently projects. That’s massively more than the allowances set aside to cover every dollar of new spending across every area of Government.
Willis and Treasury will rightly point out that the Nato target is stupid, being based on mere spending rather than efficacy – the way the Labour Party thinks spending more on health, education or welfare necessarily improves services, when the opposite is often true.
But Willis being technically right doesn’t make Peters wrong. It may be an arbitrary target, but it is Nato and Australia’s target, and one we’ll have to meet to remain in military and economic alignment with our closest neighbour. Whatever he says now, that reality also wouldn’t change if Chris Hipkins returns as Prime Minister next year.
