By Clement Tan | June 2, 2025 | The Straits Times
SINGAPORE – It may have been the namesake of the fictional paradise in British author James Hilton’s Lost Horizon, but the Shangri-La Dialogue was anything but.
New Pentagon chief Pete Hegseth’s debut address at the key annual security forum might have assured allies the Indo-Pacific remains its “priority theatre”, pledging to prevent war and deter aggression so that “shared interests align for peace and prosperity”.
But it also raised more than a few eyebrows among those gathered in Singapore this weekend.
For one thing, his address included more than 20 overt China references – warning that the China “threat” is now “real” and “could be imminent”.
To this region, China’s increasing assertiveness, particularly in the South China Sea, may have created concern, but Mr Hegseth’s sharp rhetoric is a sharp departure from his predecessor’s.
Yet Mr Hegseth suggested a quid pro quo for US military presence here, in pushing Asian countries to emulate Europe by dramatically upping defence spending to 5 per cent of their respective gross domestic product.
“How can it make sense for countries in Europe to do that while key allies and partners in Asia spend far less in the face of a far more formidable threat from communist China, not to mention North Korea,” said the former Fox News presenter, as he unpacked his “common sense” US position on the Indo-Pacific in Singapore on May 31.
Reminiscent of a similar call by the US defence chief for European allies in February at the Munich Security Conference – accompanied by a ferocious lecture by Vice-President J.D. Vance – the comparison with Europe raised concerns. Was this call in Singapore one to really share the burden with Indo-Pacific allies, or is it more of a shift of burden as in Europe?
Initial fears of US abandonment after Mr Vance’s remarks may have receded, but there is an unmistakable transactionalism that undergirds much of the Trump administration’s quest to pursue its America First policy in its capricious on-again, off-again measures that subsequently followed in areas relating to security and trade with the rest of the world.
In Singapore over the weekend, Mr Hegseth could not escape questions over trade and tariffs, given that South-east Asian countries have been targeted with some of the highest initial tariff rates by US President Donald Trump, sapping plenty of goodwill.
Yet the US defence chief sidestepped this central issue.
When a Malaysian delegate questioned Mr Hegseth on how he plans to offset related tariff anxieties in achieving buy-in from Asia-Pacific allies on his defence plan, given the deep interconnections between trade and security in the region, the Pentagon chief demurred.
“I am happily in the business of tanks, not trade,” said Mr Hegseth. “I will leave that discussion to the man who knows how to do it best, which is President Trump.”
Yet this came just minutes after he warned against the temptation of “seeking both economic cooperation with China and defence cooperation with the United States”.
“Beware the leverage that the CCP (Chinese Communist Party) seeks with that entanglement. Economic dependence on China only deepens their malign influence and complicates our defence decision space during times of tension,” he said.
Sidestepping that delegate’s question could stoke doubts: While superpowers have every right to deploy any form of leverage they have, is there a subtext to Mr Hegseth’s stated plan to “re-establish deterrence” in the Indo-Pacific?
Are the ostensible aims to “help allies and partners strengthen their defence capabilities” and “rebuild defence industrial bases” a veiled sales pitch for “the best military equipment in the world” from the US in the various, broader bilateral tariff negotiations?
The expectation of a defence outlay of 5 per cent of GDP has already been rejected by the leader of one of the US’ staunchest allies in the Indo-Pacific.
“We’ll determine our defence policy,” Australian Prime Minister Anthony Albanese told reporters in Hobart on June 1. “What we’ll do is continue to invest in our capability but also our relationships in the region.”
Mr Albanese’s response suggests that countries in the Indo-Pacific presumably understand the need to strengthen defences without the need for reminders.
Through the Aukus security pact with London and Washington announced in 2021, Canberra is already investing an estimated A$368 billion (S$305.6 billion) over the next three decades through 2055 to procure nuclear-powered submarines – some from American shipyards.
Australia has upped defence spending, with Canberra projecting a rise in its defence expenditure from about 2 per cent of GDP currently to 2.4 per cent by 2033-34 – still a far cry from the 5 per cent floated by Mr Hegseth in Singapore.
Yet, it’s not as if other nations in the Asia-Pacific are resting on their laurels.
Japan approved a 13th consecutive record defence budget in 2025, yet estimates that its own outlay would hit only 2 per cent of its GDP in 2027.
South Korea spent about 2.8 per cent of its GDP in 2024 and is ranked just outside of the world’s top 10 in defence expenditure, given the existential threat that North Korea poses.
The Philippines, a developing country with GDP per capita of US$3,805 (S$4,910), spent just over 1 per cent.
For some allies at least, there is an acknowledgement of defence underinvestment.
“Defence spending should be commensurate with threats,” the Philippines’ Secretary for National Defence Gilberto Teodoro Jr told The Straits Times on June 1.
China has been engaged in dangerous skirmishes with the Philippines in the South China Sea, where Beijing has overlapping claims with some South-east Asian neighbours, including Malaysia and Vietnam.
The challenge is where the money will come from. “In the Philippines, we are trying to advocate with our colleagues on where to get sustainable funding. It’s not the initial outlays that we are working on, but the sustained financing and the funding sources,” he added.
Mr Teodoro said the 5 per cent GDP figure could just be an aspirational figure fixed by the Trump administration and not cast in stone.
“We work very closely with the United States and there has been no fixed percentage or targets,” he added.
Still, there are several contingent issues specific to particular contexts that would render Mr Hegseth’s push for greater defence spending not as easily tenable.
In Thailand, which has only recently exited an extended period of military rule, Mr Hegseth’s call for increased defence spending may well re-energise the military, while weakening the civilian government. And then there are many, such as Indonesia and Pakistan, who traditionally purchase cheaper arms and fighter jets, first-hand or otherwise, from China and Russia.
To be sure, it was encouraging to see Mr Hegseth meet his Asean counterparts collectively – despite Mr Trump’s tendency to eschew multilateralism – on the sidelines of the annual security forum in Singapore organised by the International Institute of Strategic Studies.
But Mr Hegseth’s sharp rhetoric on China in Singapore also compels Asian allies to take sides – something many in Asia and Europe, including Singapore, are loathe to do.
Mr Hegseth’s address sits in direct contrast to the option presented by French President Emmanuel Macron in his keynote address on May 30, where he
advocated a “positive new” Asia-Europe coalition to “ensure with others that our countries are not collateral victims of the imbalances linked to the choices made by the superpowers”.
“We have a challenge of revisionist countries that want to impose under the name of spheres of influence – in reality, spheres of coercion; countries that want to control areas from the fringe of Europe to the archipelagos in the South China Sea, at the exclusion of regional partners, oblivious to international law,” Mr Macron said, without making overt references to China or Russia.
Mr Hegseth would do well to appeal more authentically to the self interests of America’s Indo-Pacific allies if the US were not to end up part of this challenge.
This story was first published at The Straits Times.