Tokyo has decided to cancel a key security meeting with the United States after Washington demanded a significant increase in Japan's defense spending, straining one of the most important strategic alliances in the Asia-Pacific region. The decision comes just weeks ahead of Japan's Upper House elections, adding a domestic political dimension to the diplomatic rift.

The now-cancelled “2+2” meeting was scheduled for July 1, 2025, and would have brought together Japan’s Foreign Minister Takeshi Iwaya and Defense Minister Gen Nakatani with their American counterparts, Secretary of State Marco Rubio and Defense Secretary Pete Hegseth. According to sources familiar with the matter, the Japanese government withdrew after U.S. officials insisted that Japan raise its defense budget target beyond the 2 percent of GDP already planned by 2027.

The push reportedly came from Elbridge Colby, a top U.S. defense official, who advocated for Japan to increase its defense spending to 3.5 percent of GDP, with some American officials even suggesting a target of up to 5 percent. Japan’s leadership saw this as an overreach and an attempt to interfere with its sovereign budgetary decisions.

Prime Minister Shigeru Ishiba had earlier stated that Japan alone would decide the trajectory of its defense spending. Japan’s move to pull out of the talks appears aimed at protecting domestic political interests ahead of the July 20 elections, as appearing too compliant to U.S. demands could be unpopular among voters.

The cancellation is seen as symbolic of growing tensions in the U.S.–Japan alliance, traditionally one of the most stable in the region. Analysts view the move as a rare but pointed signal from Tokyo, suggesting a desire for more autonomy in its defense and foreign policy choices.

Simultaneously, Japan has been expanding its defense procurement relationships beyond the United States. The country is now opening up to European suppliers and has partnered with the United Kingdom and Italy on the Global Combat Air Programme. This diversification strategy indicates Tokyo's broader goal of reducing overreliance on any single partner for critical defense capabilities.

The defense budget issue is not isolated to Japan. The United States has also asked its NATO and European allies to raise their military spending significantly, part of a broader strategy to shift more security responsibilities onto allied nations amid growing geopolitical tensions with China and Russia.

Despite the cancellation, the U.S. has maintained that its commitment to allies like Japan remains firm. Defense Secretary Hegseth recently noted that “America First does not mean America alone,” signaling that Washington continues to value its alliances even as it demands more contributions from partners.

While the postponement of the talks marks a low point in recent bilateral interactions, officials on both sides are expected to revisit the dialogue later in the year once the political climate stabilizes and negotiations over defense contributions take a more measured course.