Trump will result in increased defence expenditure in Europe

The NATO treaty requires that all members spend 2% of GDP on defence, and this has been the case since the original treaty was signed in 1948.

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As things stand, only seven countries comply with the terms of the treaty - the USA, the UK, France, Greece, Turkey, Poland and Estonia. All the others are seriously underfunded and are free-loading on the countries who are fully funded.

Here is a list of the countries with shortfalls:

Germany - spends 1.2% of GDP ($39.4 billion). Needs to spend another $26.27 billion to meet it's obligations.

Italy - spends 1.3% of GDP ($23.8 billion). Needs to spend another $12.82 billion to meet it's obligations.

Belgium - spends 1.0% of GDP ($3.9 billion). Needs to spend another $3.9 billion.

Denmark - spends 1.3% of GDP ($3.75 billion). Needs to spend another $2.02 billion.

Italy - spends 1.3% of GDP ($14.38 billion). Needs to spend another $7.74 billion.

Netherlands - spends 1.2% of GDP ($8.72 billion). Needs to spend another $5.81 billion.

Norway - spends 1.5% of GDP ($6 billion). Needs to spend another $2 billion.

Portugal - spends 1.1% of GDP ($2.33 billion). Needs to spend another $1.9 billion

Spain - spends 0.6% of GDP ($6.29 billion). Needs to spend another $14.67 billion).

Czech republic - 1.04% of GDP ($1.13 billion). Needs to spend another $1.04 billion.

Hungary - spends 1% of GDP ($1.03 billion). Needs to spend another $1.03 billion.

Bulgaria - spends 1.3% of GDP. ($0.78 billion). Needs to spend another $0.42 billion.

Latvia - spends 1.1% of GDP ($0.28 billion). Needs to spend another $0.23 billion.

Lithuania - spends 1.1% of GDP ($0.463 billion). Needs to spend another $0.378 billion.

Romania - spends 1.4% of GDP ($2.72 billion). Needs to spend another $1.16 billion.

Slovakia - spends 1.1% of GDP ( $0.96 billion). Needs to spend another $0.78 billion.

Slovenia - spends 1% of GDP ($0.4 billion). Needs to spend another $0.4 billion.

Albania - spends 1.2% of GDP ($0.11 billion). Needs to spend another $0.07 billion.

Croatia - spends 1.5% of GDP ($0.835 billion). Needs to spend another $0.278 billion.

Who benefits from the increased spending?

Because all these countries are European, they will try to confine expenditure to European defence companies. BAE Systems, Airbus Group, Finmecanica, Thales, Rolls-Royce, Safran, DCNS, Babcock International, Rheinmetall and others should all see increased orders and thus increased profits.

It might be worth buying stocks in these companies to profit from this.