Japan has canceled a crucial yearly security conference with the United States following the Trump administration’s pressure on Tokyo to sharply increase its defense expenditure, Financial Times reported.

The “2+2” negotiations between US Secretary of State Marco Rubio and Defence Secretary Pete Hegseth with their Japanese counterparts, Defence Minister Gen Nakatani and Foreign Minister Takeshi Iwaya, were to take place on July 1 in Washington. The talks were canceled after America insisted on Japan increasing its defence budget to 3.5% of GDP up from a previous request of 3% as reportedly communicated by Elbridge Colby, the Pentagon’s third-highest-ranking official.

A senior US official told Reuters that the session was “postponed” but would not give a reason. Japan’s foreign ministry also denied earlier talks on any particular spending target.

Pentagon spokesman Sean Parnell said on Saturday that US Asian allies should take a cue from Europe and target defence budgets of 5% of GDP, pointing to increasing risks posed by China and North Korea.

The action is part of a trend of pressure from President Donald Trump, who in March chastised Japan’s security pact with the US, contending that America is under an obligation to defend Japan while Japan has no reciprocal obligation. Japanese Prime Minister Shigeru Ishiba hit back by declaring Japan’s independence over its defence budget choice.

Trump’s remarks coincided with continued trade tensions, with Washington threatening sharp tariffs on Japanese cars, which are currently under suspension until July 9. Japan is scheduled to participate in the next NATO summit in The Hague, where Trump is expected to renew his demand for greater military contributions from allies.

Although Japan has already doubled its defence budget ceiling from 1% to 2% of GDP in the days of former Prime Minister Fumio Kishida, officials are adamant that any future boosts will be decided domestically, not as a result of external pressure.