Anthony Albanese has rejected American demands to spend an extra $40 billion a year on the military, as the Coalition recommitted to boosting defence spending to the equivalent of 3 per cent of the economy, sharpening domestic political differences with Labor over national security.

Defence spending has joined US tariffs as friction points ahead of the prime minister’s first face-to-face meeting with President Donald Trump later this month, and new opposition defence spokesman Angus Taylor said Labor needs to heed Washington’s call for more military investment for the sake of the US alliance.