Japan has canceled an annual high-level meeting with key ally the United States after the Trump administration demanded it spend more on defense, the Financial Times reported on Friday.

Secretary of State Marco Rubio and Secretary of Defense Pete Hegseth had been expected to meet Foreign Minister Takeshi Iwaya and Defense Minister Gen Nakatani in Washington on July 1 for the yearly 2+2 security talks.

But Tokyo scrapped the meeting after the U.S. asked Japan to boost defense spending to 3.5% of gross domestic product, higher than an earlier request of 3%, the newspaper said, citing unnamed sources familiar with the matter.