However he again refused to commit to meeting the Nato target when the Ministry of Defence's budget for the next five years is set out in the Autumn.
The prime minister held a meeting with the US president on the fringes of the G7 summit in Germany yesterday. Obama urged Cameron directly not to cut defence spending.
Speaking at a press conference today, Cameron noted the UK had spent 2% of GDP on defence every year that he had been in office.
"Britain is a serious global player in the world," Cameron said. Pointing to a £160bn equipment budget, including two new giant aircraft carriers, he added: "We are not shrinking."
Last week George Osborne announced defence spending would be cut by £500m. And the overall defence Budget for the next five years will be outlined by the chancellor in the Autumn spending review.
Earlier this month, US defence secretary Ashton Carter warned that Britain would lose its ability to "punch above its weight" if it cut defence spending. He warned the UK not to become "disengaged" from the world.
Yesterday, Cameron announced Britain would be sending 125 new military advisers to Iraq to help fight Isis. The overall number of British personnel deployed in the region tasked with various roles targeting Isis is now around 900.
During the election campaign, Cameron came under pressure from Conservative backbenchers to commit to spending at least 2% of GDP on defence.
Labour leadership candidate Liz Kendall has said she would commit the party to spending 2% on defence should she win the contest.