At an informal meeting of European Union (EU) leaders to discuss defense in February, the French delegation found themselves isolated. At issue was EU financing of defense investment and procurement, and whether American firms should be barred from receiving those funds.
France has long believed EU and European money should stay in Europe. That feeling may grow in the wake of the February 14-16 Munich Security Conference where transatlantic amity was in short supply. But, while there is widespread agreement that Europe’s defense industrial base needs to be strengthened, Paris’s desire comes up against several challenging realities.
Most importantly, the EU still doesn’t have a permanent agreement on joint defense procurement, a damning indictment of the bloc nearly three years after Russia’s full-scale invasion of Ukraine. While there has been success in scaling up the production of artillery ammunition, the continent’s defense industry’s production of strike missiles remains extremely weak.
There are numerous other categories of military equipment that are simply not produced by European firms at all, forcing the continent’s governments to turn to the US. As a result, nearly two-thirds of EU defense orders went to the US between mid 2022 and mid 2023, according to the Draghi Report.
The return of President Trump has further fueled concerns over Europe’s dependence on American arms. The president has repeatedly expressed skepticism about America’s commitment to European security, and his second term has seen additional officials with this view taking senior positions.
But his transactional approach to relationships, particularly in the domain of trade, is being seen as an opportunity by some of Paris’s neighbors. They argue that Europe can credibly make the case to the new administration that they are some of the US defense industry’s best customers.
They should emphasize that Russia’s aggression against Ukraine has boosted US arms sales by $180.5bn, which is more than Congress has appropriated to respond to the invasion. While Joe Biden was susceptible to appeals citing international norms and solidarity, Trump is more likely to stay engaged in Europe when hearing arguments highlighting the benefits to American businesses.
Europe will need to continue to procure major amounts of arms from the US in any case, as it can’t realistically divest from 63% of its procurement portfolio, but that figure can be reduced through greater domestic investment. As defense budgets continue to rise, an even larger volume of American arms will probably still be bought in absolute terms.
Lithuania, for example, which currently spends around 3% on defense, is targeting 5.5% between 2026 and 2030 and knows it can’t all be spent in the EU. “We need to support our national and European defense industries, while also keeping and nourishing transatlantic bonds, which means buying American weapons,” Defense Minister Dovilė Šakalienė told Politico.
Poland and Italy share the view that Europe should continue to buy American, with Italian Foreign Minister Antonio Tajani also advocating increased business with the US outside the realm of defense. A high-ranking French officer conceded that “France is a bit isolated and doesn’t get much support; other countries are more realistic.”
Regardless of any EU agreement on these questions, each member state needs to maximize the value of its own defense budget, both in the tangible assets procured and the diplomatic goodwill built with Washington.
The bloc doesn’t have many friends in the Trump administration, so it might be best if meeting NATO spending targets is left to national capitals. Every country will have its own path to this goal, but there are some common approaches that they all would do well to pursue.
Firstly, leverage Washington’s Foreign Military Sales (FMS) program as much as possible. For smaller countries without well-established defense procurement bureaucracies, it is inherently advantageous and it makes it easier to advertise that they are buying American, helping build political capital in the US.
Secondly, negotiate offset agreements and seek other opportunities for defense industrial cooperation. Many “American-made” military systems already have global supply chains, with raw materials and even key components coming from abroad.
The F-35 combat aircraft, which is in widespread service with numerous European militaries, includes many European-made components, for example. Germany will soon host a second production line for the aircraft’s center fuselage and will also be home to the continent’s first production line for PAC-2 GEM-T missiles.
The Patriot air defense system’s supply chain also already stretches from the Mediterranean to the Baltic, with companies in Spain and Poland producing components for PAC-3 MSE. Signing more deals like this will give the benefit of sophisticated, combat-proven US systems while strengthening Europe’s own industrial base.
Thirdly, invest prudently in sovereign, domestic capabilities, and set achievable goals. With more than 60% of European defense dollars currently going to the US, reducing that to 50% is a reasonable first step.
Those dollars should not be wasted on vanity projects that will deliver worse capabilities at higher cost compared to American alternatives, such as France’s plan to replace their M270 MLRS. They need to be spent on delivering products that can compete in the global arms market.
Europe’s shipbuilding industry is a good example of a sector that is already commercially successful and could benefit from increased investment. The UK-French-Italian missile multinational MBDA is another firm with viable existing product lines but insufficient money to produce at scale.
The message from Washington, across successive administrations, has been that Europe needs to invest credibly in its own defense and not outsource security to the US. A combination of existing “Buy American” programs, alongside smart investments in domestic defense production, offers the best balance between demonstrating the commitment to collective defense and addressing the Trump Administration’s views on “fair trade” relationships.
Attempting to divest from American arms manufacturers would only encourage a full-blown trade war, in which there would only be losers. That’s one more reason why a major Europe-US political and trade bust-up is to be avoided at all costs.
Colby Badhwar is a security columnist for The Insider, a Russia-focused, independent media outlet. He writes on global security issues, with an emphasis on armaments and the arms trade. He is a founding member of Tochnyi, a collaborative project covering the War in Ukraine with a weekly podcast, where his research and analysis can be heard. He resides in Toronto, Canada.
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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