The just-concluded NATO summit in the Hague may have made U.S. President Donald Trump very happy, as the allies reached a decision to invest 5% of their GDP in defense. However, will that help the American defense companies that the President wants to expand and prosper, and provide Americans with the much-needed jobs?
“Doubtful in the long run” may be the answer. If the allies spend more and their respective arms industries grow as a result, they could very well reduce their imports from the U.S.
It is worth noting that on June 25, NATO leaders adopted a summit declaration that set a new benchmark for defense investment and emphasized the importance of increasing defense industrial production.
With the “The Hague Defence Investment Plan” outlined in the declaration statement, Allies committed to investing 5% of their GDP in defense by 2035 – including 3.5% of GDP on core defense requirements and 1.5% on defense and security-related investments, such as infrastructure and industry. This marked a significant improvement from the previous benchmark of 2% of GDP.
As it stands, twenty-three NATO members now allocate 2 percent of their GDP to defense, and the European Commission has introduced a “ReArm Europe” initiative to coordinate and support members in defense procurement.
However, if the data available from the Stockholm International Peace Research Institute (SIPRI) is any indication, almost two-thirds of arms imported by European members of NATO from 2020 to 2024 came from the U.S., a significant increase from the 52% the U.S. accounted for from 2015 to 2019.
Over 90% of the arms imports in Norway, Sweden, Italy, and the Netherlands came from the U.S, while in the case of the U.K., the figure was over 80%. Between 2015 and 2019, less than 10% of Germany’s arms imports came from the U.S., whereas the figure increased to 70% for the period from 2020 to 2024.
Against this background, if European nations increase their own defense production and capabilities, they are likely to become less reliant on importing arms from the United States.
This shift is driven by a desire for greater self-sufficiency in defense and a recognition of potential vulnerabilities associated with relying on a single supplier, especially if that supplier is a third-party entity, such as the U.S.
Some European nations are now wary of potential political issues that could arise from relying heavily on U.S. arms, particularly in the event of disagreements or conflicts with the U.S. government. This has led to discussions about the need for more self-reliance in defense.
Many NATO allies fear that although buying more U.S. equipment and munitions may please President Trump, it will not deliver greater independence. In fact, one now hears arguments among the allies that a buying spree of U.S. weapons systems may result in the purchaser becoming even more reliant on the United States.
As former Australian Prime Minister Malcom Turnbull has written recently in the “Foreign Affairs” magazine, “the long-term solution for U.S. allies is to be able to deter aggressors with capabilities that are sovereign, ideally in the sense that they have been produced domestically but certainly in the sense that they can be deployed and operated without the concurrence of the United States. At the moment, that is not possible. U.S.-supplied F-35s, for instance, are so functionally dependent on American software and spare parts that it is difficult to see how they could be used, or used for long, without Washington’s consent.
“This kind of dependence, common in most modern weapons systems, was often irksome for U.S. allies but not regarded as a big problem. NATO allies could trust that they would never fight alone, so dependence on an indifferent United States was merely a theoretical concern. But today, with the White House demanding that the United States’ allies be able to fend for themselves, the circumstances are very different”.
Naturally, this has led many European countries to debate whether they should purchase American products or invest in their internal markets.
For instance, France would like Germany to reconsider purchasing F-35s and instead concentrate on further developing the Future Combat Air System, a joint European fighter jet project.
Paris believes that the example of France and Germany collaborating to form Airbus in 1970, which challenged Boeing’s monopoly, is a good example in this regard.
Reportedly, Portugal is no longer planning to acquire F-35s, and Canada is reassessing its plans to purchase 88 F-35s.
Incidentally, at the Paris Air Show last fortnight, France and Italy did their best in wooing potential buyers of their new joint air defense system in an effort to convince European armies to reduce their reliance on US weaponry.
It may be noted that European missile champion MBDA, French defense group Thales, and Italy’s Leonardo are casting their new generation SAMP-T surface-to-air weapon system as a viable alternative to the best-selling US Patriot. The first deliveries of the system are expected next year, with the French and Italian armies set to be the initial customers.
However, this approach may not align with the Trump Administration, which advocates for pushing allies to purchase U.S.-made weapons.
Secretary of State Marco Rubio has been on record as suggesting that attempts to exclude American defense companies from major European arms investments would be “seen negatively by Washington”.
In any case, it is also a fact that there are obvious limits to the concept of European independence from the U.S. in the field of arms manufacturing. There are still systems that the Europeans do not produce or cannot yet produce at scale.
According to Thomas Laliberty, President of Land & Air Defense Systems at Raytheon, there are no easy replacements for its weapons in Europe, and the U.S. will maintain a long-term footprint on the continent, including through new partnerships.
The “Trans-Atlantic Partnership” is expected to remain a key feature in arms production. Reportedly, Raytheon is close to announcing a plan to manufacture Stingers—a lightweight air defense missile used by Ukrainian forces against Russia—in Europe.
Boeing, which won a contract from Trump’s administration to develop the next-generation F-47 fighter jet this year, wants to work together with Europe, as “to do otherwise takes too long and will be unaffordable.”
In this context, it is worth noting that many Western military systems are indeed NATO products, built with components from numerous allies. Lockheed Martin’s F-35 fighter jet, for example, is a U.S. product built with components and assistance from several European NATO countries.
And this is something, the European manufacturers agree, cannot be wished away in the near future.
For instance, Stefano Pontecorvo, the chairman of Italian aerospace and defense group Leonardo, says that U.S. participation in some European programs would be “unavoidable” in the coming years due to the defense technologies available to them.
In other words, although national sovereignty is the mantra among leading European powers, their defense companies believe that fragmentation in arms manufacturing could prove detrimental, and therefore, there is a need to find a balance.
Italian Defence Minister Guido Crosetto was quoted as saying that, as Europe has “too much bureaucracy” compared to the U.S., it needs to adapt to a new military era of faster, cheaper, and more nimble technology. “Either Europe adapts its industry to these new parameters – different from those with which it has lived until four years ago – or it will have huge competitors, and not only the American ones”, he told the Reuters news agency.
Thus, a stronger European defense-industrial base will continue to need, at least in the near future, a more integrated transatlantic defense ecosystem. And that means that American weapons will continue to come to Europe.
According to Guntram Wolff, a defense specialist at the Brussels-based think tank Bruegel, there is a degree of interdependence between U.S. and European defense companies that is often overlooked. There is a considerable gap in the capabilities between the American companies and their European counterparts. Of course, Europeans have been trying to close this gap lately. But it is still there, in terms of cost, capability, and time.
For Wolff, it is more of time than capability. “In three years, it’s going to be very difficult for Europe to be ready on its own. In five years, it’s a different ball game”.
Viewed thus, it would be safe to say that while the US defense industry may initially benefit from increased NATO defense spending, the long-term trend is likely to be a decrease in US arms sales to Europe as European nations prioritize domestic production and self-reliance.
- Author and veteran journalist Prakash Nanda is Chairman of the Editorial Board of the EurAsian Times and has been commenting on politics, foreign policy, and strategic affairs for nearly three decades. He is a former National Fellow of the Indian Council for Historical Research and a recipient of the Seoul Peace Prize Scholarship.
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