Europe’s Structural Dependence on U.S. Defense Industry

The footprint of U.S. defense companies in European procurement has traditionally been substantial. Although European defense manufacturers have significantly expanded production since 2022, they still do not produce several critical capabilities required for European deterrence and defense. As a result, EU member states will continue to procure a significant share of their military equipment from the United States, either through government-to-government agreements under the Foreign Military Sales (FMS) program or via Direct Commercial Sales (DCS).

Industrial Constraints and Shifting U.S. Arms Transfer Priorities

In the second Trump administration, this reliance on U.S. suppliers is increasingly seen as a strategic risk. European governments are primarily concerned that U.S. manufacturers may not be able to produce and deliver quickly enough to supply their armed forces with critical defense products. This concern has become more acute following the U.S.-Israeli military campaign against Iran, during which the U.S. and its Gulf partners used large numbers of interceptor missiles. Experts estimate that replenishing the inventories of Patriot interceptors and Tomahawk cruise missiles, for example, may take years, even with increased production in the U.S. Unsurprisingly, replenishing the stockpiles of the U.S. armed forces will have priority. At the same time, growing demand from Europe, the Middle East, and the Indo-Pacific is placing additional pressure on U.S. production capacity, increasing the likelihood of delivery delays for European allies.

European NATO allies may also not have priority in U.S. arms transfers. Under the “America First Arms Transfer Strategy” announced in 2026, arms transfers are intended to become a more explicit “tool of foreign policy.” It tasks the government with preparing a “sales catalog of prioritized platforms” that the U.S. will encourage allies and partners to buy from. According to the strategy document, the U.S. will prioritize arms sales to partners that have invested in their own defense and have a “critical role or geography in United States plans and operations.” Consequently, European allies cannot assume they will receive priority in future U.S. arms exports, despite the deteriorating security environment in Europe. For example, following the Iran intervention, U.S. officials informed several NATO allies that deliveries of previously ordered defense equipment could be delayed. At the same time, the U.S. government approved emergency arms sales to Gulf states without congressional review.

Finally, dependence on U.S. defense products creates opportunities for political leverage. The U.S. government already has broad legal authority to approve or deny arms exports and to restrict the transfer of products containing U.S. components. Although there is no “kill switch” for systems such as the F-35 fighter jet, which many European air forces use, many defense products depend on regular software updates and maintenance that could potentially be delayed.

European governments should systematically integrate these risks into defense planning and procurement decisions. Procurement strategies should assess whether delays in U.S. deliveries could undermine military readiness and whether reliable alternative suppliers are available.

Tensions over European preference rules in defense procurement

Most European governments agree that reducing dependence on non-European suppliers is necessary to strengthen Europe’s defense technological and industrial base. However, they disagree about how far this should go. Some fear that limiting U.S. participation could weaken transatlantic security cooperation, especially because Europe currently cannot produce certain advanced systems, such as fifth-generation fighter aircraft. The European Union has sought to promote European production through defense programs that support joint research, development, and procurement. For example, the Security Action for Europe (SAFE) program, agreed upon in 2025, allows the European Commission to borrow funds and provide loans for joint defense projects. Under its “European preference” rule, at least 65% of the value of procured defense equipment through SAFE must originate from the EU, Ukraine, or the European Economic Area.

While the U.S. government has encouraged European allies to strengthen their defense capabilities, it opposes “European preference” rules that disadvantage American defense companies and, in its view, undermine transatlantic interoperability. U.S. officials have therefore warned that such measures could prompt reciprocal restrictions on European firms seeking access to the U.S. defense market. As a result, tensions over European defense procurement rules may increase and could spill over into broader transatlantic economic relations.

Defense Technologies as a path to reduce reliance

With increasing defense investments, Europe should not miss the opportunity to reduce reliance on third countries and expand its own industrial capacity. Where European companies are unlikely to be able to produce an adequate alternative to U.S.-made systems, or where such capabilities cannot be developed quickly enough, European governments should promote co-production arrangements with U.S. defense companies. For example, some components of the F-35 are already manufactured in European countries, and missile interceptors for the Patriot air defense system are produced in Germany. While this approach does not eliminate dependence on U.S. systems, it reduces supply risks by creating greater industrial interdependencies. The upcoming NATO Defense Industry Forum could provide an important venue for advancing further cooperation.

At the same time, Europe has an opportunity to avoid creating a new dependency on non-European suppliers in emerging defense technologies. While reducing dependence in traditional defense systems will take many years, emerging technologies offer Europe a unique opportunity to avoid creating new strategic dependencies. These include unmanned and AI-supported systems, including drones operating in the air, at sea, and on land, that have become a key component of Ukraine’s defense.

Since European governments will likely increase acquisitions of these capabilities in the coming years, they should use this as an opportunity to foster an innovative and competitive European defense technology ecosystem. This should include Ukraine, which is a frontrunner in this domain. Although the sector is becoming increasingly competitive, there is not yet a dominant market leader in Europe. In the U.S., several startups have already received significant contracts from the Pentagon and aim to expand into Europe. The EU and its member states should support a strong European ecosystem by acting as anchor customers, providing predictable demand, and prioritizing European solutions where they are operationally competitive. At the same time, they should avoid creating monopolies that could reduce competition and innovation in Europe. Although a "European preference" in this domain may increase friction with Washington in the short term, it would strengthen Europe's long-term technological sovereignty, reduce supply risks, and contribute to a more balanced and resilient transatlantic defense relationship.

About the author:

Dr. Dominik Tolkdorf was a EURISGA Teaching Fellow, delivering in-depth sessions at the MA level on transatlantic relations in security and defence. Dominik is an independent researcher and consultant based in Berlin. He is also a Senior Fellow with the Global Governance Institute and an Associate Fellow with the German Council on Foreign Relations. His research focuses on transatlantic security, defense and trade relations, U.S. politics, and German foreign policy, Previously, he worked as Program Director for Foreign and Security Policy at the Heinrich-Böll-Stiftung in Washington, DC; as a Transatlantic Fellow for International Relations and Security for research institutions in Washington, DC, and Paris; and as a senior researcher and adjunct professor in Brussels. He holds a PhD in Political Science from Ludwig Maximilian University of Munich.

This blogpost is part of a series of contributions in the context of EURISGA – The European Union’s Role in Security and Global Affairs, which is a Jean Monnet Chair funded by the European Commission (Grant Agreement Number: 101085789). For further information please visit https://www.eurisga.eu.