Summary
The European Union Council has forecasted a significant increase in American arms purchases, reflecting ongoing dynamics in transatlantic defense trade amid the EU’s ambitious efforts to strengthen its own defense industrial base. While the EU seeks to reduce reliance on external suppliers by promoting intra-European arms production and procurement through initiatives such as the €150 billion Security Action for Europe (SAFE) loan scheme and the broader €800 billion ReArm Europe program, American military hardware remains dominant in European inventories, with the United States accounting for approximately 63 percent of defense acquisitions by EU member states between early 2022 and mid-2023.
This forecasted rise in U.S. arms sales occurs alongside a complex strategic context in which the EU balances its push for greater strategic autonomy with the realities of longstanding defense cooperation with the United States. The EU’s efforts to prioritize “buy European” policies have sparked concerns in Washington, where officials warn that exclusionary measures against American—and potentially UK and Turkish—arms companies could undermine transatlantic security ties and complicate defense industrial collaboration. These tensions highlight a broader geopolitical contest over the future of European defense procurement and the sustainability of global arms trade relations.
Notable controversies surround the EU’s exclusionary defense procurement policies, which critics argue could damage longstanding alliances and disrupt established supply chains crucial for NATO interoperability. Meanwhile, divergent arms export controls among EU member states and the preference of many European governments for independent procurement rather than joint projects complicate the EU’s ambitions for a consolidated and self-reliant defense industry. The United States continues to advocate for strong transatlantic cooperation, emphasizing shared security interests despite competing industrial and political priorities.
Looking ahead, the interplay between increased American arms exports and the EU’s strategic autonomy initiatives will shape the future of defense trade between the two partners. Success in joint European defense procurement and industrial development will depend on political consensus, financial commitments, and managing the delicate balance between autonomy and alliance, all amid shifting global security challenges and evolving transatlantic relations.
Background
The European Union has been increasingly focused on strengthening its defense capabilities and reducing reliance on non-European suppliers, particularly in the context of growing geopolitical tensions and Russian aggression. Traditionally, Western European countries have maintained consistent arms trade relations with the United States since the 1950s, while Eastern European countries only began significant arms deals with the US following the end of the Cold War and the collapse of the Soviet Union. Recent efforts by the European Commission aim to deepen defense ties among EU member states and to promote greater self-sufficiency in defense procurement.
In March 2025, the European Commission announced a €150 billion loan scheme, known as Security Action for Europe (Safe), designed to prioritize weapons purchases within the EU and allied countries rather than from the US. This initiative is part of a broader strategy to increase European defense industrial readiness through collaborative investment, research, development, production, procurement, and ownership within the EU. Despite these efforts, over three-quarters of defense acquisitions by EU member states between the start of Russia’s invasion and June 2023 were made from outside the EU, with the United States accounting for 63 percent of these purchases.
The program also seeks to involve allied nations beyond Europe, such as South Korea and Japan, as well as the European Free Trade Association (EFTA), potentially expanding defense spending up to €800 billion. European Defense Commissioner Andrius Kubilius emphasized the need to consider global geopolitical developments and the strategic priorities of the United States in shaping EU defense policies. At the same time, some EU leaders advocate for excluding arms companies from the UK and Turkey if member states agree, signaling a push for greater independence in defense procurement and strategy.
Experts argue that the EU should regard the UK’s industrial base as part of its own defense industrial base, given the insufficiency of relying solely on the US defense industry. Strengthening the single market for defense and bolstering the European defense industrial base are seen as essential for ensuring the EU’s security and achieving better cost-effectiveness in defense spending. The presidency of the Council of the European Union plays a key role in representing the Council in relations with other EU institutions, facilitating such strategic defense initiatives.
Recent Developments
In 2023, the European Union witnessed a notable increase in arms export activities among its member states, with over 33,700 licenses issued for arms sales valued at more than €298 billion—marking a significant rise both in the number of licenses and the total value compared to 2022. This uptick reflects ongoing efforts at the EU level to strengthen and harmonize arms export policies, particularly through instruments such as the 1998 EU Code and its successor, the 2008 EU Common Position on arms exports. Member states were engaged in a comprehensive review of this Common Position during 2012, aiming to improve information sharing, enhance guidance on export licensing decisions, and increase the European Parliament’s role in the process.
To bolster the EU’s defense industrial base and reduce dependency on external suppliers, particularly from the United States, the EU has intensified initiatives to coordinate defense procurement across the European Economic Area (EEA). The 2023 European Defence Industry Reinforcement through Common Procurement Act (EDIRPA) allocated €300 million in subsidies for joint procurement projects involving at least three EEA member states, aiming to address critical capability gaps such as ammunition supplies and intelligence capabilities. Additionally, the EU launched the Security Action for Europe (SAFE) package, a €150 billion loan scheme designed to prioritize weapon purchases within the bloc and allied countries as part of its broader Readiness 2030 program. SAFE funding contributes to the wider €800 billion ReArm Europe initiative, which includes measures such as a national defense escape clause allowing member states to increase defense spending up to 1.5 percent of GDP without impacting deficit calculations.
Despite these efforts to enhance internal capabilities, the European defense market remains significantly reliant on American military hardware. Nearly half of the fighter jets in European air forces are U.S.-made, with the F-35 Lightning II standing out due to its advanced stealth and sensor fusion technology. Similarly, American missile defense systems, tanks, armored vehicles, and artillery continue to dominate European inventories, underscoring the ongoing reliance on U.S. suppliers. This dependence has generated tensions, especially under the Trump administration, which advocated for increased European defense spending and greater self-reliance, while simultaneously urging European allies to maintain purchases of American arms. The EU’s moves to promote local manufacturing and limit U.S. participation in defense procurement have been met with concern from U.S. officials.
Looking ahead, the EU faces challenges in securing long-term funding and political consensus to fully realize its strategic autonomy ambitions. The success of joint procurement and industrial cooperation initiatives such as EDIRPA depends heavily on sustained financial commitments and member states’ alignment on defense priorities. Meanwhile, U.S. policy towards arms sales emphasizes the importance of aligning major sales with broader peace and stability goals in key regions, suggesting that transatlantic defense trade relations will continue to be a complex but vital aspect of European security.
Impact on Trade Prospects
The anticipated increase in American arms purchases has significant implications for trade prospects between the United States and the European Union. While the United States remains the world’s largest arms producer and recorded a record $117 billion in defense deals in 2024—nearly doubling the previous year’s sales—this surge occurs amid the EU’s efforts to strengthen its own defense industrial base and reduce dependency on foreign suppliers, particularly from the U.S..
The European Commission’s Readiness 2030 program, backed by plans to spend up to €800 billion on defense, aims to bolster European defense industrial readiness through collaborative investment, research, development, and procurement among member states and allied partners. This strategy reflects a growing preference for intra-EU cooperation in arms production and procurement, with more than three-quarters of defense acquisitions by EU members from early 2022 to mid-2023 being sourced outside the EU, predominantly from the United States, which accounted for 63 percent. The push for “buying more European” is intended to strengthen the EU’s technological and industrial base, ensuring long-term sustainability and strategic autonomy in defense capabilities.
However, these developments have introduced new trade tensions and challenges. The EU is considering measures that would exclude arms companies from the U.S., the U.K., and Turkey from participating in EU defense contracts, driven partly by concerns over political unpredictability and the desire to assert greater independence in defense procurement and strategy. This exclusion risks limiting the role of major external weapons producers in the European market, potentially reshaping transatlantic defense trade relations.
Despite these moves, the United States continues to emphasize the importance of transatlantic defense industrial cooperation. U.S. officials caution against creating barriers that could undermine alliance strength and warn that collaboration remains key to mutual security interests. This tension underscores the complex interplay between expanding American arms sales globally and the EU’s drive for strategic autonomy.
Furthermore, varied trends within global arms trade reflect shifting regional dynamics. For example, in the Middle East, some countries such as Qatar and Kuwait experienced significant increases in arms imports, while others like Saudi Arabia and the United Arab Emirates saw declines. These shifts influence global arms trade patterns and affect the strategic calculations of both American and European defense industries.
In sum, the increase in U.S. arms sales, coupled with the EU’s push for greater defense industrial collaboration and autonomy, presents both opportunities and challenges for future trade prospects. While American firms stand to benefit from rising global demand, they face growing competition and regulatory hurdles within the European market as the bloc seeks to cultivate a more self-reliant defense ecosystem.
Political Reactions and Official Positions
The shifting dynamics in transatlantic arms trade and defense cooperation have elicited a range of political reactions and official positions from both the European Union and the United States. These responses reflect broader geopolitical tensions, institutional roles within the EU, and evolving defense strategies.
Within the EU, the presidency of the European Council plays a critical role in shaping political direction and managing consensus among member states. The president prepares and chairs the European Council’s meetings, represents the Council externally on foreign and security policy matters, and liaises with the European Parliament and Commission. This institutional framework influences how the EU negotiates its defense priorities and trade relations, particularly with the United States.
EU leaders have increasingly emphasized the need to strengthen internal defense capabilities and reduce dependency on external suppliers, including the U.S. The European Commission has launched significant initiatives such as the €150 billion Security Action for Europe (SAFE) loan scheme aimed at prioritizing weapon purchases within the bloc and allied countries, as a direct response to perceived Russian aggression. Furthermore, regulatory measures like the 2023 European Defence Industry Reinforcement through Common Procurement Act (EDIRPA) offer substantial subsidies to support joint procurement projects among European Economic Area members. These efforts illustrate a strategic push to foster a more autonomous European defense industrial base.
At the same time, European officials acknowledge the importance of maintaining strong transatlantic ties. For instance, cooperation with the United Kingdom remains a priority, with ongoing discussions to enhance security and defense partnerships. The EU’s broader strategy seeks to increase defense industrial readiness through coordinated investment, research, development, and procurement within Europe, aiming to encourage member states to buy European-made weapons collectively rather than relying heavily on external sources. Despite these initiatives, over three-quarters of EU defense acquisitions since Russia’s invasion have still originated outside the bloc, predominantly from the U.S..
On the American side, concerns about EU efforts to limit arms purchases from the U.S. reflect underlying tensions in Washington’s approach to Europe. The Trump administration notably contributed to trade disputes and uncertainty in transatlantic relations, which in turn influenced EU policy shifts. U.S. defense industry lobbying exerts considerable influence to expand arms exports globally, often by emphasizing security threats to justify sales. Meanwhile, the Biden administration has continued supporting NATO and Ukraine while generally opposing European moves toward reducing reliance on American arms.
Future Outlook
The future outlook for arms procurement and defense collaboration within the European Union indicates a complex interplay between ambitions for greater European self-sufficiency and ongoing reliance on American military technology. The European Commission has emphasized the goal of enhancing European defense industrial readiness through collaborative investment, research, development, production, and procurement within the EU. This includes initiatives such as the Defence Projects of Common European Interest, which member states will further define and implement, and the European Defence Industry Reinforcement through Common Procurement Act (EDIRPA), which provides substantial subsidies to joint procurement projects among European Economic Area members.
Despite these efforts to strengthen intra-European defense capabilities, current trends reveal that a significant majority of defense acquisitions by EU member states, especially since the onset of Russia’s invasion of Ukraine, continue to come from outside the EU. The United States remains the dominant supplier, accounting for approximately 63 percent of these acquisitions up to mid-2023. This sustained dependence reflects both strategic considerations and existing defense industry dynamics, as well as political factors such as using American arms purchases as a tool to mitigate potential trade disputes like tariffs.
Meanwhile, there is growing political momentum within parts of the EU advocating for increased autonomy in defense procurement. This includes proposals to exclude non-EU companies from certain procurement opportunities, potentially affecting arms suppliers from countries such as the United Kingdom and Turkey, alongside the United States. However, U.S. officials continue to encourage European allies to maintain strong defense trade ties with American manufacturers, underscoring the strategic and economic significance of transatlantic arms sales.
The European Union’s arms export activity also reflects a rising trend in licensing and trade value. Between 2022 and 2023, the number of arms export licenses issued by EU member states increased from over 31,000 to more than 33,700, while the total value of these exports surged from approximately €176 billion to over €298 billion. This expansion underscores the EU’s role as a major global arms exporter and highlights the continuing vitality of its defense industry amid shifting procurement policies.
Looking ahead, the balance between fostering European defense industrial independence and maintaining robust transatlantic arms trade relationships will likely shape the evolution of EU defense procurement policy. The extent to which the EU can successfully implement coordinated defense projects and increase its internal manufacturing capacity remains to be seen, especially in light of persistent U.S. interests in the European arms market and broader geopolitical considerations.
Criticism and Controversies
The European Union’s efforts to bolster its defense industry and reduce reliance on non-EU arms suppliers have sparked significant criticism and controversy, particularly regarding the exclusion of American arms manufacturers from key EU defense initiatives. Reports indicate that American companies are set to be excluded from a €150 billion defense spending plan, with the exclusion potentially extending to arms producers from the United Kingdom and Turkey as well. This move has raised concerns given the historical dominance of the U.S. as a supplier of military technology to Europe and the strategic implications for transatlantic relations.
The U.S. administration has expressed unease over these developments, viewing the exclusion as a challenge to American defense exports and a source of tension within its broader Europe policy. This friction is heightened by the Trump administration’s push for European allies to increase their defense spending and assume greater responsibility for their own security, juxtaposed with the EU’s parallel ambition to internalize arms manufacturing in response to perceived uncertainties about U.S. commitments to NATO. Such dynamics have led to practical and administrative hurdles for non-EU companies attempting to compete for EU defense funds, despite official assurances to the contrary.
Furthermore, the divergence among EU Member States in controlling arms exports has complicated the union’s stance on arms trade governance. While information exchange and consultations occur within the Council Working Party on Conventional Arms Exports (COARM), decisions on arms export licenses remain national prerogatives without an overarching EU sanction or enforcement mechanism. The European Parliament has advocated for more stringent arms control measures, yet these calls have largely gone unheeded, illustrating internal fragmentation on defense policy.
The broader challenge of cooperation in defense procurement is underscored by the difficulties European countries face in joint development and acquisition efforts. Analysts highlight that European nations often prefer to procure independently, finding the U.S. Foreign Military Sales system more
