The global arms race expands to include a trans-Atlantic fissure

(Originally published Jan. 26 in “What in the World“) As Trump leads the world into its might-makes-right, every-strongman-for-himself future, the U.S. and Europe are scrambling simultaneously to build the armaments needed to take on the rest of the world single-handedly.

Trump, as regular readers will recall, has called for a 50% increase in the record, $901 billion annual U.S. military budget. He has also threatened to block big defense contractors from paying dividends or buying back shares instead of meeting his demands for expanded weapons production. Years of industry consolidation have left America’s defense contractors unable to innovate or expand fast enough to respond to the rapidly changing face of modern warfare and keep up with sudden needs for an expanded arsenal to fight wars like those in Ukraine and the Middle East. Military strategy under Trump is shifting away from Europe and the Middle East to concentrate on defending the Western hemisphere and U.S. access to Asian markets from China. But the steady supply of weapons to Ukraine and Israel have worsened a shortage of weapons the Pentagon worries leave the U.S. vulnerable if war breaks out.

As Trump turns from NATO-skeptic to NATO adversary, meanwhile, Europe is being forced to confront the fact that, as Trump has alleged, it has been getting a free ride from the U.S. on defense for decades. NATO’s European members have, with the exception of Spain, already agreed to boost spending on their militaries to 5% of GDP, from just 2%.

Now Europe is looking not just to pull its weight, but to replace what it buys from the U.S. Europe accounts for 10% of total U.S. defense industry revenue, and relies on U.S. contractors for its stealth fighters, long-range drones, long-range missiles, long-range air defense, rocket artillery, and its satellite and aircraft gathering intelligence.

But a shift is afoot. Denmark, which Trump has been pressuring to sell him Greenland, now spends more than half its defense budget inside Europe, whereas between 2020 and 2024, nearly 80% of its defense imports were from the U.S. And the U.K. recently replaced its dependence on U.S. military satellites with its own constellation.

Last year, European defense spending jumped to $560 billion, double what it was 10 years ago. That has already unleashed a stampede of arms production: Germany’s Rheinmetall has opened or is building 16 new factories, and is on track to churning out 1.5 million 155mm artillery shells a year, more than what the entire U.S. defense industry produces. The European defense consortium MBDA has more than doubled monthly missile production capacity since Russia’s invasion of Ukraine in February 2022. Italy’s Leonardo has beefed up its staffing by 50% in just over two years. And both Leonardo and Britain’s BAE Systems are helping to upgrade the radar in Royal Air Force Typhoon fighters to bring them closer to par with the U.S.-made F-35.

But Europe can’t yet build arms fast enough to replace its reliance on the U.S. and other arms exporters, like South Korea. Despite efforts to improve the Typhoon’s capabilities and design with Japan an even more advanced fighter, Europe is at least a decade from being able to build a stealth fighter that can match the F-35. That has prompted criticism from pundits like historian Niall Ferguson, who recently lambasted Europe’s sluggish defense response.