The Trump administration’s intention to reduce its military commitment to Europe has justifiably raised concerns about the reliability of future U.S. security commitments for its longtime allies, underscoring the need for greater European defense self-reliance. 

The EU and member states have begun the costly and politically fraught effort to better defend themselves. Brussels hopes to mobilize €800 billion for defense spending. Germany is freeing up billions more, as are other European nations.  

“These loans should finance purchases from European producers, to help boost our own defense industry,” European Commission President Ursula von der Leyen told the European Parliament this week.

But Europe is a long way from being able to supply its own military needs. Fully 78 percent of European military purchases currently come from production outside the EU, with 63 percent from the U.S. alone. 

The challenge facing both Washington and Brussels is how to manage Europe’s defense industrial market transition to maximize future European self-reliance while minimizing inevitable American resistance to the loss of its lucrative military sales. 

This will take time. In the short run, European rearmament can only be achieved through closer cooperation in jointly developing and producing scarce military assets through U.S. investment in Europe, cooperative military research and development and some creative financing. 

Of the top 10 Western defense contractors by market capitalization, six are American, two are French, one is German, and one is British. With their relative lack of capital, European arms suppliers cannot initially meet their rising defense production needs. But U.S. defense contractors have capital to invest. In 2023, Lockheed Martin, RTX and Northrop Grumman all spent more on stock buybacks than on capital investment. 

In the short run, Europe will need to convince more American defense companies to invest in Europe. This is already happening. Lockheed Martin collaborates with German defense company Rheinmetall to co-produce weapons systems. Boeing has investment partnerships in Poland. And the Polish defense manufacturer PGZ will co-produce Javelin anti-tank weapons with U.S. industry in Poland. 

Brussels could encourage more such investment by making assurances that there will be no discrimination against U.S. defense companies manufacturing in Europe as the continent develops an indigenous defense industrial base. Dutch defense minister Ruben Brekelmans, for one, backs allowing U.S. weapons made under license in Europe to be considered as European.

The Trump administration and some European companies may resist more such competitive American investment. But the alternative is a Europe that is less capable of defending itself in the short run and the eventual exclusion of U.S. companies from much of Europe’s lucrative defense market in the long run. 

One of the lessons of the Ukraine war has been the recognition of the growing importance of defense technological innovation. In the fast-evolving battle landscape, being at the forefront of defense technological progress is a necessity for national security. 

Neither Americans nor Europeans necessarily have all the know-how to drive military technological innovation on their own. But clearly the Europeans lag in such efforts. And NATO’s Defense Innovation Accelerator program for the North Atlantic is insufficient for the task. 

Washington should invite Brussels to deepen its commitment of resources and personnel to DARPA (the Defense Advanced Research Projects Agency), which, among other innovations, pioneered the development of drones and stealth technology. Currently European firms cannot participate in DARPA programs without a U.S. partner. That requirement should be relaxed. DARPA’s sense of mission, risk-taking and willingness to fail have produced a track record that Europe desperately needs. 

At the same time, Brussels should invite Washington to join in its plan to utilize lending by the European Investment Bank to mobilize private capital for the defense sector. There is a precedent.

In 1991, Washington contributed 10 percent of the capital needed to create the European Bank for Reconstruction and Development set up to rebuild the former Soviet bloc. A small amount of American capital invested in the EIB would leverage several multiples of European private sector defense investment, including that by U.S. firms, accelerating Europe’s defense equipment self-reliance. 

European military self-sufficiency is something both Washington and Brussels now want. But none of this will be easy.

Building out the European military industrial base will take years and be extremely costly. That goal cannot be achieved through American complaints about burden sharing or European retorts about autonomy. It will require cooperation. And while the Trump administration seems unwilling to work with Europe, its demand that Europe do more to defend itself will be impossible without first helping its longtime ally build a strong indigenous defense industrial base. 

Bruce Stokes is a visiting senior fellow at the German Marshall Fund.