US Allies Wary of Buying American as They Plan Defense Buildup

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German Chancellor Friedrich Merz, whose government is planning to nearly double spending on core defense items this year, said the European industry needs an overhaul to meet the demand. 

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“We have far too many systems in Europe, we have far too few units, and what we produce is often far too complicated, and therefore too expensive as a result,” he said this week.

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At the Paris Air Show last week, executives from Airbus SE and Dassault Aviation SA sparred openly over who should take charge of their next-generation fighter jet project. 

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European allies will have no alternative but to buy American weapons to meet alliance targets, especially with stocks depleted by supplies given to Ukraine, a senior NATO official said, asking not to be identified discussing a sensitive issue.

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Allies also lack key technologies. 

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“Who is the European Palantir? Who is the European Planet?” asked Pierre Vandier, a top NATO commander, referring to the US technology and satellite companies that the alliance recently signed contracts with. “It’s a huge stimulus for Europeans to do all they can. If they don’t get started now they can’t cry if there are violent power struggles later.”

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Europe Depends on US Weapons

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Europe has no rivals as advanced as Lockheed Martin Corp’s F-35 fighter or RTX Corp’s Patriot anti-missile, which has been critical to protecting Ukraine from Russian attacks. Allies have no competitors for key capabilities like ballistic-missile defense and air-to-air refueling.  While simpler weapons like howitzers are easier for allies to produce, they still require US satellite systems for precision targeting. 

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The UK said this week it would buy at least a dozen new F-35As, which Prime Minister Keir Starmer hopes will help curry favor with Trump.

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European defense companies are hopeful. They’ve seen share-price increases of 50% or more this year, ahead even of the big gains of their US competitors, as investors anticipate the huge boost in business.

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“More urgency is there now,” Micael Johansson, chief executive officer of Saab AB, which makes Gripen fighters, said in an interview. “I wouldn’t say we have seen a dramatic shift now to buy more European, but I think that’s the trend.” 

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US defense contractors are lining up cooperation deals with European counterparts to hedge against any shift away from American weapons. 

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“As these European defense budgets increase, that’s where we’re spending our time,” Stephen O’Bryan, president of Northrop Grumman Corp’s international business, said in an interview, referring to partnerships in Norway, Germany and Denmark.  

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Lehtoranta of Insta said his company already partners with big US manufacturers like Lockheed Martin, including by providing avionics maintenance and other support for F-35 jets. But they see American companies are even hungrier to join forces now.

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“I can see in the US that it might be a little bit of a fear in the air. US companies think that they might lose opportunities if they don’t find the right partners,” he said. “There will be change, there will be probably more European investments in European factories and European acquisitions, but still we cannot survive without the US industries.”

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—With assistance from Wojciech Moskwa, Thomas Seal, Matthew Boesler, Michael Nienaber, Sanne Wass and Alex Wickham.

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