National Interest

by Peter Rough and Tomas Pojar

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    To maintain their technological edge and production scale, the US and European defense sectors should pursue more joint ventures.

    Since arriving on the American political scene over a decade ago, President Donald Trump has consistently exhorted Europe’s leaders to spend more of their own money on defense. Russian President Vladimir Putin has given them a reason to do so. The one-two punch of American pressure and Russian aggression has finally wrought what the Trump administration has long sought: a Europe that is rearming at scale.

    Now, the debate in the halls of Europe’s capitals is no longer whether to spend more money, but how to spend it. Two main options confront the continent: use defense-spending allocations to construct an independent industrial ecosystem, or use them to build a larger, more resilient transatlantic defense base in which American and European companies can invest, innovate and produce together. How Europe resolves this debate will go a long way toward determining the future of the transatlantic alliance.

    The war in Ukraine has demonstrated that modern militaries need more than sophisticated capabilities, but large quantities of them: unmanned vehicles, air defenses, artillery shells and cruise and ballistic missiles, among others. The war in Ukraine has shown Europe’s leaders that they may have advanced militaries, but they do not have enough capacity to sustain a war.

    Europe is now reaching a scale where it can shift from capability to quantity. When Trump first took office in 2017, non-US members of the North Atlantic Treaty Organization (NATO) were spending about $275 billion on defense (in 2025 current prices and exchange rates). By last year, that total had risen to an estimated $654 billion.

    At this level of spending, Europe has the scale to transform its defense-industrial base, spur companies to build new factories, develop skilled workforces and accelerate research and development.

    Yet it is difficult to imagine most European leaders spending such large defense budgets abroad at a time of low growth at home. The future of transatlantic defense cooperation will therefore need to move beyond trade in finished weapons systems. Several major European defense companies have already shown how this could happen.

    Europe’s defense giants have already established substantial manufacturing and production capabilities in the United States. Saab, a Swedish firm, has built an assembly and systems-installation plant in West Lafayette, Indiana. Kongsberg, a Norwegian defense concern, is producing remote weapon stations and turrets in Johnstown, Pennsylvania. Airbus manufactures helicopters in Columbus, Mississippi, while Leonardo builds them in Philadelphia, Pennsylvania. Most recently, Germany’s sole prime contractor, Rheinmetall, established a growing US industrial footprint spanning multiple states, while the Czechoslovak Group and Colt CZ Group have expanded their presence stateside through major acquisitions.

    Traditionally, US defense companies have proven more hesitant to reciprocate these overtures. The next step is for US firms to tap Europe’s new defense market through joint ventures, production facilities and technological partnerships. Central Europe is a natural place to begin.

    Since the fall of communism, Central European countries—from Poland and Czechia to Romania—have been among Washington’s most reliable allies. Poland’s economic growth and defense spending make it the anchor of Eastern Europe; Czechia’s engineering and defense-industrial tradition is unique on the continent; and Romania’s Black Sea location puts it on NATO’s southeastern flank. Moreover, these countries boast strong engineering traditions, highly skilled workforces, competitive manufacturing sectors and growing economies, all underpinned by a firm commitment to the transatlantic alliance.

    US investment in Central Europe would not simply lower production costs. It would also add manufacturing capacity on NATO’s eastern flank and give US firms a foothold inside the European market. Additionally, such a commitment would provide both sides with a hedge against future trade restrictions and disruptions to transatlantic supply chains.

    Sino-American competition further strengthens the case for defense-industrial cooperation between the United States and Central Europe. China has developed one of the world’s largest manufacturing bases while rapidly expanding its military capabilities. Maintaining the West’s technological superiority will require not only innovation but also industrial scale. A more integrated transatlantic defense industry would allow the United States and Europe to combine resources, reduce supply-chain vulnerabilities, accelerate innovation and compete more effectively against China in a world where industrial capacity increasingly determines strategic power.

    A stronger European defense industry can reinforce American leadership and strengthen Europe by increasing the overall power of the alliance. A larger Western defense ecosystem and a stronger NATO can better deter Russia, compete with China globally and enable Europe to shoulder more of its own defense burden. Europe’s leaders, therefore, should not view defense investment as a competition with the United States, but as a joint venture that can make both partners stronger.