Rearming for the Future
US ambassadors to the EU and NATO recently submitted comments opposing a “Buy Europe” approach in the EU’s defense procurement laws. Those laws are currently under review by the European Commission. The US administration’s note sparked some head‑scratching, given Washington’s own track history, including its Buy America Act requirements.
The instinct behind both “Buy Europe” and “Buy America” provisions is understandable. Governments on both sides of the Atlantic are grappling with the consequences of decades of underinvestment in defense-industrial capacity, fragile supply chains, and a recognition that military readiness depends on having a strong industrial base at home. Defense procurements, unlike more traditional government procurements, are largely exempted from international obligations such as the World Trade Organization (WTO) Government Procurement Agreement (GPA).
During the Cold War, major European NATO allies routinely spent 2.5%–4% of GDP on defense. However, over the past 20 years, European defense spending has hovered around 1%–1.5% of GDP. In the wake of Russia’s full‑scale invasion of Ukraine in 2022, defense spending is ramping up to meet NATO’s new 5% target by 2030.
Both the United States and Europe are tightening their requirements at the exact moment when they are also looking to become more agile and to speed up the delivery of products to battlefields. Currently, 97% of the US federal government’s procurements by value go to US firms. Of the small number of contracts won by foreign suppliers, nearly 90% of the procurements were Department of Defense contracts that were won and fulfilled by the US affiliates of British or other European firms. For each contract, at least 65% of a manufactured end product’s cost must be spent domestically or in a qualifying partner country, rising to 75% in 2029 and beyond.
While this fulfills national goals to provide more incentives to build the local industrial base, it does not solve the more immediate issues of agility and speed needed to meet the technological advances taking place today. Efforts are being made to address this: The Department of Defense is restructuring the chain of command within its acquisitions system, while the EU has launched significant new funding and joint procurements to incentivize research, production, and deployment of new systems. How these will function in practice remains an open question.
Most procurement cycles are still measured in decades, even as critical capabilities such as software, drones, sensors, and satellites evolve on timelines measured in months—not to mention the head‑spinning changes being brought about by artificial intelligence. The war in Ukraine has underscored how quickly battlefield innovation can outpace traditional acquisition models, from drones and electronic warfare to AI‑enabled targeting and logistics systems.
Attempts to draw harder procurement borders underestimate how integrated defense ecosystems have become and how costly fragmentation would be. An EU that systematically excludes non‑European suppliers risks slowing its own rearmament at precisely the moment when speed and scale matter most. Restrictive eligibility rules shift attention away from innovation and delivery and toward compliance and paperwork. At the same time, US criticism of “Buy Europe” overlooks how Washington’s own complex “Buy America” rules, waivers, and exceptions complicate procurement acceleration.
The issue is whether exclusionary procurement rules are the most effective way to achieve readiness, resilience, and technological edge. Increasingly, the evidence suggests they are not.
If the goal is to rearm and modernize quickly, the focus should be on the structural bottlenecks that affect both systems. These include fragmented demand signals, limited use of joint procurement, insufficient long‑term contracting that would allow industry to invest with confidence, and procurement rules that make it difficult for nontraditional suppliers to participate. Small and mid‑sized firms, often at the forefront of emerging technologies, continue to face high barriers to entry into defense markets on both sides of the Atlantic.
A more productive transatlantic conversation would focus less on who is excluded from defense markets and more on how procurement systems can be made fit for purpose. Prioritizing speed, adaptability, and scalability as core procurement criteria for new technologies, alongside cost and security, is a first step. Expanding co‑production and co‑development frameworks with trusted vendors, mutual market access, and shared standards would strengthen industrial resilience. Finally, procurement regimes should not be treated as additions to legacy platforms, but must be better tailored to rapidly evolving capabilities.
Rearmament for the 21st century will not be delivered by procurement nationalism alone. It will depend on whether the United States and Europe are willing to reform policies to fit the needs of today. If the objective is credible deterrence and collective security, then procurement systems must move as fast as the threats they are meant to counter. “Buy Europe” and “Buy America” may offer political reassurance, but without deeper reform, they remain obstacles rather than solutions.
The views expressed herein are those solely of the author(s). GMF as an institution does not take positions.