18th February 2026
A recent report by Royal United Services Institute (RUSI) has put a stark figure on Europe's new defence ambitions: up to €650 billion in rearmament capital over the next four years, channelled through the Security Action for Europe (SAFE) mechanism.
At the heart of the proposal is a controversial idea — a "Buy European" mandate that explicitly prioritises the European Defence Industrial Strategy (EDIS).
In blunt terms, this would begin the long and politically painful process of reducing and in some cases excluding American defence contractors from Europe's core procurement pipelines.
The question is simple, but the consequences are not. Will this turbo-charge European defence companies, and could it provoke retaliation from the United States?
A potential windfall for European defence firms
There is little doubt that, on paper, European companies stand to gain enormously.
For decades, EU states have relied heavily on US suppliers for:
fighter aircraft,
missile defence systems,
surveillance platforms,
command-and-control software.
Redirecting even part of that €650 billion toward European primes and suppliers could:
stabilise long-term order books,
justify investment in new factories and skills,
strengthen sovereign industrial capacity,
reduce reliance on non-EU supply chains in wartime.
For policymakers in Brussels, this is not only an industrial policy — it is a strategic autonomy project, driven by fears that US political priorities may shift unpredictably over time.
Why this is diplomatically explosive
However, the "purging" of American contractors is precisely the part most likely to trigger friction with Washington.
The United States has long viewed defence procurement as:
a pillar of transatlantic security,
a source of high-value exports,
a means of maintaining interoperability across NATO.
A formal EU policy that explicitly favours European suppliers risks being interpreted in Washington as:
protectionism,
discrimination against US firms,
a breach of the spirit (if not the letter) of existing trade and security agreements.
Would the US retaliate?
Direct retaliation is possible, but unlikely to be immediate or blunt.
Rather than headline-grabbing tariffs, Washington's response would more likely be:
tighter rules on EU firms bidding for US defence contracts,
restrictions on technology transfer,
tougher export-control enforcement,
quieter diplomatic pressure behind closed doors.
The US has already shown through industrial policy and defence legislation that it is willing to favour domestic suppliers when national security is invoked. Europe doing the same would not shock Washington, but it would strain relations, especially if exclusions are sweeping rather than targeted.
Interdependence limits how far this can go
In reality, a full "purge" of American contractors is neither practical nor likely.
Modern defence systems are deeply interwoven:
European platforms rely on US components,
US systems rely on European subsystems,
shared R&D underpins NATO interoperability.
Even advocates of EDIS privately accept that partial decoupling, not total separation, is the realistic outcome. Many procurement programmes are likely to be:
"European-led" but not US-free,
structured with local assembly or IP sharing,
phased in gradually to avoid capability gaps.
Strategic autonomy vs strategic reality
From the EU's perspective, the logic is clear:
Ukraine has exposed ammunition shortages,
supply chains are fragile,
political certainty from allies can no longer be assumed indefinitely.
From the US perspective, the concern is equally clear:
reduced market access,
weaker leverage over allied defence planning,
precedent for wider economic protectionism.
This tension is not about hostility — it is about power, control, and resilience in an era of uncertainty.
Bottom line
Yes, EU defence companies would likely benefit significantly from SAFE and a "Buy European" push.
Yes, the policy risks annoying Washington and could prompt subtle but real retaliation.
No, it is unlikely to trigger a full-blown trade war — the interdependence is too deep.
What is unfolding is not a rupture, but a managed rebalancing of transatlantic defence relations. Europe wants more control over its security destiny; the US wants to retain influence and market access. The outcome will almost certainly be messy, negotiated, and incremental, rather than dramatic.
In short, this is less about Europe turning its back on America and more about Europe no longer assuming America will always be there on the same terms.
Dig Deeper
16 February 2026
Royal United Services Institute (RUSI)
The German Chancellor's opening at the 2026 Munich Security Conference
Making Europe Great Again - US Hostility and the New World Order
The ReArm Europe Plan Squaring the Circle Between Integration and National Sovereignty
Making Europe Great Again?
For decades, Washington demanded a Europe that paid its bills and took responsibility for its own borders. For many in the administration, Trump is finally succeeding where many previous presidents have failed. But the long-term result might not be a grateful junior partner. By forging a Europe through hostility rather than shared values, the US could birth a transactional Third Pole that over time owes Washington nothing. Armed, protectionist and centralised, it could act in its own interests, trading with China if it suits its economy and regulating American tech if it suits its security. The US spent a century trying to unite Europe. It is succeeding - but it might discover that a united continent has no need for an American master.
Munich Security Report 2026
The world has entered a period of wrecking-ball politics. Sweeping destruction - rather than careful reforms and policy corrections – is the order of the day. The most prominent of those who promise to free their country from the existing order's constraints and rebuild a stronger, more prosperous nation is the current US administration. As a result, more than 80 years after construction began, the US-led post-1945 international order is now under destruction.