In For a Penny, In for a Pound? The U.S. View on European Defense Spending

Bottom Line Up Front

• The U.S. is continuing to pressure the E.U. about defense spending, continuing a trend that has stretched back through previous administrations.
• The E.U. has established two military platforms for E.U. member states aimed at increasing domestic security as well as various domestic defense industries.
• The U.S. has repeatedly voiced concerns that new E.U. spending initiatives discriminate against American firms, harming transatlantic ties in the process.
• Washington wants it both ways—pressuring Europe to spend more on defense, while also trying to ensure that American firms are the beneficiaries.

The U.S. is once again pressuring the E.U. about defense spending, continuing a trend that has stretched back through previous administrations. The criticism has not gone unnoticed in Brussels, where the Europeans have chafed at what they view as yet another example of the Trump administration’s purely transactional approach to foreign policy. For the Trump Administration, all foreign relations are viewed as a zero-sum winner-take-all challenge. The situation is nearly always presented as binary—either the U.S. gets what it wants, or it is being ‘cheated’ or ‘taken advantage of’ by other countries. This approach has even extended to U.S. foreign relations with some of its closest allies. Incessant haranguing on defense spending has led some European countries to conclude that the issue is less about a common defense and more about the profit margin of the U.S. defense industry, which sells most of the weapons European countries use, the U.S. remains the most dominant defense exporter. The E.U. has stated the initiatives will in no way ‘duplicate’ NATO capabilities, negating what has so far been a common critique from U.S. negotiators.

The roots of U.S. discontent in terms of defense spending by European partners stretches back decades and is not unique to the Trump administration. On the contrary, Washington has long complained that Europe was not doing enough to foot the bill for its own defense, leaving the bulk of the spending and resource commitment to the U.S. Many NATO countries have failed to meet the target goal of spending 2% of their GDP on defense. This has been an issue for every U.S. administration since Reagan. But with the Trump administration, the issue is far more open and contentious, perhaps due in part to the bombast associated with President Trump and his cumbersome approach to foreign relations.

The E.U. has two new cooperative military spending programs in the early stages. The first, known the European Defense Fund, is dedicated to defense research and development. It calls for $14.6 billion spread out over six years, from 2021 to 2027. The second initiative is much more significant: the Permanent Structured Cooperation on Security and Defence (PESCO), which consists of 25 of the 28 member states working together on long-term common and joint military needs. PESCO is also heavily restricted to E.U. members, though ‘third States may exceptionally participate at the level of PESCO projects.’ This restriction has frustrated the U.S., even as NATO and many European countries are collectively spending more on their respective militaries; 22 of the E.U.’s 28 members are also members of NATO.

Washington wants it both ways—pressuring the Europeans to spend more on defense, while also working to ensure that American firms are selling them the weapons. The Europeans have pointed out the double standard. The fraying relationship comes at a time when cooperation is more important than ever, with threats including increasing Russian aggression, intensifying climate change, the fallout from Washington’s withdrawal from the Iran nuclear deal, and continued migration as a result of state failure and instability in the Middle East, North Africa, and South Asia offering persistent and serious security challenges to the global community.