[By Observer Net, Chen Sijia] "Targeting the growing military spending, U.S. arms companies are busy seizing the European market." According to a report by the Financial Times on June 24, the Ukraine-Russia conflict and U.S. President Trump's demand for Europe to take more security responsibilities are forcing European countries to significantly increase their military spending. The upcoming NATO summit is expected to require member states to raise their military spending to 5% of GDP. To avoid being excluded from European defense projects, U.S. defense companies are trying to expand cooperation with European companies.

At last week's Paris Air Show, senior executives of major U.S. defense companies repeatedly emphasized transatlantic relations between the U.S. and Europe, promising to help European countries develop their defense capabilities. Bernd Peters, Vice President of Business Development and Strategy at Boeing Defense, said: "We are a U.S. company, but also a global company."

Peters said that the message Boeing conveys to its European partners is, "When they consider their own sovereignty capabilities... we are there to help them develop this capability."

Anduril, a U.S. defense technology company, also sent a similar signal after announcing a new partnership with German Rheinmetall to develop drones for Europe. Anduril stated that this collaboration reflects the concept of "building together rather than building for," emphasizing "local control, transparency, and adaptability, rather than dependence or lock-in."

The Financial Times pointed out that an increasing number of U.S. defense companies are focusing on opportunities for joint R&D and local production in Europe. Analysts believe that the Ukraine-Russia conflict and Trump's demand for Europe to take more security responsibility are forcing European countries to increase military spending, and U.S. companies do not want to miss such business opportunities.

Byron Callan, managing partner at research firm Capital Alpha Partners, said that although the U.S. offers growth, Europe is where the opportunity lies.

"Patriot" missile defense system used by the German army, Visual China

For a long time, U.S. defense giants have had close ties with Europe, and European operations account for a significant portion of their annual revenue. For example, in 2024, European operations accounted for 11% of Lockheed Martin and Raytheon Technologies' annual revenue. Multiple European armies operate Lockheed's F-35 fighters, and Raytheon's "Patriot" missile defense systems dominate the air defense market.

Over the past two years, Lockheed Martin and Raytheon have announced extensive production partnerships in Europe. Lockheed will establish large-scale missile production facilities with Rheinmetall, while Raytheon and missile manufacturer MBDA's joint venture will produce "Patriot" missiles for NATO in Germany.

Thomas Laliberty, president of Raytheon's land and air defense systems, said that different countries have different views on sovereignty, "Raytheon is making every effort to understand each country and help them meet these requirements within our capabilities."

Frank St John, chief operating officer of Lockheed Martin, told the Financial Times that the company is expanding its supply chain in Europe and building new factories, "When European countries want to purchase more products domestically, partnerships are beneficial for us because we become partners of European countries and European companies."

He added that Lockheed Martin ensures these partnerships meet European funding standards and can satisfy European requirements.

However, after Trump returns to the White House, U.S. defense companies also need to face the deterioration of U.S.-Europe relations. Many European countries are beginning to doubt whether the U.S. is a reliable ally, and more people are calling for reducing reliance on U.S. weapons. Despite the U.S. Department of Defense asserting that weapon systems like the F-35 cannot be remotely controlled, European concerns remain unaddressed.

The report mentioned that a key issue European defense industry executives are particularly concerned about is that companies may face problems in exporting new equipment or ensuring software upgrades in the future.

Weapons subject to the U.S. International Traffic in Arms Regulations (ITAR) cannot be manufactured, sold, or transferred without U.S. approval or authorization. Although European countries have long been accustomed to these restrictions, European defense industry executives say doubts about the reliability of the Trump administration have raised concerns among some European countries.

Éric Béranger, CEO of MBDA, said that although the company values its relationship with U.S. partners, European governments may not want ITAR to be a sword hanging over their heads, "There are different views between countries."

Roberto Cingolani, CEO of Italian defense giant Leonardo, believes it is important to ensure interoperability of weapons under the "umbrella" of the NATO security alliance, "I am very neutral. Whatever we do with our peers and Americans under the NATO umbrella, it must be established in a very clear way."

Cingolani pointed out that to achieve interoperability of weapons between allies, it is important to ensure that each country has the ability to modify or upgrade necessary software or components when needed.

Trump signed an executive order in April to reform the U.S. foreign military sales system. U.S. industry executives said this would make it easier for U.S. defense companies to do business overseas.

European industry executives emphasized that Europe has the capability to defend itself, but this takes time. They acknowledge that even with more funding, Europe still needs to first work on reducing the fragmentation of its defense industry. Béranger said: "We have the minds, industrial tools, talent, and even money. Now the issue is political will and how we organize ourselves, but we have the capacity to build the sovereignty we want."

This March, the European Commission proposed an 80 billion euro "Re-arm Europe" plan aimed at enhancing the defense capabilities of European countries. As part of this project, the EU approved the "European Security Action" plan on May 27, providing 150 billion euros in loan support for member states to purchase security and defense equipment.

The "European Security Action" will provide funds in the form of low-interest, long-term loans to EU member states in need, with 35% of the loans available for purchasing weapon components produced outside Europe. Poland, the rotating EU presidency, said: "We approved the 'European Security Action' - the first large-scale defense investment plan at the EU level. The more we invest in security, the more we can prevent those who want us harm."

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