US warns EU over "Buy European" defence rules

The Trump administration has warned the European Union that it could retaliate if proposed defence procurement reforms restrict access for United States arms manufacturers.

In formal feedback to the European Commission, the United States Department of Defense opposed measures that would favour European defence companies over United States firms.

According to Politico, the previously unreported remarks were submitted as part of a European Commission consultation earlier this month.

The standoff underscores growing transatlantic tension over defence industrial policy, as Europe seeks greater strategic autonomy.

Washington argued that limiting United States industry participation in EU defence contracts would amount to protectionism, particularly while European defence suppliers retain access to the United States market.

29 percent growth

The intervention comes as the Commission seeks to strengthen the European defence technological and industrial base and reduce dependence on non-EU suppliers.

Several European prime contractors have reported rising sales across the region. Saab, the Nordic defence prime, said European sales grew by 29 percent between 2024 and 2025. 

BAE Systems also reported double-digit growth, with overall sales up 17 percent year on year. The group said its Swedish businesses, Hägglunds and Bofors, recorded European growth of 32 percent, the strongest regional performance within the company.

The EU has already embedded local content thresholds in major funding instruments, including a one hundred and fifty billion euro loans-for-weapons facility, under which most of the equipment’s value must be sourced within Europe.