Washington issues a stern warning to the European Union against protectionist defense policies that favor local producers, known as ‘buy European’ clauses in a revised EU security directive. The U.S. State Department and Department of Defense submitted their response on February 13, criticizing measures that exclude American companies while European firms enjoy open access to the U.S. market.
“Protectionist and exclusionary policies that strong-arm American companies out of the market when Europe’s largest defense firms continue to greatly benefit from market access in the United States are the wrong course of action,” states the U.S. submission.
This rebuke follows U.S. President Donald Trump’s executive order, signed just over a week earlier, which prioritizes arms sales to allies with higher defense spending and accelerates delivery of U.S. weapons and equipment.
Broader U.S. Concerns Over EU Policies
U.S. officials link EU procurement restrictions to risks for NATO capabilities and violations of a recent U.S.-EU trade framework, where the EU committed to purchasing more American weapons. “U.S. companies are deeply integrated into the European economy and supply chain, employ thousands of European citizens in highly skilled jobs, and help Europe deliver credible capabilities,” the submission notes.
Excluding U.S. producers, it argues, hinders European nations from acquiring essential defense capabilities and strains transatlantic NATO ties. The EU counters with its Anti-Coercion Instrument to shield members from economic pressures. In response, the U.S. signals potential retaliation against policies disadvantaging American defense firms.
Canada’s ‘Build, Partner, Buy’ Defense Strategy
Canada’s freshly unveiled defense industrial strategy adopts a “build, partner, buy” approach, prioritizing domestic manufacturers. If local production falls short, the plan calls for partnerships with allies to bring investment and technology to Canada. Foreign purchases serve as a last resort.
“Only after exhausting these options will we buy from abroad,” Prime Minister Mark Carney stated. The strategy targets awarding 70 percent of federal defense contracts to Canadian firms within a decade.
Carney dismisses tensions with Trump’s arms agenda, emphasizing complementarity over competition. “We are very confident in our ability to grow our defence capabilities,” he said. “I’m going to use the term complementary as opposed to competition, but complementary to American supply.”
Canada’s Unique Defense Industry Landscape
Canada boasts 12 Original Equipment Manufacturers (OEMs) producing major equipment, including General Dynamics Land Systems-Canada, CAE Inc., General Dynamics Mission Systems-Canada, General Dynamics Ordnance and Tactical Systems-Canada, MDA Space, Bell Textron Canada, Bombardier, Irving Shipbuilding, Seaspan Shipyards, L3Harris Wescam, Lockheed Martin Canada, IMP Aerospace & Defence, and Roshel. Many are subsidiaries of U.S. contractors or supply components for American products.
This structure raises questions about transforming defense into a national economic driver under the current model.
Global Models for Defense-Led Growth
South Korea’s Centralized Approach
South Korea exemplifies defense procurement as an industrial engine through its Defense Acquisition Program Administration (DAPA), which handles requirements, development, exports, and growth. Secretary of State for Defence Procurement Stephen Fuhr notes DAPA’s sophistication surpasses Canada’s efforts.
Prime contractors like Hanwha, Korea Aerospace Industries, and Hyundai’s defense units thrive under state-guided policies. “When the military decides to acquire it, we do it,” said Seok Jong Gun, South Korea’s minister of defence procurement. “The decision-making process is very fast.”
This system uses domestic needs as a launchpad for exports, enabling rapid scaling in artillery, vehicles, aerospace, and submarines.
Sweden’s Hybrid Strategy
Sweden leverages defense for economic gains via publicly traded firms like Saab, without state ownership. Influence stems from the Swedish Defence Materiel Administration (FMV), a savvy buyer fostering long-term industry collaboration, and stringent export controls by the Inspectorate of Strategic Products.
