A joint communication from the U.S. State Department and the Pentagon has formally objected to potential revisions to the European Union’s defense procurement directive, raising concerns over the future of transatlantic defense trade. The document, submitted February 17th in response to a public consultation launched by the European Commission, warns that any measures prioritizing European companies in defense contracts could trigger retaliatory action from Washington.
The EU is currently reviewing its 2009 Defense and Sensitive Security Procurement Directive, with a revised version expected in the third quarter of 2026. The impetus for the revision stems from a broader push within Europe to bolster its defense industrial base and reduce reliance on U.S. Suppliers, a trend accelerated by geopolitical tensions and, more recently, the war in Ukraine. A key element under consideration is the potential implementation of a “European preference” clause, which would favor European companies in national defense procurement processes.
According to the U.S. Communication, Washington supports the overall goal of increased European defense spending and industrial capacity. However, the document explicitly states that this strengthening must not come at the expense of the transatlantic industrial base or impede collective capabilities. “The United States firmly opposes any modification to the Directive that would limit the ability of U.S. Industry to compete for national defense procurements of EU member states,” the communication reads. It characterizes protectionist policies as “the wrong approach,” particularly given the continued access European firms enjoy to the U.S. Market.
Currently, programs like SAFE – a €150 billion instrument utilizing loans for arms purchases – and funding allocated to Ukraine, including a €90 billion loan facility, already incorporate a threshold requiring at least 65% of purchased equipment to originate from European suppliers. The proposed revisions to the procurement directive could extend this principle to national-level contracts, a move the U.S. Views as a red line.
The historical context of European dependence on U.S. Arms is significant. For decades, approximately two-thirds of European arms imports have come from the United States. Reversing this dynamic, or even significantly reducing it, requires substantial investment and the rebuilding of European production capacity, a process that is underway but will capture time.
The U.S. Communication details potential repercussions should the EU adopt protectionist measures. Washington warns it would “likely review all general exemptions and exceptions to ‘Buy American’ laws” currently granted under bilateral Reciprocal Defense Procurement Agreements (RDPAs). Nineteen of the 27 EU member states have signed such agreements with the U.S., allowing companies like Leonardo of Italy and Rheinmetall of Germany to compete for certain U.S. Government contracts and access the American market. The U.S. Currently makes broad exceptions to its protectionist policies to facilitate purchases from Europe, but those exceptions could be revoked. Future purchases would then be evaluated on a case-by-case basis, prioritizing interoperability with NATO forces.
Washington also points to existing legal commitments. The 19 EU member states with RDPAs have assumed binding obligations, and a protectionist policy embedded in the EU directive would directly contravene those bilateral agreements. The communication further references a 2025 U.S.-EU joint statement on trade, in which the Commission pledged to “substantially increase purchases of U.S. Military equipment and defense goods” and “deepen transatlantic industrial cooperation for defense.”
As of today, the European Commission has not publicly responded to the U.S. Communication. The revised Defense and Sensitive Security Procurement Directive remains under development, with the outcome of the transatlantic dispute uncertain.
