This article is part of a series featuring Atlantic Council experts’ analysis and recommendations on the key challenges facing allies at the upcoming NATO Summit in Ankara, Turkey, and beyond.
WASHINGTON—The recent US military campaign against Iran and Russia’s ongoing invasion of Ukraine have ratcheted up pressure on US and European defense companies to produce more and innovate faster. But to understand the origins of defense industrial cooperation among NATO allies, and what’s at stake at the upcoming Ankara summit, it’s necessary to start with a different war in a different region altogether.
On December 17, 1950, Lt. Col. Bruce H. Hinton, piloting his F-86 Sabre, shot down a Soviet-built MiG-15 over Korea, marking the first air-to-air engagement between the two types of aircraft. The Sabre’s effectiveness against Soviet MiG-15s quickly made it the main US jet fighter in the Korean War, which in turn fueled demand for the aircraft among NATO allies.
The United States could not produce enough of the jet fighter to meet demand, however, leading Washington to authorize manufacturing under license by Canadian and Australian companies to speed delivery. During World War II, the United States and Great Britain had cooperated on the development and production of some defense articles, but the Sabre was one of the earliest—and at the time, the most important—instance of defense industrial cooperation between NATO allies since the Alliance was founded in 1949.
Cooperation increased thereafter, as the US government authorized NATO allies and their respective defense industries to build US-designed defense equipment. This contributed to the formation of a transatlantic defense industrial base, though not a balanced one. European states became overly reliant not only on the US military for NATO deterrence, but also on the US defense industrial base for the capabilities it brought to the fight. As European countries increased their procurement from US defense companies, the European defense industry atrophied further, which in turn made European militaries even more reliant on the United States.
Today, this cycle may be breaking. European allies are ramping up defense spending and turning defense dollars into real capabilities. At the 2025 NATO Summit in The Hague, allied leaders pledged to spend 5 percent of their countries’ economic output on defense by 2035. Between 2024 and 2025, European allies and Canada increased their spending on defense by ninety billion dollars, amounting to a 20 percent increase. Also at The Hague, allies committed to work toward eliminating defense trade barriers, expand transatlantic defense industrial cooperation, and harness emerging technology. This year’s Ankara summit will build on these commitments and feature the largest Defense Industry Forum in NATO’s history, bringing together governments, defense companies, start-ups, investors, and innovators to accelerate cooperation. The message to allies and industry alike will be unambiguous: Act on producing combat-ready capabilities and significantly scale up defense production and innovation.
Beyond Ankara, and as Europe seeks to break this cycle of dependency on the United States, there is a risk of a rupture in the transatlantic defense industrial base. But there is also a pathway that leads to a more integrated and mutually beneficial model built on the foundation of expanded defense industrial cooperation. The Atlantic Council’s Reimagining European Defense and Innovation (REDI) task force, for which I serve as the principal investigator, is aimed at developing analysis and recommendations to strengthen this latter pathway. The task force’s work so far suggests that accelerating and expanding this cooperation will require two lines of effort in particular: overcoming deepening mistrust on both sides of the Atlantic and addressing technocratic barriers that present hurdles even in the best of times.
The trust deficit
The Trump administration’s pressure campaign leading up to The Hague summit has contributed to a meaningful rise in European defense spending. But this pressure was also accompanied by a series of statements and actions that have left European member states deeply skeptical about US reliability in the face of the threat of Russian aggression.
Several US actions related to defense industrial cooperation and arms sales have further undermined trust. First, the United States continues signaling to European governments that they must meet NATO capability targets, but then it delays or redirects Foreign Military Sales deliveries that these governments are counting on to do so. This has left some European stakeholders fearful that the United States might delay or divert arms in a contingency. Second, Europeans worry that the United States might direct industry to withhold software updates or the provision of spare parts. Platforms such as the F-35 and Patriot air defense systems depend on continuous software updates to remain effective—software for which the United States government or contractors control the source code.
There is a risk that this concern becomes extrapolated to mean that any item co-produced with US industry could be at risk because of International Traffic in Arms Regulations (ITAR) and Technology Security Foreign Disclosure (TSFD) rules. In response, the European Commission is insisting on design authority as a prerequisite for some of its major funding instruments, and individual member states are indicating to European industry that they have a better chance of getting contracts, and more money, if they eschew partnership with US firms.
From the perspective of US officials and even some European officials as well, these policies go overboard on protectionism at the expense of precisely the type of cooperation that Europe needs to achieve its readiness objectives. Those Europeans in favor of these policies highlight their concerns about US reliability. They also express their disappointment with long-standing “Buy American” policies and, more recently, US President Donald Trump’s tariffs. The net result is to contribute to a climate of mistrust at precisely a moment when industry on both sides of the Atlantic should be working more closely together.
The industrial ties that bind
The simplest argument for increasing defense industrial cooperation is also the strongest: Neither the United States nor Europe can achieve their production targets alone. The two sides need one another, and this is something that industries on both sides of the Atlantic recognize. US firms see the writing on the wall. If the European ambition is to reduce arms purchases from the United States to strengthen their domestic industrial bases, then maintaining access to the European market requires US firms to shift from exports to joint ventures.
As an additional benefit, US firms can leverage the manufacturing capacity of European countries to offset production shortages and supply chain challenges at home. Similarly, co-producing and co-sustaining US systems can help European allies meet their capability targets and contribute to a stronger European defense industrial base. These types of arrangements are particularly important for small and medium-size European firms seeking to grow.
Optimizing defense industrial cooperation over the medium- to long-term will require the United States and European countries to establish a framework for co-development, co-production, and co-sustainment. On the US side, this may need to be paired with export control reforms that address at least some of the lingering concerns over the ITAR and TSFD review processes. European member states may need to rethink potential barriers to entry for US firms, especially in terms of design authority.
Watch the upcoming NATO Summit in Ankara carefully, as it provides an opportunity for the types of headline-making announcements that can signal a commitment to defense industrial cooperation. At NATO’s seventy-fifth summit in 2024, allies adopted the Industrial Capacity Expansion Pledge to strengthen the transatlantic defense industrial base, including by making defense industrial cooperation the norm. Notable deals have included US and German defense companies agreeing to collaborate on air-defense interceptors and rocket and missile production. Other deals, including one to co-produce advanced medium-range air-to-air missiles, have been in the works for several years. Announcing this deal—or others like it—would illustrate that the appetite exists for further cooperation.
