Trump presidency could push Europe to ramp up military spending Bloomberg analysts warn

Key European nations may have to double their defence spending to confront Russia’s aggression in Ukraine and prepare for a potential reduction in US support under a Donald Trump presidency.

The 15 largest European members of NATO could need to increase annual military investment by as much as $340 billion, raising total spending to $720 billion, Bloomberg Intelligence analysts led by George Ferguson noted, per Caliber.Az.

During his campaign, Trump indicated plans to scale back US security commitments to Europe, and during a previous NATO summit, he even threatened to pull out of the alliance if allies failed to boost their defence budgets.

“Russian aggression has already driven increased defence spending in Europe,” Ferguson wrote. “However, more may be needed to support Ukraine, counter Moscow’s broad regional aggression, and manage deepening strategic competition with China.”

The report follows a warning from former European Central Bank President Mario Draghi about a looming “slow agony” for the EU if member states don’t swiftly act to enhance productivity through additional investments. Draghi emphasized the necessity of expanding Europe’s industrial capacity in defence to safeguard the region’s core values.

According to the report, Europe’s military urgently needs tanks, artillery, infantry fighting vehicles, and support aircraft like tankers, cargo planes, and submarine-hunting planes.

Companies that could benefit from the uptick in defence spending include Leonardo SpA, Airbus SE, BAE Systems Plc, and Rolls-Royce Holdings Plc, the analysts highlighted.

Years of underinvestment since the Cold War’s end mean that large-scale rearmament could take more than a decade, with defence contractors facing increasing backlogs and already-stretched aerospace and defence supply chains. The limited capacity of Europe’s smaller defence industrial base may also struggle to meet near- and medium-term demands.

“Europeans may have to rethink some of their spending priorities, with many budgets already under strain,” Ferguson said in an interview. “But the magnitude of the threat is too significant to be ignored.”

By Tamilla Hasanova