From Reliance to Resilience: Why Europe Must Hedge Against U.S. Volatility and Build a Cohesive Defence

Russia’s full-scale invasion of Ukraine has exposed Europe’s capability gaps and fragile supply chains, as well as the costs of fragmented procurement. Meanwhile, American politics has become increasingly erratic, oscillating between interventionist and isolationist impulses, congressional hold-ups and abrupt policy changes across election cycles. The new US–EU trade framework, announced in late July 2025 and detailed in a joint statement on 21 August, formalised this situation by explicitly linking market access and energy flows to a broader geopolitical agreement.

To reduce its overdependence on the United States, Europe must diversify its defence donors and consolidate a harmonised EU military posture. This is not about weakening the transatlantic alliance, but rather ensuring that Europe can deter, defend and sustain support, even when U.S. policy is volatile. The goal is to achieve long-term security, resilience and strategic autonomy, anchored in interoperable standards, joint procurement and robust, multi-partner supply chains.

The New U.S.–EU Trade Deal: Economic Dependence as Strategic Vulnerability

The trade framework caps most U.S. tariffs on EU goods at 15%, while maintaining tariffs of 50% on steel and aluminium for now. It also paves the way for substantial EU purchases of US energy, reportedly valued at $750 billion by 2028, and signals approximately $600 billion in EU investment in American strategic sectors. Additionally, it allows for significant EU procurement of US military equipment. While European officials and analysts describe a set of exemptions and sectoral arrangements, the headline message is clear: market access now sits alongside energy and industrial policy in a single, politically managed package. For Brussels, the alternative of 30% tariffs being avoided underlines the leverage that Washington now wields. In short, trade is no longer a neutral backdrop; it has become a tool of statecraft that can be tightened or loosened in line with security negotiations.

These terms have strategic consequences. The most important consequence is that they increase the EU's economic dependence at a time when it is seeking to become more autonomous in terms of security. Capital outflows and tariff headwinds for key European exporters restrict fiscal space for defence modernisation. In terms of sectors, the deal undermines the EU's competitiveness in the automotive, pharmaceutical, and semiconductor industries. It could also lead to division within the EU, as export-heavy versus export-light states clash. Furthermore, coercive measures — particularly tariff 'snap-backs' — are now part of the game and can be invoked if one side deems the other to have 'under-delivered'. This foreshadows future linkages between defence aid and economic concessions, unless Europe diversifies its options.

The U.S.: From Anchor Ally to Variable Partner

None of this means the United States has ceased to be Europe’s essential ally. But in 2025, Trump-era unpredictability turned tangible: in early July, the administration abruptly paused shipments of U.S. weapons to Ukraine before reversing course within days; President Trump publicly declined to say who ordered the pause. Aid flows resumed shortly after and additional packages were touted later in the month, even as reporting indicated new usage restrictions and case-by-case approvals on long-range strikes with U.S.-supplied munitions. The July 28 U.S.–EU trade deal and the August 21 joint energy statement further underscored how economic leverage and security policy now move in lockstep. 

Bandwidth is another constraint. While Europe relies on U.S. deterrence, Washington's focus is shifting firmly towards the Indo-Pacific. Exercises such as Super Garuda Shield 2025, which began in Indonesia in late August, highlight this strategic shift, as well as the ongoing demand for U.S. forces in the region. Europe cannot assume priority in Washington's planning cycles and must prepare for this possibility.

The Case for Donor Diversification

The trade framework funnels vast amounts of EU capital westward, increasing exposure to a single supplier. Europe should expand its coalition of supporters to include Canada, the UK, Japan, South Korea and Australia, and utilise the Ukraine Defence Contact Group (UDCG) as a platform for not only pledging, but also for procurement, production and sustainment. The US Department of Defence's own materials note that the UDCG routinely brings together 40–50 nations, and met for the 25^th time in January 2025. This could form the basis of a long-term burden-sharing architecture if it is used to secure multi-year, multi-pillar commitments.

Diversification is meaningless if Europe remains a collection of mismatched puzzle pieces. The EU’s armed forces still operate around 178 different major weapons systems, compared to around 30 in the United States — a statistic that has become shorthand for the cost of fragmentation. Interoperability, maintenance and training all suffer when every nation uses its own bespoke equipment; economies of scale disappear. Europe can therefore make the fastest gains by standardising logistics, creating common munitions families and enforcing data standards, ensuring that parts, software and training are interchangeable by default.

The building blocks for a more cohesive approach are in place. The Act in Support of Ammunition Production (ASAP) is injecting €500 million to increase European ammunition production to 2 million shells per year by the end of 2025. NATO and industry reports suggest that production is now accelerating, with significant new plants coming online. The European Defence Fund (EDF) has committed €910 million to collaborative projects involving drones, mobility and disruptive technology in its 2024 funding round. EDIRPA, adopted in 2023, incentivises joint procurement to reduce duplication and address urgent requirements. While these instruments are not silver bullets, together they have the potential to transform budgets into readiness if backed by rules that reward interoperability.

However, the EU must also address bottlenecks in the delivery of its European Peace Facility (EPF). The EPF is a flexible, extra-budgetary instrument designed to enable the EU to act quickly by reimbursing member states for the delivery of both lethal and non-lethal (tactical) equipment, as well as financing assistance measures directly. In practice, however, the EPF became a bottleneck in 2023–2025: repeated Hungarian vetoes and disputes over the use of windfall profits stalled reimbursements totalling over €6 billion, causing significant delays to the delivery of tactical weapons that states had planned or shipped, with knock-on effects on stocks and new orders. While the EPF's funding ceiling for the period 2021–2027 now exceeds €17 billion, including a €5 billion Ukraine Assistance Fund top-up in March 2024, governance issues and legal challenges in 2025 have repeatedly slowed disbursements, undermining the instrument's intended agility.

To expand its support base beyond traditional donors, Europe should establish pragmatic partnerships with countries in the Global South, focusing on logistics and non-military enablers such as port access, overflight rights, energy and refined fuels, critical raw materials, mid-stream processing, as well as medical, engineering and humanitarian resources. Structured offtake agreements, co-investment in processing capacity and pre-positioned relief stocks can strengthen these ties while reducing the risk to private capital. If done well, this will spread risk, enhance resilience, avoid aid fatigue from any single source, foster closer relationships with non-US allies and diversify supply chains away from US chokepoints — without weakening the transatlantic bond.

The challenge lies in coordination. External partnerships must integrate with EU and NATO planning cycles and common technical and data standards; otherwise, they simply create another layer of fragmentation. Each partnership should have a clear governance structure in place, including shared dashboards, readiness metrics, standardised contracts and agreed surge clauses, to ensure that logistics, energy and materials can be made available quickly, turning today’s mosaic into a coherent operational picture.

Towards a Harmonised EU Military Posture

Europe’s starting point is uneven: national readiness levels vary widely, procurement is duplicative, and logistics chains are calibrated to legacy platforms that don’t talk to each other. Yet the scaffolding for a more coherent posture already exists in the EU’s supranational initiatives—joint research and procurement frameworks, mobility programs that clear cross-border bottlenecks, and funding instruments that nudge capitals toward standard solutions. The task now is to turn these frameworks into muscle memory. That means building a genuinely common strategic culture and threat picture to drive capability choices, standardising logistics and command arrangements so units can plug and play at short notice, and fast-tracking the integration of emerging technologies, so they are interoperable by default. The barriers are political sovereignty concerns and uneven budgets, but those are precisely why Europe should codify common standards, as interoperability is the bridge between national control and collective readiness. 

Europe in a Multipolar Future

The external environment is shifting towards fiercer competition: China’s rise, an assertive Russia, a more uncertain United States and persistent instability across the MENA region. In this context, Europe must plan for potential adverse outcomes. One possibility is a further U.S. pullback, with tariff caps rising to 30% and energy clauses being used as leverage. Another scenario is a transatlantic rift after 2026, where trade tensions spill over into debates about NATO cost-sharing, raising the risk of conditionality in security guarantees. To hedge against these scenarios, Europe should develop an adaptive playbook that involves mapping donors and securing multi-year contributions beyond the United States. Crucially, Europe should empower local and neighbouring military industries for rapid deployment, ensuring availability within weeks rather than years. Ukraine’s battlefield experience proves that the most essential items are not “fancy” drones, but relatively small, inexpensive, scalable systems that can cause significant damage, paired with robust air defence and electronic warfare capabilities to survive in a contested environment.

Foresight ties this together. Military planning should be continuously stress-tested against political, economic, technological, and climate risks, with future scenarios that assume worst-case combinations rather than single shocks. That approach aligns investment with vulnerability, accelerates decisions before crises bite, and ensures Europe can act even if allies are distracted elsewhere.

Conclusion

Over the next few years, the EU and its member states should transition from pledges to action by establishing an interoperability baseline and initiating a production surge. This should begin with the implementation of EU-wide technical and data standards, logistics and munitions, enabling units to operate seamlessly across borders. Furthermore, more procurement should be shifted towards joint, multi-year framework contracts that incorporate local or neighbouring co-production and explicit surge clauses. In parallel, the EPF's decision-making processes should be streamlined to prevent delays caused by individual states and to pre-fund rapid tranches for both lethal and non-lethal tactical equipment. Binding war reserve targets, with quarterly transparency, should be set for artillery ammunition, air defence interceptors, energetics and propellants. 

Europe must also empower nearby defence industries for rapid deployment by setting up pathways for small, inexpensive, scalable systems alongside layered air defence and electronic warfare. This can be achieved by pre-contracting critical minerals and explosives to reduce bottleneck risks, and by concluding five-year partner compacts with the UK, Canada, Japan, South Korea, and Australia that include training, intelligence, surveillance, and reconnaissance, air defence, and industrial co-production. 

Europe is at a strategic turning point. The 2025 trade deal made it clear that economic and military dependence are converging and that leverage can quickly shift across domains. Donor diversification and EU defence harmonisation are therefore not optional extras, but immediate requirements. While the transatlantic alliance remains vital, it can no longer be the sole foundation of European security.