In 2026, Europe is likely to have to deal with the reality that the Trump administration is serious about its threats to turn away from the continent, both in terms of politics and manpower. But, if countries are serious about their plans to invest, the year may also prove to be a pivotal one in terms of a rebirth for local industries.
As 2025 winds down, relations between Washington and Europe appear headed for a low period. The Trump administration’s National Security Strategy, released at the start of December, shocked the European community for its direct swipes at continental leaders, including the claim that region faces the “stark prospect of civilizational erasure.”
Former Swedish Prime Minister Carl Bildt summed up how many Europeans feel about that document when he wrote that it read like it had been “hijacked by Vice-President JD Vance and his crew — JD Vance on steroids … We are not going ‘extinct,’ and we are certainly not about to commit ‘suicide.’ We remain a magnet in a turbulent world.”
[This article is one of many in a series in which Breaking Defense reporters look back on the most significant (and entertaining) news stories of 2025 and look forward to what 2026 may hold.]
Another major tension point is the White House’s pressure on Ukraine to sign a ceasefire agreement that, critics say, gives far too much power to Russia. The pressure may be working, as the recent decision by Ukrainian President Volodymyr Zelenskyy to drop NATO membership in return for Western security guarantees indicates. But for Europe, a deal that results in a win for Russia is a loss for the military alliance.
German Chancellor Friedrich Merz has been unequivocal about the reality of a US-Europe reset, arguing that “the decades of Pax Americana are largely over for us in Europe,” stating that “Americans are now pursuing their own interests very, very vigorously, and the only response to this can be for us to pursue our own interests as well.”
This transatlantic political turbulence could disrupt orders from European customers for US defense equipment over the long term, but if the last year is anything to go by, business is likely to be relatively predictable. Take the example of Germany: Despite pushing hard to emerge as Europe’s defense champion, Berlin this year has placed or recommitted to high-profile orders for Lockheed Martin F-35A fighter jets, Boeing P-8A Poseidon maritime patrol aircraft, CH-47F Chinook heavy-lift helicopters and RTX Patriot air defense systems, despite Merz calling in February for “independence” from the US.
Overall, European nations have pledged billions in defense increases this year. Looking at Europe’s domestic industrial base, if there are markers from this year that can loosely predict how developments in 2026 could play out, then consolidation and greater collaboration among primes will be worth keeping an eye on.
The agreement between Airbus, Leonardo and Thales to bring their three space businesses together — a move billed as one to contest SpaceX’s dominance — demonstrates that the continent can pursue consolidation successfully and take on the US market. Forecasting annual turnover of €6.5 billion ($7.5 billion), the new venture is certainly kicking off in a confident mood.