Key Takeaways
- The Trump administration’s National Security Strategy has sparked tension with Europe.
- European nations have pledged billions in defense increases.
- Industry collaboration between US and European firms is expected to flourish in 2026.
In 2026, Europe is likely to face challenges in its relations with the US, particularly regarding politics and manpower. However, if countries invest in their local industries, the year may prove pivotal. Industry collaboration between US and European firms is expected to flourish, with examples including joint projects such as the Global Mobile Artillery Rocket System (GMARS) program and F-35 fuselages. The EU’s domestic industrial base has pledged billions in defense increases, and consolidation among primes will be worth keeping an eye on.