European defence: industrial ambition challenged by US export control dependency

In 2025, the European Union took a significant step toward strengthening its defence industrial base with the adoption of the REARM Europe plan and the publication of the European Defence White Paper. The initiative aims to foster a more integrated and sovereign European defence industry, capable of reducing strategic dependencies on non-European suppliers.

Key measures include enhanced joint procurement between Member States, increased funding for innovation and production, and the development of independent European industrial capabilities. To support these objectives, the EU has introduced a €150 billion loan mechanism, notably involving the European Investment Bank and public-private partnerships.

Despite these ambitions, a major structural challenge remains: Europe’s continued reliance on US-origin technologies. A substantial share of military equipment used across Europe incorporates components subject to US ITAR and EAR export control regulations. This dependence can significantly restrict European companies’ ability to engage in certain transfers, international cooperation projects, or exports to third countries.

As a result, export control has become a strategic issue for the European defence sector. Beyond regulatory compliance, it now directly affects industrial sovereignty, programme autonomy and long-term competitiveness. Defence companies must strengthen their compliance frameworks, anticipate the extraterritorial effects of US regulations and integrate export control considerations early in the design and partnership phases of defence programmes.

Strengthening Europe’s defence industry is therefore not only a matter of financial investment. It also requires tighter control over critical technologies, supply chains and regulatory exposure to ensure that newly developed capabilities remain under European decision-making authority.