However, if spending is focused on equipment produced in Europe, and if governments are willing to cooperate productively with the private sector, then the benefits of boosting the continent’s defense sectors will be much greater than the cost. Conversely, if the majority of new expenditures go toward imports, increase deficits, or lead to cuts in social investments, the benefits will be significantly reduced.
Conventional wars, trade wars
European plans could be hindered by trade wars between Western countries. Trump’s recent announcement of 25% tariffs on steel and aluminum and 20% on many goods from the EU threatens to slow growth and ramp up costs for European businesses. The EU estimates that these duties will affect exports worth around €26 billion, and Brussels has responded with similar measures on American imports totaling $28 billion.
In the defense industry, rising prices for metals will increase production costs for armored vehicles, shipbuilding, and aircraft. This uncertainty is already impacting investments. As Andrea Nahles, head of the German Federal Employment Agency, warned, “The erratic trade policy of the USA is a burden on the German labor market” and could result in the loss of around 90,000 jobs within a year.
Trade shocks also threaten overall economic growth. Analysts at the European Central Bank expected GDP to increase by only around 0.9% in 2025, even before the latest trade measures. Derek Bisaccio, a defense market analyst, explains that governments are already struggling with an economic slowdown and large fiscal imbalances, making it difficult to further increase defense budgets.
A global trade war could trigger price increases across the board: on energy, raw materials, and electronics — all of which are crucial for weapons systems. And the European defense sector may face competition from cheaper Asian imports, putting pressure on the continent’s arms manufacturers. Tariff barriers and disruptions in supply chains could fuel inflation, higher interest rates, and budget cuts, thereby limiting the ability to finance military programs.
Therefore, if Europe fails to restore a stable trade environment, its defense goals will be put at risk. The EU plan encourages procurement from partners to share costs. However, if geopolitical upheaval leads to new sanctions or trade barriers, the anticipated economic benefits may not materialize.
Bread and tanks: a forecast
Readiness 2030 may only be the beginning. NATO representatives warn that the previous target of 2% of GDP for defense spending is no longer sufficient. Secretary General Mark Rutte stated that new capacity-building plans might require more than 3%. U.S. Secretary of Defense Pete Hegseth and some of his counterparts — such as Germany’s Defense Minister Boris Pistorius — consider NATO’s existing 2% GDP defense guideline outdated, hinting that a more appropriate benchmark might now be 5%.
This does not render the current program useless. The goals of Readiness 2030 include not only increasing spending but also using it wisely through joint procurement and innovation, which, according to Rutte, can reduce the total funds needed. Incidentally, this is why the EU plan explicitly issues calls to “buy European” and pool projects so that every euro delivers more value.
Ultimately, EU leadership expects that the benefits in security will justify the expenditures. Politicians are unanimous: collective peace and stability are worth it. For ordinary citizens, the question will be whether the short-term economic benefits — such as jobs and technology — outweigh the long-term risks. It will be up to policymakers to find a balance between the economic growth opportunities offered by high-tech military programs and the potential budgetary burden, so that social needs are not compromised in pursuit of protecting populations from an external threat.