Washington recently issued a stern warning to the European Union against protectionist defense policies that prioritize domestic producers, known as “buy European” clauses in a revised EU security directive. The U.S. State Department and Department of Defense submitted their response on February 13, stating that such measures exclude American companies while European firms enjoy broad access to the U.S. market.
“Protectionist and exclusionary policies that strong-arm American companies out of the market when Europe’s largest defense firms continue to greatly benefit from market access in the United States are the wrong course of action,” the U.S. submission declared.
U.S. Executive Order Boosts Arms Exports
This rebuke follows U.S. President Donald Trump’s executive order signed on February 6, which prioritizes arms sales to allies increasing their defense spending. The order accelerates approvals to deliver U.S. weapons faster to partner militaries.
U.S. officials view Europe’s defense buildup as an economic challenge. They argue that excluding American producers risks undermining NATO goals, breaching U.S.-EU trade commitments, and limiting Europe’s access to essential capabilities. “U.S. companies are deeply integrated into the European economy and supply chain, employ thousands of European citizens in highly skilled jobs, and help Europe deliver credible capabilities,” the submission noted. Such restrictions, it warned, would weaken transatlantic ties.
The EU counters with its Anti-Coercion Instrument to shield members from economic pressures. Washington, in turn, signals potential retaliation against policies favoring European firms over U.S. ones.
Canada’s ‘Build, Partner, Buy’ Defense Strategy
Canada’s fresh defense industrial policy adopts a “build, partner, buy” approach. It prioritizes domestic manufacturers, then alliances for co-development and investment, resorting to foreign purchases only as a last option.
Prime Minister Mark Carney emphasized this on Tuesday, stating, “Only after exhausting these options will we buy from abroad.” The plan targets 70% of federal contracts to Canadian firms within a decade.
Carney dismissed concerns that Trump’s order pits Canada against U.S. industry. “We are very confident in our ability to grow our defence capabilities,” he said. He described Canadian efforts as “complementary to American supply” rather than competitive.
The U.S. embassy in Ottawa offered no comment on how this applies to Canada’s plans versus the EU warning.
Canada’s Unique Defense Base
Canada hosts just 12 Original Equipment Manufacturers (OEMs) producing major gear, including General Dynamics Land Systems-Canada, CAE Inc., MDA Space, Bell Textron Canada, Bombardier, Irving Shipbuilding, Seaspan Shipyards, L3Harris Wescam, Lockheed Martin Canada, IMP Aerospace & Defence, and Roshel. Many are U.S. subsidiaries or supply components for American products, fueling debate on evolving beyond a “branch plant” model to drive economic growth.
Global Models: South Korea and Sweden
South Korea exemplifies defense procurement as an industrial powerhouse via its Defense Acquisition Program Administration (DAPA). This body manages requirements, development, exports, and growth. Secretary of State for Defence Procurement Stephen Fuhr noted DAPA’s sophistication surpasses Canada’s current setup.
Major contractors like Hanwha and Korea Aerospace Industries thrive under state-guided policies. Defence Procurement Minister Seok Jong Gun highlighted efficiency: “When the military decides to acquire it, we do it. The decision-making process is very fast.” This model proves exports through domestic needs, including advanced submarines competing globally.
Sweden pursues a hybrid approach with publicly traded Saab leading. The Swedish Defence Materiel Administration (FMV) collaborates on planning, while strict export controls via the Inspectorate of Strategic Products shape the sector without direct ownership.
These examples offer Canada pathways to leverage defense spending for sovereignty, readiness, and economic revival.
