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In a document sent to EU legislators and seen by Euronews, the US has threatened the EU with retaliation if it does not scrap European preference provisions in its multiannual budget.
EU member states are currently discussing the EU’s long-term budget (2028-2034), which includes a €402 billion fund dedicated to competitiveness that favours the production of key goods within the EU, including in defence.
The measure would potentially exclude foreign firms from EU financing to protect strategic and economic security interests.
“With further expansion of European preference measures in EU defence funds, the United States will review all potential response measures, including a rollback of the existing ‘Buy American’ blanket waivers and exceptions associated with the RDPAs [Reciprocal Defence Procurement Agreements] with 19 of the 27 member states,” the non-paper reads.
The Buy American Act requires the US government, including the US Department of Defence, to give preference to products manufactured in the US for certain public procurements, with some exceptions being granted in defence for some EU countries.
The non-paper adds that the European preference would impede “partnership” and “collaboration” with the US, and calls on the EU to introduce a “made with Europe” system – or, in the specific area of defence, a “made in NATO”.
Trade tensions
The US’s latest warning comes after the creation of the Security Action for Europe programme in 2025, already sparked trade tensions between Washington and Brussels over a European preference for joint purchases of arms and military equipment.
The “made in Europe” approach is also pushed by France and the European Commission in several pieces of legislation over the last year designed to boost EU industry, with foreign countries lobbying hard against being excluded from the EU market.
The US and EU have been at loggerheads over trade since the start of the second Trump administration, amid repeated tariff threats and disputes over environmental and digital regulations which the White House deems to be non-tariff barriers.
The Commission hoped that the conclusion of a trade agreement in July 2025 would be a step towards a more stable transatlantic relationship.