Key insights
- The US is reportedly reducing its military contributions to NATO, including fighter jets and warships. This move, driven by concerns over European defense spending and geopolitical priorities, introduces uncertainty and could increase geopolitical risk, potentially weighing on market sentiment. The full impact will depend on the details revealed in June and the reactions of European allies.
Investing.com -- The United States plans to significantly reduce military contributions available to assist European allies during a crisis, including fighter jets, warships and mid-air refueling aircraft, German news outlet Spiegel reported on Tuesday.
An envoy of U.S. Defense Secretary Pete Hegseth already briefed senior officials from member states on the plan at NATO headquarters in Brussels late last week, according to the report.
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The number of U.S. fighter jets is set to fall by one third, Spiegel cited U.S. envoy Alexander Velez-Green as saying during the closed-door meeting. The U.S. aims to provide only half the previous number of strategic bombers.
The U.S. Navy is also set to make fewer destroyers available to NATO, and the U.S. no longer intends to provide any submarines to the alliance, the reports said.
Under the changes, Europe would be forced to provide its own reconnaissance drones, while the U.S. plans to significantly scale back the provision of armed models.
Separately, Reuters reported that the Trump administration was planning to tell NATO allies last week it would shrink the pool of military capabilities available to the alliance during a crisis.
President Donald Trump has long criticized European allies for not spending enough on their militaries as well as their unwillingness to get invoved in the U.S.-Israel war with Iran. Trump pledged to withdraw thousands of troops from Germany and questioned whether Washington was bound to honor its mutual defense pact.
The U.S. will provide further details at a force generation conference in early June, the Spiegel report added.