Photograph Source: Estonian Foreign Ministry – CC BY 2.0

The agreement by NATO members to raise defense spending to 5 percent of GDP by 2035 has been welcomed across Western capitals as a moment of strategic clarity. After years of uneven commitments and familiar handwringing, the alliance finally appears ready to shoulder more responsibility in a world that feels less secure by the day. The decision may strengthen deterrence in the short term, yet it also contains the seeds of a structural imbalance that could reshape transatlantic relations in ways Europeans have not fully reckoned with.

At first glance, a pledge to spend more on defense looks like an overdue response to Russian aggression, an acknowledgment that Europe must rebuild its own capabilities and reduce its dependence on Washington. The political symbolism is powerful. Leaders who once hesitated to discuss even 2 percent of GDP now support dramatic increases. The narrative of European awakening is enticing. Yet it draws attention away from a deeper question: who actually gains from this sudden surge of spending.

Europe has the political will to spend more, but it does not have the industrial capacity to match its ambitions. Years of neglect hollowed out domestic weapons manufacturing and investment stalled in key areas of research, development, and production. The result is a continent that may be prepared to buy more weapons, but not one that can easily build them at scale. That reality points to an uncomfortable conclusion. A significant share of Europe’s new defense budgets will flow not to European producers but to American defense manufacturers........

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