While Trump rattles the markets, investors earn a tidy profit from Europe's defense | Military

As the tariffs of the United States President Donald Trump and his change in Ukraine's policy in Washington send trembling through global stock markets, European defense companies fly high as investors are relying on the continent, taking responsibility for their own defense.

With Trump's work towards Russia and stopping him for military assistance for Ukraine, which raises doubts about the US's security for Europe's security, European leaders are competing to increase defense costs.

After accumulating double-digit profits this week, the shares of the best European defense companies are moving over all time, as investors are looking to profit from Trump's “America First” shaking in the international order.

The German Rheinmetall and Hensoldt, which increased by 9 percent on Wednesday, are over 90 percent and 100 percent respectively from the beginning of the year.

Italy Leonardo and France of Thales have earned more than 70 percent, while the United Kingdom BAE systems are about 40 percent.

In contrast, the Benchmark S&P 500, which traces the performance of 500 of the largest American companies, has dropped nearly 5 percent in the last month and is 1.5 percent compared to the beginning of 2025.

“In response to Trump and (Russian President Vladimir) Putin, Europe will significantly increase its defense costs. This is very positive for his defense companies, “said Holger Schmiding, Chief Economist at Berenberg Bank, in front of Al Jazeera.

“Their long -term prospects are bright. They will also find easier attraction to talent. “

Declaring that Europe has entered the Era of Rearmament, European Commission President Ursula von der Leyen has announced plans to mobilize up to 800 billion euros ($ 854 billion) in new defense spending over four years.

Von der Leyen said that € 650 billion ($ 694 billion) of the cost can be reached by Member States that raise their defense budgets by 1.5 percent of gross domestic product (GDP) – almost doubling current costs.

NATO military planners have worked on the assumption that if Russia attacks Europe, the US will quickly increase its 100,000 soldiers located on the continent of 300,000. However, the Trump administration has made it clear that it wants Europe to lead its defense – calling into question how much they can support Europe in such a scenario.

Brussels -based brain Trust, Brugel, estimated that if Europe had no security umbrella in the United States under NATO, it would have to collect additional combat force of 300,000 soldiers to repel the Russian attack on a European country. European NATO members have Combined two million soldiers with active duty right now.

Although it has increased by nearly one -third of 2021 to 2024, the combined defense costs of the European Union are far behind the United States and not only reach NATO for costs equal to 2 percent of GDP.

EU -related military spending in 2024 reached 326 billion euros ($ 348 billion) or about 1.9 percent of the combined GDP, according to the European Defense Agency.

NATO Secretary General Mark Rute said that alliance members, which includes all except four EU countries, as well as the US, Canada and the United Kingdom, will have to raise defense budgets to “significantly more” than 3 percent of GDP.

Trump, who has repeatedly accused Europe of free loading of security guarantees in the United States, urges NATO members to spend 5 percent of GDP.

“We are planning to reach the costs of Europe's defense to reach 3.1 percent of GDP by 2029 and will increase up to 3.5 percent by 2032,” said Lorvenana Fly, Analyzer of Morningstar, in front of Al Jazeera.

“If Europe reaches 3.5 percent of GDP by 2032, it will become an average of an additional $ 300 billion a year, which will be an increase of 70 percent of 2024 levels.”

Most of these increased costs must be beneficial to European defense contractors through “increased domestic order and consolidation of the industry,” Muharemi said.

Muharem said that the European defense sector also took advantage of more economies of scale.

“Currently, Europe is importing 26 percent of its defense equipment, with 60 percent of these imports coming from the United States. Although we do not expect Europe to suspend US orders-the pretext of the immediate need for shelves and long-term technological synergies-we pretend a significant transition to domestic orders, “she said.

Europe from the defense industry generated a turnover of 158.8 billion euros ($ 169.5 billion) in 2023, which is about 17 percent compared to the previous year, according to the Aerospace, Security and Defense Industry Association.

However, the continent's defense sector has long been lagging behind its American counterpart in business. US companies took seven seats on the list of 10 defense contractors with the greatest degree in 2024, including the top five.

According to a 2021 report by Strategy &, a unit of PricewaterhouseCoopers, US defense companies have increased their revenue from $ 20 percent to $ 277 billion from 2014 to 2019, while European companies revenue for about $ 100.4 billion.

“So far, the European Defense Industry has been lacking a scale of their colleagues in the United States and is characterized by a high level of fragmentation regarding a variety of weapons systems,” says Tobias Mueller, a strategy defense expert &.

“In the future, they need to stimulate consolidation of the industry, increase efficiency and efficiency, invest in innovative defense technologies and improve the sustainability of the supply chain and invest in public-private partnerships.”

Müller said Trump's ambivalent attitude towards Europe's security could be a golden opportunity to equalize the European defense sector.

“This is the” last call “for Europe to invest in more defensive opportunities,” he said.