Overview
- European governments are lifting defense budgets, with Spain announcing €10.471 billion and signing major contracts for missiles, vehicles and artillery as NATO pressure intensifies.
- Large orders continue to flow to foreign suppliers, including more than 650 F‑35s for European buyers and Germany’s recent €50 billion plan featuring Arrow 3 missiles, while the Franco‑German fighter program faces renewed delays.
- Transatlantic friction persists over EU digital regulation as Washington threatens new tariffs and has reportedly used visa denials tied to the legislation targeting U.S. tech firms.
- China’s reported $1 trillion 2025 trade surplus underscores surging exports into Europe and Beijing’s continued support for Russia, deepening EU competitiveness and geopolitical headaches.
- Analysts forecast U.S. growth in 2026 powered by AI investment with warnings about inequality and a potential tech bubble, while Europe confronts welfare-versus-defense trade‑offs and a busy electoral calendar that could redirect policy.