US threatens EU with retaliation over "Made in Europe" clause

In a letter to MEPs, a copy of which is in Euronews’ possession, the US is threatening the EU with retaliatory measures if Brussels does not remove the clauses giving preference to European suppliers from the multiannual budget.

The EU Member States are currently discussing the long-term EU budget for the years 2028 to 2034. It provides for a fund of 402 billion euros to boost competitiveness, which favours the production of key goods within the EU, including in the defence sector.

The provision could exclude foreign companies from EU funding in order to protect strategic and economic security interests.

“Should the EU further expand its preferential arrangements in defence funds, the United States will consider all possible responses,” the non-paper states. “This includes withdrawing existing general exemptions from the ‘Buy American Act’ as well as special provisions under the RDPAs (Reciprocal Defence Procurement Agreements) with 19 of the 27 Member States.”

The Buy American Act obliges the US government, including the Department of Defence, to give preference to domestically produced goods in certain public procurement contracts. Exemptions have so far applied to some EU Member States in the defence sector.

The document also warns that a European preference would complicate ‘partnership’ and ‘cooperation’ with the US. It calls on the EU to introduce a "made with Europe" scheme or, in the defence sector, a "made in NATO" label.

Trade tensions between the EU and the US

The latest warning from the US follows the launch of the ‘Security Action for Europe’ programme in 2025. It has already triggered trade tensions between Washington and Brussels, as European suppliers are to be given preference in joint procurement of weapons and military equipment.

France and the European Commission are also pushing ahead with the ‘Made in Europe’ approach. This focus is enshrined in several legislative proposals from last year aimed at strengthening European industry. However, third countries are putting massive pressure on Brussels to ensure they are not excluded from the EU market.

Since the start of Donald Trump’s second term in office, the US and the EU have been at loggerheads over trade. Time and again, Washington has threatened to impose new tariffs and criticised the EU’s environmental and digital regulations, which the White House classifies as non-tariff trade barriers.

The European Commission had hoped that the conclusion of a trade agreement in July 2025 would mark a step towards a more stable transatlantic partnership

Francis Tawiah (Duisburg, Germany)