Defence industry German Production Is Intended to Meet Increased NATO Demand

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U.S. Secretary of Defence Pete Hegseth is full of praise for Germany's approach to NATO. During Pistorius's visit, the two sides agreed to deepen their cooperation in the production of weapons and ammunition.

U.S. Secretary of Defence Pete Hegseth has praised Germany for its pioneering role in strengthening NATO in Europe. During a meeting with his German counterpart, Boris Pistorius (SPD), at the Pentagon, he spoke of “significant progress that probably no one would have thought possible before President Donald Trump returned to office.”

The two ministers also signed a defence agreement aimed at meeting the NATO alliance’s enormous need for weapons, ammunition, and equipment—increasingly from German sources.

According to Hegseth, the memorandum of understanding expands opportunities for joint development, production, and licensed manufacturing. Maintenance and repair capabilities are also to be expanded—“exactly what allied nations should be doing,” he said. The goal is clear: “to rapidly provide high-performance systems on a large scale to American, German, and allied armed forces in order to achieve maximum combat effectiveness.”

Defence spending is only the first step

Germany is getting closer to meeting NATO’s 5 percent defence spending commitment “and is setting a good example in the process,” said Hegseth, whose official title is Minister of War. He added: “But as we’ve already discussed, defence spending is only the first step. A NATO 3.0 therefore also requires that Germany’s very large and time-honored industrial base be utilised for collective defence.”

Pistorius last visited Hegseth in Washington in the summer of 2025. Last year, there was still a great deal of criticism from Washington directed at the German government. A lot has happened since then. For example, Germany has significantly increased its defence spending and expanded its leadership role in providing military aid to Ukraine.

At the same time, the U.S. is facing the limits of its military power in the war against Iran, which it launched together with Israel. The Iranian leaders appear to be firmly in control, remain ready to strike back at any moment, and are exerting pressure on global trade in goods and oil in the Strait of Hormuz with a kind of stranglehold.

There are opportunities for German industry

U.S.-made guided missiles for attack and air defense have become a scarce resource in this war. The European NATO allies and the Ukrainians are well aware of this.

This area now presents opportunities for German industry. “We offer expertise and capacity for joint production,” Pistorius said after the meeting with Hegseth.

He speaks of a whole range of invaluable benefits: “We’re replenishing our inventories, strengthening our capabilities, and, incidentally, those of our partners as well,” he said. And: “If capacity in the U.S. isn’t sufficient—and given the high demand figures, that’s definitely the case in some areas—we’ve offered to manufacture in Germany. That’s been very well received.”

Cooperation should not remain a one-way street

Germany's primary interest in defence cooperation is gaining access to technologies and systems that are not—or not yet—manufactured in Europe, including guided missiles and air defence systems such as the Patriot.

However, the expansion of this cooperation should not remain a one-way street. For example, Rheinmetall is competing with its Lynx infantry fighting vehicle in the bid for the U.S. Army’s future infantry fighting vehicle. The contract involves a bid to supply more than 4,000 armored vehicles.

With approximately 38,000 soldiers currently stationed there, Germany is the most important U.S. base in Europe. Major military facilities include Ramstein Air Base, the Grafenwöhr and Hohenfels military training areas, the Landstuhl Military Hospital, and regional headquarters in Stuttgart and Wiesbaden. The U.S. uses these bases for military operations in the Near and Middle East as well as in Africa.