NATO as a Geoeconomic Platform – and the Industrial Paradox
The crisis of spring 2026 also shows that NATO 3.0 cannot be understood solely as a question of force posture. As Colby’s thinking has evolved – in his public interventions, in the 2026 NDS and in organisational reforms inside the Pentagon – a broader transformation has become visible in which the Alliance effectively becomes a platform for coordinating industrial supply chains, technological dependencies and critical flows of energy and raw materials.
A concrete expression of this is the realignment inside the Department of War, where the Defence Security Cooperation Agency (DSCA) and Defence Technology Security Administration (DTSA) have been placed under the Office of the Under Secretary for Acquisition and Sustainment. Foreign and security policy, export control, technology transfer and industrial policy are braided together in a structure that is supposed simultaneously to protect sensitive US technology, accelerate arms deliveries to allies and strengthen the domestic defence industrial base. On the NATO side, the Hague commitment of 5 per cent of GDP by 2035 – with at least 3.5 per cent for “core defence” and up to 1.5 per cent for infrastructure, innovation, resilience and defence industry – was institutionalised as a central building block of a new deterrence and industrial logic.
In theory, this points towards a transatlantic division of labour in which Europe’s higher spending finances not only more brigades and air and missile defence systems, but also a more robust and integrated defence industrial base on both sides of the Atlantic. In practice, NATO 3.0 has already generated friction. In February 2026, the Department of War and State Department submitted formal comments to the European Commission in which they “strongly oppose” legislative proposals that would limit third‑country firms’ access to European defence procurement. The warning was explicit: if the EU goes ahead with far‑reaching “Buy European” clauses, the United States is likely to review existing blanket waivers from Buy American legislation under the Reciprocal Defense Procurement Agreements currently enjoyed by 19 EU states.
This is where the industrial paradox – often overlooked in public debate – comes into focus. On the one hand, Washington insists that European allies must build up their own conventional mass and a more self‑reliant industrial base – a demand reinforced by the fact that Russian output of ammunition and armoured vehicles now outpaces NATO’s combined production in several key categories. On the other, the same Washington resists precisely those procurement tools – content requirements, targeted support for production capacity, preferences for EU‑based suppliers – that are usually prerequisites for such capacity‑building.
The SAFE regulation, with 150 billion euros in joint procurement by 2030 and a requirement for 65 per cent European content, is the clearest attempt so far to deploy those tools at EU level. The Hague decision to allow up to 1.5 per cent of GDP to count as security‑related investment in infrastructure, innovation and the defence industrial base is another. But if each step towards European industrial consolidation is met by threats to revoke US procurement waivers, NATO 3.0 risks becoming a model in which Europe is asked to spend more – but continues to buy the bulk of the most sophisticated systems from the United States.
On top of this sits a geo‑economic vulnerability that Colby’s denial‑strategy has so far only partially addressed: dependence on critical raw materials, especially rare earths, where the EU is almost entirely reliant on Chinese processing and where even the United States’ only operational rare‑earth mine in practice sends its ore to China for refinement. Beijing’s tightened export controls in autumn 2025, particularly on components with clear military end‑use, already function as a kind of silent deterrent – with the potential to shut down production lines for precision munitions, sensors, aircraft and vehicles within months if supplies are cut off. The Hague decision to allow allies to count up to 1.5 per cent of GDP as security‑related investment precisely in infrastructure, supply chains and critical materials is a late but necessary acknowledgement of this problem.
Taken together, NATO 3.0 currently rests on four interdependent – but partly contradictory – logics:
- a military logic that seeks to shift conventional weight to Europe without creating a dangerous deterrence gap;
- a political logic in which US leaders oscillate between assurances of continued engagement and threats of diluted solidarity;
- an industrial logic that demands European rearmament but tightens the very instruments needed to build a genuine European capacity base; and
- a geo‑economic logic in which critical flows – energy, raw materials, technology – are becoming integrated parts of the deterrence architecture, but are still handled in a fragmented way.
If NATO 3.0 is to be sustainable, these four logics will need to be brought closer into alignment. Otherwise, the intended “division of labour” risks in practice creating new asymmetries – and new vulnerabilities – at the very moment when Europe is supposed to become more self‑reliant militarily and industrially.
Sailing together – under time pressure
Security policy is not a sport, but the image of sailing in teams still helps. In fleet racing, the best crews see the whole course, not just the nearest boat; they read wind shifts early and know when to tack – when to change heading entirely. In team racing, they also distribute risk, cover for one another and adjust together when the conditions change. Alliances are similar: they depend not only on individual hulls and sails, but on shared situational awareness, timely consultation and a readiness to redistribute risk across the “fleet” when the weather turns.
For NATO 3.0, that shared awareness now has a very specific temporal dimension. Most estimates suggest that Russia will be able to reconstitute significant offensive land power within roughly three to eight years, while full implementation of the Hague pledge and EU programmes such as SAFE and ReArm Europe will take at least a decade. In other words, there is a real danger of a transitional deterrence gap: a window in which Moscow has rebuilt much of its conventional capability, but Europe has not yet translated higher budgets into deployable forces, stocks and enablers.
Seen from that angle, the “tests” of NATO 3.0 become more concrete. The first test is whether European allies can turn the 5 per cent commitment into real, near‑term capabilities – additional brigades, deep ammunition magazines, hardened infrastructure, integrated air and missile defence and resilient supply chains – fast enough to shift the conventional balance before the 2029 review, rather than after it. This is less about budget lines in 2035 than about procurement decisions in the next two to three years, given average delivery times.
The second test concerns enablers and the nuclear link. US officials, including Colby, insist that the American nuclear umbrella remains the ultimate guarantee, even as they argue that Europe must take the lead in its own conventional defence. For frontline states this is credible only if it is underpinned by visible posture: US forces in key roles, clear command and control structures in Europe, and a demonstrated willingness in Washington to run risks on Europe’s behalf even while engaged elsewhere. A version of NATO 3.0 that leaves Europeans with more conventional mass but a thinner US forward profile risks increasing, not reducing, the danger of miscalculation.
The third test lies in the industrial realm. The NDS explicitly links allied burden‑sharing to a revitalised US defence industrial base, and NATO’s own investment language emphasises transatlantic industrial cooperation. At the same time, EU efforts to strengthen Europe’s defence‑industrial base and reduce third‑country dependence – from SAFE’s joint procurement to “Buy European” clauses – have already met with resistance in Washington. If NATO 3.0 is to be more than an exercise in cost‑shifting, it will have to square this circle: Europe must be able to build its own capacities without triggering a transatlantic trade war over defence contracts.
The fourth test, made brutally visible by Operation Epic Fury, is reciprocity. Trump’s argument that Europeans cannot both rely on the US security umbrella and withhold basing and overflight for US operations elsewhere has real political force, even if it sits awkwardly with NATO’s legal foundations. If European governments cannot articulate a common position that accepts the need for greater burden‑sharing while resisting a purely transactional conception of the Alliance, Article 5 credibility will erode regardless of what happens to defence spending levels.
None of these tests will be passed by rhetoric alone. They require detailed work on regional defence plans, national force structures, industrial policy and political signalling – all the unglamorous parts of alliance management that sit behind summit declarations. They also require a more honest conversation about time. For the next five to ten years, NATO will have to deter a Russia in military recovery, manage a United States whose attention is shifting, and build a far more robust European defence base – all at once, and all under the eyes of potential adversaries in Asia and the wider Eurasian space.
Total chaos on the racecourse serves no one. States willing to tear up the rules of the game often take extreme risks, but for powers that depend on predictability for their long‑term planning, a functioning rules‑based order, alliance cohesion and a realistic appreciation of threats from all directions are themselves force multipliers. Europe does indeed need to do more – that is both undeniable and overdue. But NATO 3.0 will only be sustainable if both sides of the Atlantic are candid about what “doing more” entails, clear about which capabilities and commitments are non‑negotiable, and willing to treat division of labour as a shared strategic design rather than a unilateral imposition. The events of 2025–26 have made that conversation not only more urgent, but more constrained – and they have reduced the margin for error.
Lars-Erik Lundin[1]
[1] original manuscript enhanced and reviewed by different AI-models