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US in talks on Europe missile co-production, source says - Finance news and analysis from Global Banking & Finance Review
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US in talks on Europe missile co-production, source says

Published by Global Banking & Finance Review

Posted on July 7, 2026

3 min read

· Last updated: July 7, 2026

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US plans PAC-3 missile maintenance facility in Europe

US Missile Maintenance and Production Expansion in Europe

By Sabine Siebold

ANKARA, July 7 (Reuters) - The United States will establish a maintenance facility for Lockheed Martin's advanced PAC-3 air defence missile in Europe, a senior official said on Tuesday, adding Washington was not ruling out production of the missile abroad.

Details of the Maintenance Facility

Speaking to reporters at a defence industry gathering on the sidelines of the NATO summit in Ankara, U.S. Undersecretary of Defense Michael Duffey said it was not yet clear in which country the maintenance plant would be built.

Germany, the Netherlands, Poland and Sweden are partners in the project together with U.S. defence giant Lockheed, which builds the PAC-3 missiles for the Patriot air defence systems — weapons in scarce supply and highly coveted by Ukraine.

Duffey said the move was meant to increase the availability of the missile, reduce repair timelines and strengthen operational readiness across the alliance.

Potential for International Production

"We leave open the opportunity for production beyond the U.S. borders, absolutely," he said, responding to a question on whether he could envision the PAC-3 being manufactured outside the U.S.

AMRAAM AIM-120 Co-Production and European Missile Initiatives

PAC-3 and PAC-2 Missile Maintenance and Production

PAC-3 missiles have to undergo maintenance regularly.

In 2024, Germany, the Netherlands and Spain laid the foundation for the first Patriot production plant in Europe by signing a €5.1 billion ($5.98 billion) contract to purchase up to 1,000 less advanced PAC-2 missiles.

The missiles will be manufactured at a new facility of European missile maker MBDA in southern Germany, doubling the global production capacity for PAC-2 missiles, which are enhanced for the interception of tactical ballistic missiles.

The production is scheduled to start at the end of 2026, with first deliveries at the beginning of 2027. MBDA is providing the maintenance services for the PAC-2 missile.

AMRAAM AIM-120 Co-Production Efforts

The U.S. has also moved a step closer to establishing co-production of Raytheon's AIM-120 AMRAAM missiles in Europe, an initiative that involves Belgium, Canada, Finland, Germany, the Netherlands, Norway and Britain.

It is unclear in which European country an AMRAAM plant might be established and when a deal might be struck.

US and European Defense Industry Implications

Impact on US Production Capacity

If implemented, both projects could free up capacity at Raytheon and Lockheed Martin factories in the United States and enable the U.S. defence giants to ramp up production at home.

Missile Demand in Ukraine

Both PAC-3 missiles and AIM-120C-8 missiles, launched by NASAMS air defence systems as well as by F-16 fighter jets, are in high demand in Ukraine where Kyiv has been fighting off Russian attacks since Moscow's full-scale invasion in 2022.

Political Context: Trump's Push for Higher European Defence Spending

U.S. President Donald Trump has repeatedly criticised European allies for relying on the U.S. for their security, while pressing them to boost defence spending and buy more U.S. equipment. He has also threatened at times to pull Washington out of NATO.

Defense Production Act and US Arms Supply Concerns

In mid-June, Trump invoked the Defense Production Act to ​address constraints in weapons supply and development ‌for munitions production and supply chains.

The move followed growing ​concern in Washington about the capacity of ​U.S. weapons manufacturers to meet demand, as both the war against Iran and the war in Ukraine have depleted U.S. arms stocks. 

(Reporting by Sabine SieboldEditing by Linda Pasquini, Aidan Lewis)

Key Takeaways

  • Co-production of AIM‑120 AMRAAM and PAC‑3 missile maintenance in Europe could alleviate U.S. domestic manufacturing constraints.
  • High demand for these systems stems from ongoing Ukraine defense needs amid Russia’s 2022 invasion.
  • President Trump has invoked the Defense Production Act on June 11, 2026, to address bottlenecks in U.S. munitions supply chains.
  • European defense spending has surged—NATO allies plan to reveal arms deals worth tens of billions at Ankara forum ahead of summit.

Frequently Asked Questions

What are the US and European nations discussing regarding missile production?
They are in talks to establish co-production of Raytheon's AIM-120 AMRAAM missiles and a maintenance facility for Lockheed's PAC-3 Patriot missiles in Europe.
Why is missile co-production being considered between the US and Europe?
Co-production could free up US factory capacity for Raytheon and Lockheed, allowing defense companies to increase production amid rising demand.
Which missiles are expected to be part of the US-Europe co-production plan?
The plan includes Raytheon's AIM-120 AMRAAM and Lockheed's PAC-3 Patriot missiles.
How is the war in Ukraine related to these missile production talks?
Both PAC-3 and AIM-120C-8 missiles are in high demand in Ukraine, where they are used in air defense against Russian attacks.
When will a statement of intent be signed for the missile projects?
A statement of intent is expected to be signed at a NATO Industry Forum during the Ankara summit.

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