Hegseth, Pistorius Advance U.S.-Germany Defense Industrial Cooperation Under NATO 3.0

U.S. and Germany Deepen Defense Industrial Cooperation

The United States and Germany are moving to deepen U.S. Germany defense cooperation by aligning defense acquisition policies and expanding opportunities for joint development, production and sustainment. U.S. Secretary of War Pete Hegseth and German Defense Minister Boris Pistorius signed the agreement during a Sept. 15 meeting at the Pentagon.

The agreement comes as NATO implements the defense investment commitments reached at the 2025 Hague Summit and as European allies take on greater responsibility for conventional defense in Europe.

Hegseth described the effort as part of his broader NATO 3.0 concept, which calls for greater European responsibility for the defense of Europe alongside stronger military production and readiness. NATO Secretary General Mark Rutte has also used the NATO 3.0 term to describe the Alliance’s evolving defense posture, including greater responsibility from European allies and Canada.

Agreement Links U.S. and German Procurement Efforts

The Pentagon said the agreement aligns the War Department’s acquisition transformation strategy with Germany’s Procurement Acceleration Act and its Security and Defense Industrial Strategy.

The practical areas identified by Hegseth include:

The significance of the agreement is less about a single weapons program than about the industrial mechanisms needed to support multiple programs.

For modern military forces, procurement speed is only one part of the problem. A weapon system also requires a reliable supply chain, production capacity, trained maintenance personnel, spare parts, software support and long-term sustainment.

The United States and Germany are therefore seeking to reduce some of the institutional barriers that can make multinational defense programs slower or more expensive to execute.

Germany’s own procurement reforms are designed to accelerate acquisition and make it easier for the Bundeswehr to fulfill military requirements. A German government economic report says the procurement legislation is intended to simplify and accelerate procurement, including through higher direct-contract thresholds for the German armed forces.

NATO’s 5% Defense Investment Framework

The industrial agreement fits into a larger NATO effort to increase defense investment.

At the June 2025 NATO Summit in The Hague, allies committed to investing 5% of GDP annually in defense and defense-related spending by 2035. The framework includes at least 3.5% for core defense requirements and up to 1.5% for defense and security-related areas such as critical infrastructure, resilience, innovation and the defense industrial base.

The commitment also explicitly calls for greater transatlantic defense industrial cooperation and the removal of barriers to defense trade between allies.

That distinction matters.

Higher defense budgets do not automatically produce additional military capability. Governments must translate additional funding into contracts, production lines, ammunition inventories, trained personnel, infrastructure and deployable equipment.

The industrial base therefore becomes a critical link between defense spending and actual military capacity.

NATO’s updated Defense Production Action Plan similarly focuses on expanding allied industrial capacity and improving the Alliance’s ability to deliver military capabilities at the scale required by its defense plans.

Germany’s Expanding Role in European Defense

Pistorius said Germany is seeking to assume greater responsibility for conventional deterrence in Europe while reducing the burden on the United States.

Germany has already increased its military role on NATO’s eastern flank. NATO says Berlin has established a permanent multinational armored brigade in Lithuania, while German aircraft and naval forces continue contributing to NATO deterrence and defense activities.

The German government is also expanding its military modernization program.

The Bundeswehr is preparing to introduce the F-35A as its fifth-generation combat aircraft. Germany is acquiring 35 F-35As, with the first aircraft scheduled for transfer to the Bundeswehr in September 2026.

The F-35 program is particularly relevant to transatlantic defense cooperation because the aircraft is already operated or being acquired by numerous NATO members.

Germany’s Bundeswehr describes the F-35A as a fifth-generation multirole aircraft combining reduced signatures, advanced sensors and networked information sharing.

The aircraft also illustrates how multinational procurement can create industrial and operational connections that extend beyond the original purchase.

Why Defense Industrial Capacity Matters

The immediate objective of the U.S.-German agreement is increased industrial cooperation, but the broader issue is production capacity.

Recent NATO planning has placed greater emphasis on air and missile defense, long-range weapons, logistics, land forces and other capabilities that require sustained industrial output. NATO has said its updated capability targets require allies to invest in these areas while expanding defense production.

For the United States, greater European production could help increase the number of available suppliers and manufacturing locations within the broader NATO industrial base.

For Germany, closer access to U.S. programs and production networks could support faster acquisition of advanced systems while providing opportunities for German industry to participate in multinational supply chains.

The challenge is that industrial integration involves more than signing an agreement.

Different countries maintain separate procurement rules, export-control regimes, technical standards, intellectual-property arrangements and security requirements. Aligning these systems can take considerable time even when governments agree on the strategic objective.

The new U.S.-German agreement establishes a framework for cooperation, but the Pentagon announcement did not identify specific new weapon contracts, production quantities or program timelines resulting from the agreement.

That distinction is important when assessing what has actually changed.

A Shift From Spending Toward Production

The meeting also reflects a broader change in NATO’s defense debate.

For years, defense burden sharing was heavily discussed in terms of national spending levels. The current NATO framework places greater emphasis on what those investments produce: military capabilities, industrial capacity, readiness and resilience.

NATO’s 2025 summit declaration specifically linked the 5% investment commitment with the need to rapidly expand transatlantic defense industrial cooperation.

Hegseth’s comments at the Pentagon follow that approach. He argued that increased defense spending is only the first step and that Germany’s industrial base needs to contribute to the Alliance’s broader defense requirements.

For the United States, this could mean a greater emphasis on allied production capacity as Washington seeks a different division of defense responsibilities within NATO.

For Germany, it creates pressure to turn increased spending into measurable military output, including weapons, platforms, ammunition, logistics and sustainment capacity.

Implications for U.S.-European Defense Programs

The agreement could become relevant to a wide range of future U.S.-German defense programs, although the Pentagon has not tied the statement of intent to any specific system.

Three areas stand out.

First, production. Greater alignment could make it easier for U.S. and German companies to participate in common manufacturing programs.

Second, sustainment. Expanded maintenance capacity could allow equipment deployed in Europe to receive more support from regional industrial networks rather than relying exclusively on production and maintenance infrastructure in the United States.

Third, technology development. Joint development could create opportunities for the two countries to share portions of research, engineering and industrial work on future capabilities.

The effect will depend on how quickly the policy alignment translates into actual contracts and industrial decisions.

Germany’s Defense Role Within NATO 3.0

The Pentagon meeting comes shortly after NATO Secretary General Mark Rutte highlighted Germany’s role in the Alliance’s evolving defense structure.

Speaking in Berlin on Sept. 10, Rutte described Germany as a leading participant in NATO 3.0 and pointed to its contributions to NATO’s eastern flank, including the permanent armored brigade in Lithuania and the German-Netherlands Corps. He also highlighted Germany’s defense industry and its expanding production activity.

The U.S.-German agreement therefore fits into an Alliance-wide effort rather than standing alone as a bilateral initiative.

The central question is how quickly increased spending, procurement reform and industrial cooperation can translate into additional deployable capability.

For Washington, closer German participation could support the broader objective of increasing European responsibility for conventional defense.

For Berlin, closer industrial integration with the United States provides another mechanism for expanding military production and accessing advanced capabilities while strengthening Germany’s role within NATO.

The Sept. 15 agreement does not by itself establish new production quantities or fielding schedules. Its significance is that Washington and Berlin are attempting to align the rules and industrial structures that govern how future defense capabilities are developed, manufactured and sustained.

That makes the implementation of the agreement, rather than the signing itself, the key issue to watch.