Fresh off the assembly line, the two Eurofighter jets screamed down Turin’s runway at 186 miles per hour before lifting off against the snow-capped Alps. Their destination was Kuwait, a six-hour flight away.
The Kuwaiti military is the first foreign customer to buy the supersonic jets from Leonardo, the Italian defense contractor that manufactures the Eurofighter as part of a consortium with producers in Britain, Germany and Spain. More such deals are likely, as Europe looks inward to build its defenses amid President Trump’s trade war and his demands that Europe stop relying on the United States for its security.
Demand for weapons spiked in Europe after Russia invaded Ukraine in 2022 and has persisted. With Europe producing more and better weapons, it is also looking to sell its wares more broadly on the global market.
The new emphasis on arms production is evidence of a broader generational shift in Europe, which wound down its militaries after the Cold War in favor of social investments.
Giancarlo Mezzanatto, a top Leonardo official who was the Eurofighter consortium’s chief executive until December, is betting that the administration’s antagonism toward Europe will encourage more militaries to buy European weapons. Already, both Poland and Turkey are weighing multibillion-dollar deals for the Eurofighter, known as the “Typhoon,” instead of expanding their fleets of American-made jets.
“It is a matter of how successful the products are, and of how the technologies are helping the products to be successful in the market,” Mr. Mezzanatto said in a recent interview in Turin, describing a “renaissance” for the Eurofighters with a new mid-generation upgrade that will maintain its edge until 2060.
“Then, of course, there are the geopolitical situations, which are clearly influenced by Trump,” he added.
Even before Mr. Trump invoked punishing global tariffs this month, Europe’s defense stocks were flying high, in part because institutional investors that had long disregarded them are reconsidering their stances.
The Stoxx Europe Total Market Aerospace & Defense, an index of top defense contractors including Leonardo, Rheinmetall, and BAE Systems, has soared roughly 24 percent this year while the S&P 500 is down more than 10 percent.
Mr. Trump’s tariffs blitz has shaken investors’ confidence just about everywhere, but analysts see the defense sector as secure, especially given the political pressure to rearm Europe. In March, the European Commission announced a broad proposal to ramp up defense spending by about $840 billion, including $165 billion in loans. The European Investment Bank also said it planned to at least double its funding for security and defense projects, and expand its financing to military equipment.
That has caught the attention of institutional investors, including Norway’s Government Pension Fund Global, the world’s largest sovereign wealth fund. Such funds have long stayed clear of arms makers but are rethinking those restrictions.
“What really has provoked the turnaround in opinion, I think, is the Trump administration’s obvious reluctance to support Europe in defense,” said Stephen M. Davis, a senior fellow at the Harvard Law School Program on Corporate Governance. “When public opinion changes, the investor community is likely to change, too.”
The shift represents a major change in how many investors have approached the defense industry in Europe. Governments there drastically cut their militaries when the Cold War ended in 1991 and began pumping money into pensions, health care, education, environmental programs and other economic priorities deemed more important than building weapons.
For decades, many European pension funds prohibited direct investments in arms manufacturers that produce weapons like cluster bombs, chemical, nuclear and biological weapons, and mines. After Russia’s full-scale invasion of Ukraine, NATO implored governments, banks and private funds to invest in the defense industry and help speed up arms production and keep the war from spreading deeper into Europe.
“It’s always nicer to invest in health and infrastructure and education,” Jens Stoltenberg, then NATO’s secretary general, said in December 2022. But, he said, “the reality is that the only way to sustain peace is to invest in defense.”
Varma, a Finnish pension fund, was one that relaxed its rules a few months after the Russian invasion, and before Finland joined NATO in 2023. Under some conditions, Varma can now consider investing in such a manufacturer if, for example, the controversial weapons such as cluster bombs account for no more than 5 percent of sales.
“There are no restrictions regarding conventional weapons, as long as the products are primarily used to defend sovereignty and prevent conflict,” added Hanna Kaskela, Varma’s senior vice president for sustainability and communications.
AkademikerPension in Denmark is also rethinking its arms investing rules — but it may be more because of Mr. Trump than Russia. The 65-year-old pension fund, which counts many of the country’s current and retired academics as clients, has been a big investor in companies with strong climate and human-rights credentials.
Lately, its members have grown more hawkish in their investment focus.
“In February, everything changed,” recalled Jens Munch Holst, the chief executive of AkademikerPension, which has roughly $24 billion worth of assets under management. Mr. Trump’s threat to expropriate Greenland, a semiautonomous territory of Denmark, was “shocking news for the Danes.”
For some investors, that was the moment national defense overtook climate change as the new top threat.
But in addition to money, Europe will need political will to bolster its defenses.
Most of the major weapons producers in Europe are partially state-owned, and each government has its own spending priorities, regulations and defense strategies. That has created inefficiencies among national manufacturers that each produce relatively small amounts of weapons, resulting in relatively high costs.
The price of a self-propelled 155-millimeter artillery howitzer built in Europe, for example, can range between $6 million and $19 million, according to the Bruegel Institute, an economic think tank in Brussels, while one built in the United States is less than $2 million. Analysts are watching to see whether Mr. Trump’s tariffs drive up costs for steel, copper and other metals key to the construction of military hardware.
“The fragmentation of the European defense market has meant that money is spent very inefficiently,” researchers at the Royal United Services Institute, an analytical group affiliated with the British military, concluded in a study this month.
The four-nation consortium that builds the Eurofighter jet sought to pool its resources instead of competing when it was created in the 1980s. The jet now flies in nine countries, including four in the Middle East. While Kuwait was the first to buy the warplane from Leonardo, other nations purchased it directly from the other companies in the consortium.
Named for the Italian inventor Leonardo da Vinci, Leonardo is also developing a next-generation fighter jet, the Global Combat Air Program, with producers in Britain and Japan; it is expected to enter military service in 2035.
Its technology is expected to rival, if not surpass, that of the American-made F-35 stealth jet, which flies in 20 countries and is broadly considered the most advanced fighter jet on the global market. But while the United States has strict restrictions on some of the F-35’s highly classified capabilities, the GCAP, as it is known, will give its customers more control over its systems.
With uncertainty swirling over Mr. Trump’s trade policies, some Europeans are now openly debating the value of the F-35, which Lockheed Martin produces.
“If we need the F-35, then we need to invest in the American defense industry, which I understand a lot of people are going to have issues with at a time in which we’re at a commercial war with the United States,” Thibault Muzergues, a researcher with the Institute of International Affairs in Rome, said at a NATO-sponsored conference this month.
The Italian Air Force flies both Eurofighters and F-35s, and Leonardo builds parts for both. But while Leonardo is restricted to manufacturing wings and other hardware for the F-35, the company is deeply involved in developing the technology for the Eurofighter.
Two years ago, when chief executive Roberto Cingolani took over Leonardo, he focused the company on high-tech advances and brokering joint ventures with other European weapons producers, including with the German defense giant Rheinmetall to build tanks and with the Turkish drone-maker Baykar.
He believes that is what caught the attention of investors who were reconsidering Europe’s defense industry after Mr. Trump took office.
“Europe has, all of a sudden,” Mr. Cingolani said, “realized that we have to change.”
Lara Jakes, based in Rome, reports on diplomatic and military efforts by the West to support Ukraine in its war with Russia. She has been a journalist for nearly 30 years.
Bernhard Warner is a senior editor for DealBook, a newsletter from The Times, covering business trends, the economy and the markets.
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