Buying More US Weapons Under NATO Budget Jump Will Help Fix Trade Rift With Trump, Says EU Council Chief

European Union Council President Antonio Costa said NATO’s decision to more than double its collective defense spending target has resolved what he described as the main trade-related friction between Europe and the U.S.

Broader equity markets were trending higher in pre-market trade on Friday after confirmation from Beijing that a framework for a US-China trade deal has been finalized, and on hopes that more deals, especially with India and the EU, may be announced soon. 

The SPDR S&P 500 Index ETF (SPY), the SPDR Dow Jones Industrial Average ETF (DIA), and the Invesco QQQ Trust Series 1 (QQQ), which tracks the tech-heavy Nasdaq-100, all climbed around 0.3% each.

In an interview with CNBC, Costa said the increase in defense budgets across NATO member states will likely include a significant uptick in purchases from American defense manufacturers, helping rebalance transatlantic trade.

“And of course, if we buy more American, that means then the trade relations rebalance,” Costa said. “That’s the reason — because I have said always that we cannot separate these two negotiations about defense — [that this] was the most important issue for the United States, and [it] is already solved.”

He echoed President Donald Trump’s sentiment that the military agreement between NATO allies and the U.S. is a “big win.”

Currently, U.S. trade partners are racing to finalize trade deals before Trump’s July 9 deadline for restarting tariffs. However, that deadline is “not critical” as per White House press secretary Karoline Levitt. On Thursday, she told reporters that any extension of the deadline was at the discretion of President Trump. 

A team from India has also reportedly arrived in Washington to negotiate tariffs. “We are having some great deals. We have on coming up, maybe, with India, a very big one, where we are going to open up India,” Trump said at a White House event on Thursday. 

According to Commerce Secretary Howard Lutnick, the Trump administration is close to reaching deals with 10 trading partners.

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