The Start of a Diminishing US Military Presence in Europe

Executive Summary

In early May, the Pentagon announced that thousands of American troops would be withdrawn from Germany in the coming months. While no explicit reasoning was given, this announcement comes amid deteriorating relations between German Chancellor Friedrich Merz and US President Donald Trump after Merz publicly criticized the US approach to negotiations with Iran. This most recent announcement continues to raise doubts among leaders about the reliability of American protection and demonstrates the necessity of increased European investments in defense spending.

Key Points

Germany currently hosts the largest number of American troops in Europe, with about 36,000 on its soil. According to the Pentagon, troop withdrawal is expected to occur over the coming six to twelve months. It is currently unclear if troop reductions can be expected elsewhere on the continent.
During the first Trump term, the President planned to reduce troops in Germany, though this was interrupted by the election of Joe Biden.
Though no specific reasoning was given for this upcoming reduction, it is likely this was triggered by Chancellor Merz’s comments about American strategy in Iran. In early May, Merz claimed that Iran was humiliating the US and that “the Americans clearly have no strategy” for negotiations. In return, Trump tweeted that Merz “doesn’t know what he’s talking about.”
Alongside the planned troop reductions, the US also plans to raise tariffs to 25% on EU-manufactured automobiles. This is especially harmful for Germany, as it is a major car manufacturer. In 2024, automobile exports comprised about 24% of total German exports, equaling €372.2 billion in foreign market revenue.

Analysis

This most recent exchange between Trump and Merz comes amid deteriorating relations between the US and its European allies as the war in Iran continues. At the start of the war, Germany was one of the most supportive of US-enforced regime change in Iran. However, the country is beginning to feel the consequences of higher energy costs and increasing economic uncertainty. Furthermore, European leaders have not formed a cohesive approach to the war, which has led Trump to criticize NATO members for a lack of assistance. Coupled with Merz’s recent statements, troop reductions are also a likely reaction to European partners’ tighter restrictions on US use of their territory and airbases, such as in France, Spain, and the UK. However, based on the statements of some leaders, the Pentagon’s announcement does not appear to be totally unexpected. While the timing was surprising, according to EU Foreign Policy Chief Kaja Kallas, the continent has prepared for a diminishing American presence for years.

Policy Implications

As the credibility of US defense guarantees weakens, European NATO members are increasing their defense budgets. While an announcement like this may have surprised European allies a year ago, it appears that leaders are better prepared to cope with the decreasing US presence.
This change will require countries in NATO to step up their defense spending to achieve the 3.5% of GDP spending goal, which Germany is expecting to reach by 2029.
In 2025, European NATO members increased their defense spending at an annual rate not seen since the end of the Cold War.
In order to make up for a decreasing US presence, European NATO members must continue to increase defense spending for both domestic needs and their allies in Ukraine.