How one Trumped-up stock best showcases European attitudes to America

The immense growth of Rheinmetall, Germany’s biggest arms manufacturer and provider, best showcases Europe’s fears and anxieties about Donald Trump’s second term in office.

Thanks to the rhetoric of Donald Trump, JD Vance, and the wider administration, European and NATO powers can no longer be sure that America will come to Europe’s defence, despite treaty stipulations stating so. As in his first time in office, Trump has called for European powers to spend more on their defence instead of depending on American support. Vance doubled down on these comments at the Munich security conference in February, stating that Europe cannot rely on America for their defence. On the 20^th January, when Trump officially took office, Rheinmetall’s share price sat at €692 per share. On Wednesday, Rheinmetall reached an astonishing peak of €1483, a 114% price increase in 2 months. In the same period, other European arms manufacturers have similarly capitalised on European fears, with BAE Systems growing by 33% and Rolls Royce by 25%. However, their growth remains significantly lower than that of Rheinmetall.

Rheinmetall has effectively capitalised on European anxieties of Trump and Putin’s war machine. CEO Armin Papperger stated that the company received more orders in the last 12 months than in the prior 15 years

From the start of the war in Ukraine to the end of 2024, Germany, including their EU contributions, allocated €28.3 billion to Ukraine, making them the second-largest contributor to the war-torn nation. The largest single contributor to Ukraine? The US: who have donated around $114 billion. Therefore, when Trump makes it unclear whether Ukraine will continue receiving American support and whether the US will be at the defence of their other Eastern European, NATO allies like the Baltic states, European governments inevitably feel more cautious about relying on American support. This anxiety is visible in the discussions surrounding increasing defence spending and new defence planning. Keir Starmer has vowed to increase defence spending from 2.3% of GDP to 2.5% by 2027. Andrzej Duda, President of Poland, a nation that spends more than most other NATO members on defence, has recently called for the US to base nuclear weapons in Poland. Most recently, Germany passed new Chancellor Friedrich Merz’s plans to reshape the country’s debt and borrowing laws to allow a €1 trillion injection into the nation’s infrastructure and military. The passing of said plans caused a rush of investors to purchase Rheinmetall stock, leading the price rise to its peak of €1483.

Rheinmetall has effectively capitalised on European anxieties of Trump and Putin’s war machine. CEO Armin Papperger stated that the company received more orders in the last 12 months than in the prior 15 years. Some buyers include the Spanish and Italian military, who ordered €200 million and €280 worth of products. The company is also expanding into other NATO allies such as Lithuania, Hungary and Romania. Moreover, the growing size and influence of Rheinmetall led to an alleged plot from the Kremlin to assassinate CEO Papperger.

If Trump’s commitment to Ukraine and Europe remains doubtful whilst Putin’s threats and war machine rage on, then Europe, motivated by fear and uncertainty, will need to supply themselves and rely far less on the US. This would enable the continued growth of Rheinmetall and other military companies such as Rolls Royce and BAE Systems, who, despite criticism and controversies, have managed to hold strong. Ultimately, upon hearing of the latest developments surrounding the war in Ukraine, it is essential to remember that they unfortunately benefit the various players within the military-industrial complex, such as these arms manufacturers.