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 20th 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.
Comments (2)
Hai ancora la mentalità di Jonh Wayne nei film contro gli indiani…
Siete più fascisti di Mussolini negli anni ’30.
Noi europei non lasciamo morire una persona perché non ha l’assicurazione!
Too little, too late?
EU leadership should have heeded President Trump’s counsel in 2018 to stop purchasing energy from Russia – which was fueling the Putin war machine, and to invest in defense. Instead, EU representatives openly laughed at President Trump during his speech at the UN. Who is laughing now?
President Trump struck a deal with Angela Merkel in his first term to have Germany build a Liquid Natural Gas gasification facility in the port of Wilhelmshaven to facilitate the transfer of LNG from the US to Germany as a condition for the US to remain a part of NATO. If you want the US to defend you, stop buying gas from your enemy and support your ally’s economy.
https://thehill.com/policy/international/412551-merkel-concedes-to-trump-on-opening-germany-to-us-gas-imports-report/
Days after the 2020 Presidential election results were confirmed, Angela Merkel withdrew the funding from the LNG terminal to thumb her nose at Trump. Her fateful decision lead to Nordstream 2 and increased dependence on Russian natural gas.
Within two years Russia invaded Ukraine, in tanks largely financed with German supplied Euros.
I heard an analyst last week state that Germany can only scramble ten JSF’s and twenty-five tanks in a pinch.
West Germany’s population in 1989 was 62.7 million, yet they were able to field five heavy armored divisions and two light armored divisions.
The present day re-unified Germany has a population of 84.6 million and a much a much larger economy – yet could not defeat a troop of US Eagle Scouts.
Trump would be wise to withdraw completely from Europe – forcing the EU to fund their own defense, even if it requires cuts to EU social spending, socialized medicine, early pensions, infrastructure etc.
When the EU funds its own defense bills, the US can reduce her capacity and focus on paying down its $36 trillion in debt.
Now Germany is exacerbating their errors by exporting their manufacturing plants to China where energy and labor are much cheaper and you don’t have to worry about unions and pesky human rights.
https://asiatimes.com/2024/11/germany-closing-factories-at-home-opening-them-in-china/#
Germany is committing societal suicide on numerous fronts. What Germany does or fails to do will have a massive impact on economic viability of the EU as well as societal stability in Germany and neighboring countries.
Migrants tend to migrate toward labor – overwhelming infrastructure and schools in receiving countries as several families occupy a home intended for a single family. Unemployed Islamic immigrants who hate Western culture is not an ingredient anyone would want while baking a stable society – doubling or tripling that ingredient can cause the soufflé to collapse.
The EU has not been a good friend to the US, unless you consider intestinal parasites good company. Best to back away from the EU as it commits societal suicide and takes unwary bystanders with it.
Best of luck Europe. I wish the people of Europe well, but I doubt your elected leadership posses the skills, moral courage, intellect or temerity to navigate the next few years without causing serious harm to the people they govern, their allies or neighbors.
Semper Fidelis,
Sean Killeen