Pentagon Weighs Pulling Up to 40,000 U.S. Troops From Europe

The Pentagon is reportedly weighing a major drawdown of U.S. forces in Europe, a shift that would ripple through defense budgets, NATO logistics, and the trade in prime U.S. contractors. According to NBC News, citing seven current and former U.S. and Western officials, the plan under consideration would pull planes, ships, weapons and tens of thousands of U.S. troops from Europe, despite warnings from NATO allies about the growing threat of Russian aggression.

What the plan actually looks like

The reduction could be roughly one-third of all U.S. troops in Europe, or about 25,000 — or it could be even larger, as much as half, or up to 40,000 troops.

If carried out, it would be the most significant scaling back of the 80,000-strong U.S. military presence in Europe since the aftermath of the Cold War in the 1990s.

Countries affected by the cuts will likely include Germany, Italy, and Spain, according to five sources. The three nations host the bulk of U.S. troops in Europe, but leaders of all three countries have also clashed with U.S. President Donald Trump over the war with Iran.

How we got here

The review was launched in June 2026, following Trump’s public disputes with European leaders over their reluctance to support the U.S.-Israeli war with Iran. In May, the Pentagon ordered the withdrawal of 5,000 troops from Germany after Trump clashed with Chancellor Friedrich Merz over the war.

The White House has said the six-month review will ‘ensure irreversible momentum toward a European-led defense of Europe’.

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The congressional pushback

The 2026 National Defense Authorization Act sets a statutory minimum of 76,000 U.S. troops in Europe, allowing the administration to fall below that line for no more than 45 days without congressional action. That legal floor sets up a potential fight between the White House and Capitol Hill if the drawdown moves forward.

One Republican member of Congress told NBC News that withdrawing 25,000 troops would be ‘absolutely unacceptable’, adding: ‘You can’t deter the Russians on the cheap’.

Why traders should care

A U.S. pullback would force European capitals to accelerate their own defense buildouts, which has been a tailwind for European primes and a mixed signal for U.S. contractors tied to forward-deployed logistics, basing, and rotational deployments. Watch for continued rotation into European defense names, and headline risk into any U.S. prime with heavy exposure to Europe-based operations and sustainment contracts.

Any confirmation, denial, or leak on the size and timeline of the drawdown is likely to move the tape in both U.S. and European defense equities. Keep an eye on other news for updates as the story develops.

Options market and stocks to watch

Watch for movement in the U.S. defense primes with meaningful European footprints:

• LMT: Watch for reaction on any impact to F-35 sustainment and forward-deployed logistics in Germany and Italy.
• RTX: Patriot and missile-defense demand could shift as Europe takes on more of its own air defense.
• GD: Watch land-systems exposure tied to U.S. armored brigades rotating through Europe.
• NOC: Any change to U.S. surveillance and long-range strike posture in theater is worth tracking.
• BA: Defense segment exposure to tanker, rotorcraft, and munitions programs tied to European basing.

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