The US military is scaling back its presence in Europe in ways that haven’t been seen since before Russia’s full-scale invasion of Ukraine. Defense Secretary Pete Hegseth has ordered an immediate reduction in NATO-assigned assets and launched a broader review of the entire US force posture across the continent.

What’s actually getting cut

The US is reducing its deployed fighter jets in Europe from roughly 150 to 100, a cut of about 50 aircraft that includes F-16s and F-15Es. Eight aerial refueling tankers are being withdrawn. Surveillance aircraft are dropping from 26 to 15.

Maritime reconnaissance planes are also being pulled. On the naval side, an aircraft carrier, a submarine, and other warships are being reallocated away from European operations.

On the ground, the Pentagon plans to withdraw approximately 5,000 troops from Germany over the next six to twelve months. A planned brigade rotation of about 4,000 troops to Eastern European allies, specifically Poland and Romania, has been canceled outright. Brigade combat team deployments in Europe are set to decrease from four to three.

NATO allies were notified of this trajectory in late May 2026. The goal is to revert the US military footprint in Europe to something resembling 2021 levels, before the massive buildup that followed Russia’s February 2022 invasion of Ukraine. Current US troop presence in Europe is estimated between 68,000 and 100,000, depending on how you count rotational deployments and temporary assignments.

The broader review

Beyond the immediate cuts, a six-month review of the overall US force posture was announced around June 18, 2026. These adjustments follow earlier measures taken in May 2026, suggesting the drawdown has been unfolding in stages rather than arriving as a single dramatic announcement.

NATO is now reviewing its own defense strategy in response. The alliance is expected to discuss the implications during upcoming ministerial meetings and at the July summit.

What this means for markets and investors

A reduced US military commitment to Europe reshuffles the continent’s security calculus in ways that ripple through defense spending, energy security, and sovereign risk premiums. European nations that have been underinvesting in defense relative to NATO’s 2% GDP target now face even more pressure to ramp up military budgets.

For defense sector equities, particularly European defense companies, reduced American presence creates demand for indigenous European military capabilities, which is bullish for companies like Rheinmetall, BAE Systems, and Leonardo.

The cancellation of the brigade rotation to Poland and Romania is particularly worth watching. Those deployments were positioned as deterrence against further Russian aggression in the region.