The Russia-Ukraine war has begun to shape U.S. and European policies on defense industrial investment, procurement, and production and likely will have consequences for future production capacities. This report presents an analysis of U.S. and European defense industrial bases (DIBs) before the war, challenges that have been identified because of the war, and ongoing efforts to respond to those challenges and improve the DIBs.

Implications of Russia's War on Ukraine for the U.S. and Allied Defense Industrial Bases

Alisa Laufer, Howard J. Shatz, Omar Danaf

ResearchPublished May 22, 2025

Cover: Implications of Russia's War on Ukraine for the U.S. and Allied Defense Industrial Bases
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The Russia-Ukraine war has begun to shape U.S. and European policies on defense industrial investment, procurement, and production and likely will have consequences for future production capacities. This report presents an analysis of U.S. and European defense industrial bases (DIBs) before the war, challenges that have been identified because of the war, and ongoing efforts to respond to those challenges and improve the DIBs. Studying U.S. and European DIBs in tandem contributes to an understanding of the shared and distinct challenges that these DIBs face, including structural issues, supply chain vulnerabilities, workforce matters, and government procurement and competition policies. 

With governments aiming to improve their DIBs, RAND researchers identified potential future indicators of progress for U.S. policymakers to consider. Also, given that the Russia-Ukraine war is ongoing, researchers identified factors that may change their conclusions. These insights may contribute to future decisionmaking on transatlantic DIB cooperation. Although this research was motivated by the Russia-Ukraine war, its findings and implications extend beyond the ongoing conflict and may inform how the United States approaches potential future conflicts.

Key Findings

  • Transatlantic reforms have been positive but modest.
  • Key production lines still face challenges.
  • Sustained funding for U.S. and European DIB modernization and production is essential to overcome persistent constraints on production capacity but is not guaranteed.
  • DIB growth could create new coordination challenges.
  • Ongoing investments in Ukraine’s DIB offer promise for a new defense industrial power in Europe, especially if initial joint production agreements meet expectations.
  • DIB requirements are evolving with the changing character of war.

Recommendations

  • The U.S. government should ensure sufficient funding for DIB reform and expansion if that is truly a national security priority.
  • The U.S. government should continue to authorize multiyear procurement contracts for munitions and weapon systems critical to future conflicts.
  • The U.S. government should avoid using stop-work orders during government shutdowns to maintain a competitive DIB workforce.
  • The U.S. government should fund mission-critical new start contracts during continuing resolutions to enable innovation during periods of fiscal uncertainty.
  • The U.S. government should continue to explore options with European partners to strengthen Ukraine’s DIB.
  • The U.S. Department of Defense should monitor effects of capital investments and adapt DIB investments accordingly.
  • The U.S. Department of Defense should monitor results of Europe’s DIB investments to inform future transatlantic coordination.
  • The U.S. Department of Defense should prioritize ease of production in systems and weapons design.
  • The U.S. Department of Defense should designate production-critical expendables and prioritize funding.
  • The Department of the Air Force should stack munitions requirements by conflict phase to aid production planning and delivery timelines.
  • The Department of the Air Force should determine the numbers and types of weapons that U.S. forces would be expected to expend in large-scale conflicts circa 2030 and seize the current period of heightened investments to advocate for requirements.
  • The Department of the Air Force should seek engagement with the government of Ukraine to identify joint innovation and production opportunities and to identify lessons learned for promoting and scaling innovation with industry.

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Laufer, Alisa, Howard J. Shatz, and Omar Danaf, Implications of Russia's War on Ukraine for the U.S. and Allied Defense Industrial Bases. Santa Monica, CA: RAND Corporation, 2025. https://www.rand.org/pubs/research_reports/RRA3141-3.html.
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This research was commissioned by the U.S. Air Forces in Europe (USAFE)–Air Forces Africa (AFAFRICA) Plans and Programs Directorate (A5/8) and conducted within the Strategy and Doctrine Program of RAND Project AIR FORCE.

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