Key Takeaways:
U.S. Defense Secretary Pete Hegseth's plan to announce additional troop cuts in Europe was blocked by senior White House officials, exposing internal divisions ahead of next week's NATO summit in Ankara where all 32 member states will gather.
Hegseth planned to tell NATO's top military chiefs in Brussels last month that the U.S. was preparing further reductions beyond the canceled armored brigade rotation to Poland and the earlier withdrawal of an infantry brigade from Romania, people familiar with the matter said. The proposal was nixed after it was shared with National Security Advisor Marco Rubio and other senior officials, the people said. Hegseth instead announced a six-month review of U.S. force posture in Europe.
"The important aspect of the meeting is to what extent the rift between the United States and Europe can be healed or narrowed during the summit," said Fatih Ceylan, a former Turkish ambassador to NATO and security analyst at the Ankara Policy Center. "We should not expect miracles, but nonetheless if there is a convergence of ideas emphasizing the importance of NATO, that should be seen as a success."
The internal policy split comes as Trump has threatened to withdraw from NATO and reduce U.S. troop levels, criticizing allies for failing to support the U.S.-led war on Iran and efforts to reopen the Strait of Hormuz. The Pentagon's defense strategy issued in January signaled the U.S. would reduce its military presence in Europe as it focuses more on the western Pacific and the Western Hemisphere, giving European nations primary responsibility for the continent's conventional defense. The last major U.S. troop reduction in Europe came in 2020 when the Trump administration withdrew about 12,000 troops from Germany, cutting the total to roughly 35,000 before the Ukraine war prompted a buildup to approximately 100,000.
The summit will test whether the alliance can project unity despite Trump's mercurial approach. NATO officials are considering scrapping plans to hold another summit next year in Albania, officials said. U.S. troop levels and allied military spending are expected to be central topics when Trump meets with leaders in Ankara on July 7-8.
Turkey's Balancing Act
Turkey, a NATO member since 1952 with the alliance's second-largest army after the United States, has positioned itself as both a reliable ally and an independent actor. President Recep Tayyip Erdogan described Turkey as working to ensure the Ankara summit "will stand as a reference point in NATO's history."
Yet Turkey has often acted independently, frustrating allies by refusing to participate in sanctions on Russia, engaging in disputes with Greece, and purchasing Russian S-400 missile defense systems — a move that led to its expulsion from the U.S.-led F-35 program in 2019 and forfeiture of $1.4 billion in down payments. Turkey also delayed Finland and Sweden's NATO membership until securing concessions on counter-terrorism cooperation and blocked the appointments of NATO chiefs in 2009 and 2024.
More recently, Turkey has leaned closer to the alliance. NATO missile defenses intercepted four missiles fired from Iran into Turkish territory during the Iran war, and Italy and Germany deployed air defense systems to help Turkey respond to heightened threats weeks before the summit. Trump has also signaled a willingness to rebuild defense ties, notifying Congress of his intention to sell Turkey roughly 80 F-110 aircraft engines for its KAAN fighter program, while Vice President JD Vance suggested the administration is examining whether Turkey could rejoin the F-35 program.
"Turkey wishes to distinguish itself as a foreign policy actor that is independent of NATO and the West," wrote Hamish Kinnear, principal Middle East and North Africa analyst at risk intelligence company Verisk Maplecroft, in a note. "While Turkey is not abandoning its balancing approach, it is tilting closer to the West, primarily because of NATO."
Security Crackdown and Domestic Control
In Ankara, authorities have deployed tens of thousands of police and placed air defenses on high alert, while banning demonstrations, concerts, and graduation ceremonies during the summit. Security units have detained more than 200 people suspected of links to extremist groups, while a Turkish court blocked access to websites critical of NATO on security grounds. Several journalists from opposition-leaning media organizations were denied accreditation to cover the summit.
Henri J. Barkey, professor emeritus at Lehigh University, wrote that the summit will bestow two major prizes on Erdogan: Trump's appearance validating his global role for outside audiences and his autocratic rule for his own population. "Beyond the daily persecution, hundreds have been arrested ahead of the summit, yet the U.S. government, unlike any predecessor, has stayed utterly silent," Barkey wrote for the Council on Foreign Relations.
The summit's outcome will shape defense sector sentiment and European security markets. The policy instability over U.S. troop levels introduces uncertainty for defense contractors with significant NATO exposure, including Lockheed Martin, RTX, and Northrop Grumman, while the broader geopolitical risk could affect European equities and the euro. If the summit produces a unified front on defense spending commitments, it could stabilize sentiment; if Trump's criticism of allies dominates, the risk premium on European defense and currency markets may widen further.
This article is for informational purposes only and does not constitute investment advice.
