Aerospace & Defense Exporter Alert, Mar. 2026

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As the Baltic countries—Estonia, Latvia, and Lithuania—rapidly modernize their military infrastructures to secure NATO’s eastern flank, they are emerging as a high-growth corridor for U.S. aerospace and defense exports. Driven by historic defense spending reaching as high as 5% of GDP and a deep commitment to NATO interoperability, these three allies offer U.S. companies streamlined procurement processes and opportunities for real-world technology testing and integration. From Estonia’s leadership in cyber resilience and space cooperation to Latvia’s drone production hub and Lithuania’s focus on advanced missile defense and ISR, the Baltic region represents a strategic entry point for U.S. companies interested in the European defense market.

Estonia: High-Investment Defense Cycle and Digital Resilience
Estonia’s shift into a high-investment defense cycle presents a prime landscape for U.S. A&D companies, characterized by a planned €10 billion expenditure from 2026–2029 that will push defense spending above 5% of GDP. This surge creates immediate demand for U.S. expertise in layered air and missile defense, C6ISR, autonomous systems, and cyber defense solutions, all while leveraging Estonia’s role as a NATO DIANA regional hub for digital resilience and advanced testing. U.S. firms can find strategic value in Estonia’s specialized defense industrial parks designed for rapid manufacturing and ammunition production, as well as its growing space ecosystem, solidified by the 2024 signing of the NASA Artemis Accords. With a strong preference for field-tested, dual-use technologies and a proven track record of industrial partnerships with U.S. primes, Estonia offers U.S. companies a high-readiness gateway to strengthen NATO’s eastern flank through collaborative R&D and integrated defense systems.

Latvia: A Leading Hub for Tactical UAS and Infrastructure Protection
Latvia is positioning itself as a central pillar of European security through its leadership in the Unmanned Aerial Systems (UAS) sector and its critical role in the EU “Drone Wall” initiative. With defense spending projected to reach 5% of GDP and a specific $60 million allocation for UAS and air defense by 2026, Latvia offers U.S. exporters significant opportunities in advanced sensors, GNSS-denied navigation, secure communications, autonomy software, and power-management solutions. The nation’s testing environments, such as the Selija military training area, provide U.S. firms with a rare platform to validate electronic warfare and counter-UAS technologies under realistic, high-threat conditions. Furthermore, Latvia’s focus on safeguarding subsea and energy infrastructure creates a demand for integrated maritime sensing and autonomous monitoring. Altogether, Latvia’s efforts make it a trusted integration hub for U.S. companies looking to scale solutions across European markets and NATO defense architecture.

Lithuania: Ambitious Modernization and Multi-Domain Defense
Lithuania’s defense industry is committed to NATO interoperability and rapid military modernization, supported by a projected national defense expenditure of 5.38% of GDP in 2026. Lithuania’s aggressive investment strategy prioritizes high-quality systems development, opening doors for U.S. companies specializing in layered air and missile defense, precision fires and artillery, and resilient C2 (command and control) infrastructures. As a strategically vital link on NATO’s eastern flank, Lithuania seeks U.S. defense technologies to counter regional hybrid threats. These technologies include counter-UAS, tactical communications, border surveillance, cybersecurity, AI, machine learning, and space-based capabilities. With a growing domestic sector focused on niche innovations like laser technologies and UAV development, Lithuania provides a streamlined gateway for U.S. defense exporters to deploy and sustain new territorial defense solutions.

2026 Events in the Baltics:

• May 12–13, 2026 – DAIMEX Baltic Defence & Aerospace Industry Meeting (Vilnius and Pabradė, Lithuania) 
  https://daimex.lt/ 
   
• May 27, 2026 – International Drone Summit 2026 (Riga, Latvia) 
  https://dronesummit.lv/   
   
• June 10–11, 2026 – Supply, Security & Defence Expo 2026 (Tallinn, Estonia) 
  https://2026.supplysecurity.eu/ 

Contact Information

Guntars Vicmanis, Commercial/Economic Specialist
U.S. Embassy – Riga, Latvia
Email: VicmanisG@state.gov 

Reene Moschella, Commercial Advisor
U.S. Embassy – Tallinn, Estonia
Email: MoschellaR@state.gov 

Jonas Vasilevicius, Commercial/Economic Specialist
U.S. Embassy – Vilnius, Lithuania 
Email: VasileviciusJ@state.gov 

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On February 6, the White House released a new Executive Order on Establishing an America First Arms Transfer Strategy.  The Strategy is intended to create an environment to maintain U.S. military dominance and technological superiority by ensuring that “future arms sales prioritize American interests by using foreign purchases and capital to build American production and capacity.”  The Strategy also aims to strengthen the U.S. Defense Industrial Base to “ensure it has the capacity to support our military and our allies and partners”.  The Fact Sheet on the EO can be found here: Fact Sheet: President Donald J. Trump Establishes the America First Arms Transfer Strategy. For additional information, please reach out to Kim.Wells@trade.gov.

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