The election of Donald Trump should, on the face of it, mean a direct hit for the European defence sector. The president-elect has never been a fan of Nato, grumbling that the US pays too much, and he wants to broker a speedy end to the war in Ukraine. But investors appear unfazed. Share prices of big European defence groups continue to climb following last week’s US election.

That is less counterintuitive than it sounds. True, Trump’s approach suggests there will be fewer US dollars streaming into security and non-US military industry. The US, together with Germany, provides the biggest slice — 16 per cent apiece — of Nato’s annual running costs. It is also the biggest spender on defence, with a planned budget of $850bn. But for European defence investors, props remain.

First, creeping protectionism is not limited to the US. Europe, too, wants more spending kept at home. More soft infrastructure is in place to do so. In March, the bloc penned its first European defence industrial strategy with the aim of reversing overseas spending: 78 per cent of EU states’ defence orders from February 2022 to June 2023 went to companies outside the region.