US ambassador signals desire to reduce US-Portugal trade deficit

The US ambassador to Portugal, John Arrigo, has signalled that the US wants to reduce the overseas trade imbalance between the two countries – currently in Portugal’s favor – and get Portugal to up defence spending.

In an interview with CNN Portugal the ambassador did not raise the question of the future of the US’s presence at the Lajes Air Base on the island of Terceira in the Azores.

In October last year the ambassador has already proposed that the US wanted to strengthen its alliance with Portugal via a purchase deal whereby Portugal would buy F-35 jet fighters.

Washington sees the modernisation of Portugal’s defense capabilities as an opportunity to deepen the strategic partnership between the two countries, highlighting the relevance of NATO and the importance of the Lajes base in the Azores.

At the same time, the economic dimension of the bilateral relationship was emphasised, with the US establishing itself as Portugal’s largest trading partner outside the European Union in a bi-lateral trade between the two countries worth around €11Bn for both goods and services.

The question of the F-35s arises at a time when Portugal is evaluating replacing its current F-16s.

Last year the American manufacturer Lockheed Martin recently presented its latest models in Lisbon, competing with alternatives such as the Swedish Gripen, from Saab.

While the Chief of Staff of the Air Force has already expressed support for the American model, the Minister of Defense admits to considering European options, also evaluating the financial impact of each choice.

The car sector entrepreneur was chosen by Donald Trump to be ambassador to Portugal in December 2024 but only took up his post in Lisbon in September, 2025.

The US’s trade deficit with Portugal is US$3.8Bn and the US wants to reduce it. In other words, it wants Portugal to buy more goods from the United States, such as armaments.

“I want to see Portugal spend 5% (of its budget) on defence by 2035, if not before and I’m here to help that make these deals. That’s what I do, I’ve been a businessman all my life.”

Source: CNN Portugal; image US Embassy & Consulte in Portugal – US Ambassador to Portugal, John Arrigo presents his diplomatic credentials to Portugal’s President Marcelo Rebelo de Sousa in 2025.