There's a major free-rider problem - Poland probably doesn't want Spain to be able to get the benefit of their military expenditures, which block continental invasions from the east). There's also collective action problem - the Great European Plain is the "roadway" for land forces to get into Europe from the east, and so you need all of the countries that sit on that plain to be heavily militarized in order to provide an effective defense. There's significant reasons why Europe would want to maintain tight integration of national defense institutions and policies.

And this is their exact problem today- in many respects the entire EU is free riding off the US (and has been for decades now). Within the continent the Spainards (the furthest from Russia with limited world war exposure in their history) have little desire to fund a national defense whereas on the other side you have a Poland (sits on Putin's border and has a long history of being run over from both the east and the west) with the polar opposite view.

The Pax Americana arose because Europe was under the massively powerful umbrella of the U.S. military....but it also existed in part because European armed forces were generally weak and subject mostly to NATO oversight. Getting Europe to vastly increase its own defense operations isn't an entirely unmitigated good, because you increase the chances of going back to the Bad Old Days of wars within Europe.

And this brings us around to the trade deal. Avoidance of that is fine in concept, but only if the Europeans have some skin in the game. Since the reunification of Germany, they largely haven't. NATO navies are at all-time lows. The Germans can field maybe ~80 combat ready aircraft and that's probably a very generous estimate:

Polish Foreign Minister Radosław Sikorski likes to relate a humorous moment from a NATO event that occurred during the 2013-2019 tenure of Dr. Ursula von der Leyen as head of Germany’s MoD. One of his German colleagues took him aside and pointed across the room to the CDU politician and told him:

“Do you see that woman over there,” asked his German colleague. “That’s our defense minister. She has more children than the Luftwaffe currently have serviceable aircraft.”
(from 19fortyfive.com - The numbers prove germanys military is rotting away)

If the Europeans don't want to fund their own defense in traditional ways, they can buy our hardware instead. I'm good with that.