Annual Report on Serbian-American Relations 2025

There is a tendency to interpret Serbia–US relations through moments of tension or the expectation of a single defining breakthrough. However, 2025 did not represent a rupture or a turning point of that kind. Instead, it marked something more substantive. A year in which the relationship became more functional, more structured, and more strategically relevant in practice.

Understanding its trajectory therefore requires moving beyond perception and focusing on what carries weight in Washington, namely security contribution, economic value, and strategic alignment. It is along these dimensions that Serbia’s direction becomes clear.

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Defense

Serbia is already contributing directly to US strategic and defense priorities.

From 2022:

• Approximately $800 million worth of munitions has been enabled to reach Ukraine, with unofficial estimates suggesting the figure may exceed $2 billion

• $131 million in defense exports has been directed to Israel

• Drone producing factory in Serbia in joint coordination with Israel

This does not reflect rhetorical alignment, but a material contribution to the Western defense-industrial ecosystem.

At the same time:

• Serbia has planned over 100 joint military activities with the United States

• Including Exercises Platinum Wolf 2024 and 2025

• Alongside continued cooperation with the Ohio National Guard

Serbia is often highlighted as one of the most successful partnerships within the Ohio National Guard’s State Partnership Program, frequently cited as a model among more than 60 partnerships across Europe and Eurasia.

Serbia’s policy of military neutrality does not constrain cooperation.On the contrary, it enables continuous, politically sustainable, and operational integration with the United States and NATO.

Economy

In the economic sphere, Serbia’s performance remained resilient despite tariffs of up to 35%. Exports to the United States did not decline. On the contrary, they increased by approximately 16%, bringing total goods trade close to $1 billion.

However, the core dynamic is not in goods, but in services and technology. In 2025, Serbia’s ICT exports exceeded $5 billion, with the United States as the largest partner, accounting for roughly 40–50% of total exports. This does not reflect low-cost outsourcing, but rather high-value digital integration into the US economy.

At the same time, Serbia’s technological trajectory is becoming increasingly clear. It is being actively realigned away from China and toward the United States. Through approximately $50 million in financing from the US EXIM Bank, Serbia is developing its 5G infrastructure on Western-backed systems, deliberately moving away from Chinese vendors such as Huawei. This was not a technical adjustment, but a strategic decision.

This shift is further reinforced by investment trends. Chinese investment in Serbia declined by 55%, signaling a process of decoupling.

In parallel, several structural developments underline this transition:

• The first electric vehicle produced in Serbia, the Fiat Grande Panda, has entered production under Stellantis

• Battery production is expanding, including through US-backed companies such as ElevenEs

• Serbia is institutionalizing artificial intelligence through a national strategy and expanding its supercomputing capacity, currently comprising three state-owned systems

• The gaming sector reached approximately $270 million, reflecting globally competitive digital output

Taken together, these trends point to a clear conclusion: Serbia’s economy is undergoing structural integration into Western technological and economic systems.

Energy

Energy is the domain where strategic alignment becomes structural. Serbia is undergoing a methodical process of de-Russification of its energy system, reflecting a deeper long-term shift.

A central element of this transition is the ongoing transformation of the National Oil Industry, which accounts for roughly 80% of Serbia’s fuel market. This process is moving toward resolution, with Hungary’s MOL negotiating the acquisition of Gazprom’s majority share, signaling a potential structural break from legacy dependence.

At the same time, Serbia’s gas profile highlights both the scale of dependence and the direction of change:

• Annual consumption stands at approximately 2.7 bcm, with over 90% historically imported from Russia

• New interconnectors are under development with Romania (1.5–1.6 bcm capacity) and North Macedonia (1.5 bcm)

• Existing diversification includes a partnership with Azerbaijan (400 million m³)

In parallel, Serbia is securing alternative supply routes:

• Access to LNG via Alexandroupolis, with 300 million cubic meters annually for 10 years

Importantly, Serbia is also opening a long-term strategic pathway toward nuclear energy. In cooperation with Électricité de France (EDF), the country is developing a roadmap toward approximately 1,000 MW of nuclear capacity by 2040.

Taken together, these developments point to a clear conclusion: Serbia is undergoing systemic integration into the Western energy architecture.

Geopolitics

Serbia’s geopolitical positioning today is not one of balance.

It is one of directional alignment under pressure.

• Russia’s role is declining, limited primarily to legacy energy ties, with zero military cooperation

• China remains present, but its strategic footprint is shrinking, with investment significantly reduced (55%)

Serbia is not abandoning multi-vector diplomacy overnight.

But the trajectory is clear. Economic integration, security cooperation, and technological alignment are all moving in the same direction,  toward the West.

Strategic Dialogue

The central gap in Serbia–US relations today is not a lack of cooperation, but a lack of structure.

In this context, a formalized Strategic Dialogue represents a structured framework for long-term implementation. From an analytical perspective, such a mechanism offers an opportunity to evaluate bilateral cooperation through a permanent lens, potentially stabilizing institutional partnerships across changing political cycles.

Bilateral policy analysis generally highlights three central areas of long-term structural focus:

1. Defense Integration

• Assessing frameworks surrounding Foreign Military Financing (FMF) pathways

• Evaluating standard ITAR compliance and review procedures

• Analyzing the ongoing technical transition away from legacy systems toward Western interoperability protocols

This process reflects a transition that extends beyond standard technical modernization, functionally integrating these capabilities into the broader Western defense-industrial ecosystem.

2. Economic Capital Trends

• Tracking the evolving regional footprints of the U.S. International Development Finance Corporation (DFC)

• Monitoring the utilization of Western financing via the Export-Import Bank of the United States (EXIM): Core sectors under observation include critical minerals, artificial intelligence infrastructure, and strategic manufacturing. These indicators suggest an ongoing trend where emerging growth sectors naturally align with Western capital and technology models.

Analytically, these capital indicators point to a long-term trajectory where emerging growth sectors become structurally synchronized with Western technology frameworks and insulated from non-Western supply chain dependencies.

3. Legislative and Congressional Context

• Observing the informational exchange within the Congressional Serbian Caucus

• Analyzing the long-term inclusion of regional security provisions within standard legislative vehicles, such as the National Defense Authorization Act (NDAA). Historically, such legislative frameworks serve to document operational interoperability, establishing a baseline for bilateral relationships within statutory contexts.

Such statutory mechanisms serve to formalize operational interoperability, providing a baseline of institutional continuity within U.S. legal frameworks rather than relying solely on shifting policy cycles.

What we are witnessing today is not a theoretical alignment.

It is already happening:

• In defense cooperation

• In energy transformation

• In technological integration

• In economic exchange

The data from 2025 demonstrates that integration across defense, technology, and energy is already functional and operational. For policymakers, this documented reality provides a structured foundation for evaluating the future trajectory of the bilateral relationship.

Download the complete report here.