British defence secretary Sir Michael Fallon, making the first trip across the Atlantic by a UK cabinet minister since Donald Trump won the election, told the incoming administration that Russia presented a real threat that only Nato could deter.

Trump on the campaign trail repeatedly spoke warmly about a need for increased dialogue with Russian president Vladimir Putin while questioning the basic tenets of the Nato alliance, in particular that an attack on one constitutes an attack on all.

Such comments created alarm among Nato members, particularly in the Baltic states, who, even though Nato members, fear Russia might seek to destabilise them.

Fallon, speaking at a major defence forum in California that brought together senior members of the US defence establishment, announced a £100m contract with Californian drone company General Atomics Aeronautical Systems Inc to develop technology for the Protector drone. The UK announced last year that it will replace its present fleet of 10 drones with 20 of the new Protectors, due to come into operation around 2020.

The new contract is to improve the imagery from drones as well as securing improved communications links, the loss of which is one of the commonest causes of drone crashes.

Fallon urged the Trump administration not to retreat into isolationism, one of the populist threads during his campaign. “First, it is important that America remains an outward-looking nation,” Fallon told the conference.

The defence secretary’s speech aimed to balance establishing a rapport with Trump’s administration while sending a message that the UK regards Nato as the cornerstone of European defence and concerns over Russia.

He told the conference that Nato countries are in a “strategic competition” with Russia.

Fallon said: “Russia’s actions in Crimea and Ukraine have tested the alliance. You only have to visit Nato’s eastern flank to understand the acute sense of vulnerability that abounds. There’s no point pretending this is business as usual. Dialogue with Russia is useful. But deterrence is essential.

“Our unity sends a powerful signal of collective strength to potential adversaries. The US administration has always stood up to Russian intimidation. That was how Ronald Reagan and Margaret Thatcher helped bring down the iron curtain in the 80s.”

Fallon, who already knows Trump’s appointee as defence secretary, General James Mattis, offered some soothing words for the incoming US administration over Nato, saying it should not rely on the US to provide so much of the funding and that other members needed to step up.

“So to my second observation. Nato is the world’s most successful military alliance and it is as good for the US as it is for Europe. It was the alliance’s collective commitment that invoked Article V after America was attacked on 9/11.”

But he added: “I firmly agree with your president and your president-elect that many Nato nations still need to do more to pay their way. Nineteen Nato members spend less than 1.5% of GDP on defence. The US taxpayer can’t be expected to shoulder a disproportionate burden.”