There’s an inherent tension that [U.S. defense contractors] are going to face, because every time you sell internationally, there’s perception that you’re creating jobs in an international market… And at the same time you’re going to need to be able to show that you’re making jobs in the U.S. through an international sale.” –Jon BarneyCNBC recently previewed President Trump’s address to a joint session of Congress where he outlined his vision for America, including his plan to spend $54 billion to strengthen the U.S. military. The article noted that the U.S. defense industry will be paying close attention to President Trump’s plans as domestic defense contractors face increased competition from foreign competitors as governments around the world question U.S. commitment to longstanding defense relationships. The article adding context using Avascent data that said in 2016, U.S. arms exports reached roughly $38 billion, with America’s biggest customers being Saudi Arabia at 13 percent, the United Arab Emirates with 8.7 percent, and Turkey at 6.3 percent; and that in both 2015 and 2016, foreign military sales made up 20 percent of U.S. defense firms total sales.
Avascent Managing Director Jon Barney spoke with CNBC for the piece discussing the tensions felt by the U.S. defense industry to trade internationally but to also keep jobs in the U.S. — a difficulty highlighted in the recent Avascent white paper, America First? US Defense Exports in the Trump Era. However, the article included that while Trump’s “unique brand of diplomacy” may complicate arms sales in the near term, most governments that are increasing defense spending likely do so in response to conflicts that will outlive the current presidency. Jon Barney confirmed, “A lot of these countries that have been big consumers — Saudi Arabia, Japan, UAE — the underlying threats and economic drivers for them to procure defense products are all still there.”
Read the full CNBC article here.
Read the full Avascent white paper: America First? US Defense Exports in the Trump Era.