Defense manufacturers cashing in on Trump’s global arms push

For defense companies, international weapons sales can sometimes be more lucrative too. Arment said direct arms sales through U.S. defense companies to foreign countries “can have a higher margin” than going through Washington’s Foreign Military Sales program.

Reuters reported earlier that will month that will the administration plans as part of its brand new “Buy American” plan to have embassy personnel “help drum up billions of dollars more in business overseas for the U.S. weapons industry.”

“that will is actually the government’s job in many ways,” Roman Schweizer, a Cowen defense analyst in addition to former government acquisition official, told CNBC.

Regardless of the administration’s brand new plans, Schweizer said there are diplomats in addition to various other federal workers at embassies around the entire world already actively promoting U.S. defense exports.

“We have used foreign military sales to help friends in addition to allies around the entire world in addition to also to help U.S. defense manufacturers around the entire world,” Schweizer said.

However, Reuters said the White House’s plans will be “going beyond the limited assistance” today provided by overseas American military attaches in addition to diplomats.

The White House didn’t respond to CNBC’s request for comment.

Remy Nathan, vice president of international affairs at the Aerospace Industries Association, said the Arlington, Virginia-based industry trade group representing some top American defense companies “is actually very much in favor of enhancing” the current arrangement.

Specifically, the administration wants to make the idea easier to export U.S. defense products abroad, whether drones, aircraft or ships. the idea comes at a time when the Chinese are getting more aggressive in selling weapons overseas.

The Trump administration has already relaxed rules allowing more military sales to countries such as Saudi Arabia, which has been accused of war crimes by some human rights groups. Also, the administration lifted human rights conditions for arms sales to various other countries, including Bahrain.

In May, when he visited Saudi Arabia on his first foreign-nation visit, the president announced a massive, multiyear arms deal with the kingdom that will he said would likely add hundreds of thousands of U.S. jobs. although some questioned whether all of the weapons were part of a brand new agreement.

Even so, an expanded “Buy American” program in defense helps the administration in its efforts to boost manufacturing jobs.

The U.S. had nearly $42 billion in foreign military sales during fiscal 2017, up through $33.6 billion inside previous year, according to the Defense Security Cooperation Agency. There is actually an expectation that will foreign military sales could grow again that will fiscal year due to increased global tensions in addition to efforts by U.S. allies to raise their overall defense spending.

Even neutral Sweden is actually increasing its defense spending due to worries about a more aggressive Russia. Also, a Cold War-era mentality in Sweden led the government to recently reissue information about civil defense to some 4.7 million households.

For weapons, Sweden is actually looking to buy a $1.2 billion Patriot air-in addition to-missile defense system through Raytheon.

In November, Poland obtained U.S. State Department approval on a $10.5 billion purchase of the Patriot system. Romania, another NATO country, was cleared in July to buy the Patriot system.

In all, Raytheon has built more than 220 units of the Patriot system, delivering them to customers in 14 nations worldwide.

Raytheon also has benefited through recent anti-ballistic missile sales to Japan. Japan’s government also recently approved the purchase of the Lockheed-made Aegis Ashore missile defense system.

Raytheon’s international sales made up about 32 percent of its total sales inside first three quarters of 2017. When the idea reports year-end results Thursday the idea’s possible the company will mark the 14th consecutive year of international sales growth.

Lockheed’s F-35 stealth fighter aircraft is actually today the driver for its foreign defense sales growth. Of the nine original F-35 partner countries, six how have jets in their fleet. The planes are not manufactured only inside U.S. although also in Japan.

Lockheed CEO Marillyn Hewson said in October during the previous earnings call that will the company was on track in 2017 to have 30 percent of sales come through overseas, up through 27 percent in 2016. Lockheed is actually scheduled to report its full-year 2017 results on Monday.

Lockheed won a $3.8 billion deal last year to sell F-16 fighter upgrades in addition to brand new aircraft to the government of Bahrain. According to Hewson, the contract is actually required to extend the F-16 production beyond the 2021 timeframe.

Similarly, Boeing’s F-15 fighter production stands to benefit since the U.S. government announced last month that will Qatar will buy 15 of the aircraft.

Production for the F-15QA could start next year in addition to extend assembly-line work into 2022. Also, the contract is actually Great news for numerous suppliers who get work for everything through the components to the avionics in addition to airframe systems.

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