Asian and European defense supplies exceed their American counterparts.
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Quote from the 2008 television series “Star Wars: The Clone Wars”: “War is not won with a higher weapon, but with an excellent strategy.”
However, it seems that the strategy on the markets invests in weapons – in particular by the creators who do not have the headquarters in the United States.
After the administration of Trump by long global alliances, the countries poured money on their own defensive budgets, sending defense actions higher.
The growing wave of increased defense expenses usually increases all weapon reserves, but European and Asian defense supplies exceed their American counterparts.
While the actions generally sold after US President Donald Trump announced his plan of “mutual tariffs”, producers of European and Asian weapons continue to publish respectable profits every year, and some increased by more than 100%.
Less reliable USA
David Roche, an experienced investor and quantum strategy, said CNBC that an increase in defense inventory outside the USA results from a reduction in US trust as an ally.
He pointed out that the equalization of US President Donald Trump with Russia in the Russian-Ukrainian war, as well His “betrayal” of the President of Ukraine Volodymyr Zelenskyy He led some countries to assess that they can no longer rely on the USA
Roche's view is repeated by Trevor Taylor, director of the defense program, industry and society at the Royal United Services Institute, British Think Tank.
Taylor explained that historically European governments were often willing to buy from the USA, because it strengthened the belief that the world's largest economy “would feel better that he has the duties he did as an ally.
“(Now) that the United States does not want to incur duties that he has as an ally. Then some commentators give the question, why put money into their economy?” He added.
Therefore, European countries will be willing to buy from European companies or allies such as South Korea, according to Roche, because they have the same strategic goals.
Roche pointed out that international weapon transmission in principle allows the country of sale, such as the USA, to control the way the buyer uses the weapons they are sold, so with American questioning alliances, European and Asian countries prefer to obtain weapons from creators from outside the USA
One such example is when Forbes announced in March that the US partly stopped support for their donated F-16 fighters in Ukraine, Hindering radar councilors built on a plane.
“If you intend to have an autonomous defense policy, you must have an autonomous military industrial complex. You must do your own things or get them from someone who is on your side,” he said.
In Germany, the legislators adopted Historical debt reformpaving the way for huge defense. The Prime Minister of Great Britain Keir Starmer also has undertook to wander in the UK for defense.
The European Union has also developed plans mobilize up to EUR 800 billion ($ 883 billion) strengthen regional security.
These plans extend order books in companies such as Morine Systems Maker Thyssenkrupp Marine Systems, the war branch of the home company Thyssenkrupp.
CEO Oliver Burkhard said CNBC in February He expects its general available customer base to be triple until the end of the decade.
Burkhard said that the movement shows that “when it comes to the defense budget, there is no more limit.”
German weapon manufacturer Rheinmetall, known for the production of leopard 2 main battle tanks, he said in March He expects the sales of defense to increase by up to 40% this year, anticipating “main orders with a large volume from military clients”.
The increase in sales was expected even without the potential increase in major expenses for regional defense, said the company, although she noticed that “in a promising position it plays a significant role in the coming defense ability.”
These madness of expenses also increase Asian defense supplies, because European weapons manufacturers cannot quickly expand its production capacity to satisfy this sudden demand, said Taylor.
Therefore, they turn to Asian arms suppliers to complete these production capacity, which causes orders from European countries to arms suppliers in Asia.
From 2022, the South -Core creators of weapons He received huge orders from European countries They are happy to expand their arsenals or supplement the equipment transferred to Ukraine.
For example, Korea Aerospace Industries delivered its FA-50 fighters to Poland after the country gave its fighters from Soviet times to Ukraine.
Hanwha Aerospace has received orders from Poland and Romania for her self -propelled howitzers K9 over the past two years. South Korea in March announced an offer of rights It is worth 3.6 trillion of South Korea ($ 2.5 billion) to invest in foreign and domestic defensive facilities, ship construction and drone engines.
Business, In the rights editionHe said that he was intended to become a “global player” in the air space, ship's construction and defense.
Singapore Engineering St.which produces military equipment for the urban state, secured contracts In order to produce 155 mm artillery shells for European countries in 2024.
According to March 18 Note From the CGS International Stem Brokerage Company, “enters the long -term upcycling of earnings”, partly due to a large addressed market in international defense, especially in Europe and the Middle East.
Not only lack of trust
King Mallory, senior researcher at the American Think Tank RandIN He told CNBC another reason why Asian and European defense actions are outweighted by people in the United States is that the US has always been a great defense publisher compared to other countries.
In connection with this, he said that investors and portfolio managers do not expect a huge change in demand for defense shares in the USA, but governments plunge money in national defense actions, asian and European shares are conducting a huge increase in demand, much more radically than American, he explained.
One example is Japan, in which actions increased in their national defensive players, despite the fact that they have strict boundaries of weapon exports.
Japan plans to increase its defense expenses to 2% GDP by 2027, which has traditionally been limited to 1%.
As for whether the increase in international defense will be in a frying pan, all three analysts have said that this demand will last, perhaps even for the next 10 years.
According to Roche Strategy Quantum: “This is not a choice between weapons and butter, it is the fact that you have too much butter and there is no weapon and (demand for defense equipment) will last at least 10 years.”
– Chloe Taylor from CNBC contributed to this report.