Defense Trade and Arms Export Newsletter Highlights

President Trump signs EO to reform U.S. arms transfers – President Trump signed an Executive Order (EO), the “America First Arms Transfer Strategy,” which calls for a renewed focus on U.S. production, a new sales catalogue. For more information about the EO, please see here for our client alert on the topic.

Department of War Finalizes Realignment of the Defense Security Cooperation Agency and the Defense Technology Security Administration ‒ The Pentagon announced the realignment of the Defense Security Cooperation Agency (DSCA) and the Defense Technology Security Administration (DTSA) to the Under Secretary of War for Acquisition and Sustainment (USW(A&S)). The realignment unifies critical acquisition, sustainment, industrial base policy, security cooperation, defense sales and arms transfer functions under a single organization.

Department of War Invests $11.8 Million for the Domestic Processing of Critical Minerals ‒ The Pentagon announced an investment of $11.8 million in Defense Production Act Title III funds to Umicore Optical Materials USA Inc. to establish a new capability in Quapaw, Oklahoma, for processing materials needed for critical optical applications. The investment uses funds from the Additional Ukraine Supplemental Appropriations Act of 2022 and supports the Trump administration’s goal to increase the production of processed critical minerals and other derivative products. The processing center will support the supply chain for advanced optics, night vision systems, surveillance systems and other electro-optical and infrared technologies.

Department of War announces production agreements to surge munitions ‒ The Pentagon announced several agreements with U.S. defense contractors to surge production of air defense interceptors, strike missiles and critical components for munitions. Lockheed Martin will accelerate deliveries of the Army’s Precision Strike Missile and missile seekers made with BAE Systems for air interceptors. Honeywell will also increase production of components for munitions, including navigation systems. The agreements with Lockheed Martin, BAE Systems and Honeywell appear to build on previous deals previously made public, with additions to support opportunities to expand production and specifically focus on the munitions supply chain.

Carney rolls out ‘Buy Canadian’ defense plan ‒ Canada’s Defense Minister David McGuinty, Industry Minister Mélanie Joly and Secretary of State for Defense Procurement Stephen Fuhr unveiled a new “Buy Canadian” defense strategy. The plan will be Canada’s “guiding North Star” for defense acquisition, and it includes a commitment to deepen partnerships with Europe, the UK, Australia, New Zealand, Japan and South Korea. The strategy highlights the strong Canada-U.S. defense partnership, but Canadian industry is facing significant economic pressure due to tariffs and changing trade relationships.

Canada, Nordics deepen Arctic security ties ‒ Canada and the Nordic countries agreed to increase defense production and deepen security cooperation to counter Russia in the Arctic and push back against U.S. pressure on Greenland. The countries committed to closer Arctic security coordination, including focusing on scaling defense industrial capacity and developing inter-operable, dual-use technologies. Canadian Prime Minister Mark Carney said all the countries are working on defense investments but warned against uncoordinated spending because it would weaken collective security. Prime Minister Carney added that the leaders are seeking “specific opportunities” for mutually beneficial development.

Australia invests $2.75 billion in AUKUS submarine yard ‒ Australia has announced a $2.75 billion investment to begin construction of a new submarine construction yard at Osborne in South Australia, a key industrial element of the trilateral AUKUS partnership with the United States and United Kingdom. The facility is planned to support the construction of SSN-AUKUS nuclear-powered submarines later this decade and will feature extensive fabrication, outfitting and testing and launch facilities.

Boeing receives contract to modernise South Korean F-15Ks ‒ Boeing has been awarded an approximately $2.8 billion, 11‑year Foreign Military Sales contract to modernize the Republic of Korea Air Force’s 59 F‑15K Slam Eagle fighters. The program, which will run through 2037, covers the design, development and integration of new aircraft systems. The modernization effort will upgrade avionics, mission computers, sensors and other systems, ensuring the F‑15K fleet remains a key strike and multi-role platform for South Korea into the 2040s.

Singapore is in line to get its first F-35 fighters later this year ‒ Singapore is expected to receive its first Lockheed Martin F-35B fighter jets in 2026, joining other Asia-Pacific countries operating fifth-generation aircraft. The country has ordered a total of 20 F-35s, including 12 F-35B short takeoff and vertical landing variants and eight F-35A conventional variants, with initial F-35B deliveries beginning in 2026 and the remaining aircraft scheduled for delivery through 2030.

South Korea’s KAI rolls out first production of KF-21 fighter jet ‒ Korea Aerospace Industries (KAI) began production of the KF-21 Boramae fighter jet in less than two years after the construction of the jet began and four years after the first prototype made its maiden flight. The KF-21 is a two-seat jet carrying serial number 26-001, and it is considered a 4.5 generation fighter jet. It will be equipped with Western and Korean sensors and weapons in service, such as the KGGB precision glide bomb and MBDA Meteor air-to-air missiles. South Korea first conceptualized the plan for a self-sufficient fighter program 25 years ago, but it received the final approval to start development in 2015. South Korean President Lee Jae Myung attended the ceremony to mark the start of production and said the program “embodies the country’s aspirations” to be reliant on self-defense.

Japan fast-tracks export rules for future warplane ‒ Japan is working to accelerate the Global Combat Air Programme (GCAP) fighter jet collaboration with Italy and the United Kingdom despite claims that the program’s deployment is expected to be delayed until 2035. Japan’s ruling party is looking to ease strict export restrictions on defense equipment and weaponry, which pushes faster production of the fighter jet. Japan’s Parliament previously eased restrictions on GCAP, but reform to Japan’s defense export policy could lift limitations and allow exports to countries at war.

NATO countries hit 2025 spending target ‒ NATO published its annual report, which found that all of NATO’s 32 members met the 2% of GDP expenditure target, and overall defense spending was $1.4 trillion. The annual NATO report also highlighted the spending discrepancies among allies. Spain, Portugal, Albania, Belgium and Canada all spent the lowest, just meeting the former 2% spending cap. Poland had the highest spending at 4.3%, with Lithuania, Latvia, Estonia and Denmark just behind at 3%. Europe and Canada increased their defense spending by 19% to $574 billion, while U.S. expenditures decreased marginally to $838 billion. The decrease in U.S. expenditures also highlighted how the U.S. share of overall NATO defense spending fell from 64% to 59% in 2025.

European Commission adopts $1.7 billion work program to ramp up weapons production ‒ The European Commission approved a strategic document aligned with the European Defence Industry Programme. The document is aimed at increasing regional and Ukrainian weapon production and attracting investments in joint procurements. The European Commission plans to allocate €700 million to increase production of counter-drone technology, missiles, ammunition and other weapon systems. The €700 million investment also includes €260 million for the Ukraine Support Instrument to “help rebuild and modernize” Ukraine’s defense industrial base. The European Defense Projects of Common Interest will also receive €325 million to support the development of joint industry projects with EU members, Norway and Ukraine.

If you would like to discuss these stories or their implications on global defense trade, please reach out to one of the authors.