May–June Defense Trade Newsletter Highlights

NATO Allies Agree to 5% Defense Spending Goal – Just ahead of the 2025 NATO Summit, members of the transatlantic alliance officially agreed to increase the defense spending target to 5% of GDP. However, Spain was granted an exemption of the new spending requirements. Now, NATO members will dedicate 3.5% of GDP to “hard defense,” such as weapons or troops, and 1.5% to cybersecurity, military mobility and other defense-related investments.
 
NATO Summit Defense Industry Forum 2025 – Time to ‘unite, innovate & deliver’ – On the sidelines of the 2025 NATO Summit, members of the defense industry convened to discuss developments in the defense industrial base. NATO Secretary General Mark Rutte called on NATO allies and industry to do more to support plans to increase capacity. Defense ministers, industry leaders and defense experts also discussed opportunities to strengthen cooperation across the alliance, boost production and innovation, and utilize the potential in the commercial space sector. Business leaders also presented Secretary General Rutte with an ambition statement expressing commitment to expand industrial capacity.
 

Rheinmetall and Reliance Strike Ammunition Agreement – German defense firm Rheinmetall and India’s Reliance Defence have announced a partnership on ammunition supplies, which includes the construction of a manufacturing facility on the west coast of Maharashtra, India. This facility will have the capacity to manufacture up to 200,000 artillery shells, 10,000 tons of explosives and 2,000 tons of propellants annually and assist in India’s defense export efforts.

Singapore Expands Defense Spending for Naval Modernization – Singapore has announced a 12.3% increase to its defense budget, pushing overall spending to S$23.4 billion ($17.4 billion) in the new fiscal year. The spending is intended to support the construction of two new Multi-Role Combat Vessels and two new offshore patrol vessels, which will enter service in 2028. Singapore also plans to use the funds to purchase six MRCVs and two Type 218SG diesel-electric submarines.

White House Announces $142 Billion Defense Deal with Saudi Arabia – During President Trump’s visit to Riyad, the White House announced a $142 billion defense sales agreement with Saudi Arabia that includes upgrades to the country’s air force and space capabilities, air and missile defense systems, maritime security, land forces modernization and border security. The agreement is part of the broader $600 billion investment agreement between the United States and Saudi Arabia reached during President Trump’s trip to the Gulf.

Qatar to Invest $42 Billion to Purchase THAAD and Pegasus Refuelers – Qatar has signed an agreement with the United States to acquire $42 billion worth of defense articles, including Terminal High Altitude Area Defense (THAAD) missile batteries, Pegasus KC-46 refueling aircraft, F-16E Desert Vipers, light armored vehicles, amphibious combat vehicles and MQ-9B Sky Guardian drones. The deal also includes a $10 billion investment from Qatar to make improvements to the Al Udeid air base, which supports nearly 10,000 U.S. troops and is currently the largest U.S. military base in the Middle East.

For more details on U.S. defense trade, please contact the authors of this alert.

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