Trump, the defence story so far
Inauguration day is upon us. Whether you think this is the beginning of the end or are willing to give President Donald Trump a chance this going to be the way of the world for the next four years.
The Donald has already ruffled a few feathers on his way to January 20th and not least in the defence and aerospace sector.
So here is the story so far, well at least part of it. Everybody knows the man has tweeted A LOT.
First of all there is F-35.
Incidentally following this tweet it was reported that Lockheed shares fell 2% and Boeing’s rose 0.7%.
We all know the cost of the F-35 programme has spiralled and is proving to be one of the most expensive programmes the US military has embarked on despite Lockheed Martin suggesting that the cost of each aircraft is beginning to drop.
With this Boeing perked up as it has reportedly had plans to make an Advanced F-18 Super Hornet for some time now having demonstrated the capability back in 2013. Though it is worth noting they are two very different aircraft.
Since the F-35 tweets, which sent the defence industry into a spin, the CEO of Lockheed Martin has been to speak with Trump.
So the game is on. As Hewson attempts to keep the F-35 programme going with the promise of more jobs, which Trump has made a top priority, and the idea that new contracts, from foreign sales, that could keep the programme active.
At this point some commentators have said F-35 is too big to fail anyway but with a President Trump at the helm anything is possible.
Relations with China are not off to a good start either.
First the then President-elect broke decades of protocol by receiving a call from Taiwanese president after winning the election.
It is worth noting that China’s security White Paper totally ignores Taiwan – more details of which can be read here.
Then following a US Navy UUV that had been seize in the South China Sea he tweeted the following:
The US Navy insisted that the UUV was collecting oceanographic data though it has been suggested that it was there to monitor and track the People’s Liberation Army Navy (PLAN) submarines operating in regional waters.
With turbulent times ongoing in the South China Sea this is a situation that will likely present itself again to the Trump administration. Trump seems to not look upon China favourably at this time.
More details can be found in this story.
NATO has also been in Trump’s firing line.
He has been less than positive about the organisation claiming it to be ‘obsolete’ and criticising other members for not pulling their weight.
Meanwhile US troops have been arriving in Poland under a NATO umbrella as a show of force against Polish adversaries.
NATO was founded in 1949 as a reaction to two devastating world wars that consumed most of the world and devastated Europe.
With transatlantic cooperation being at the core of NATO’s existence these blasé comments about the organisation could make some European members, especially those in the East, feel skittish.
Though it is correct that the US is the largest contributor to the alliance and some are arguing it is fair enough that Trump is asking others to pull their weight.
At the moment few of the member states are meeting NATO guidelines that require member states to spend a total of 2% of GDP on NATO defence expenditure.
Defence spending could be on the up for the US anyway.
All the while during his campaign Trump alluded to increased defence spending and the end of sequestration.
It was no secret that the day after the election share prices of some of the defence equipment went up significantly.
So for all of use in the defence and aerospace industry, fasten your seat belts because I have a feeling the next four years are going to be a bumpy ride.