1/26/2025–|Last updated: 1/26/202503:18 PM (Mecca time)
The US State Department said that sales of US military equipment to foreign governments last year rose by 29% to a record level of $318.7 billion as a result of countries seeking to replenish stocks after sending weapons to Ukraine and preparing for major conflicts.
The numbers issued for the final year of President Joe Biden’s administration support expectations of stronger sales for American arms manufacturers such as Lockheed Martin, General Dynamics, and Northrop Grumman, whose shares are expected to rise as global instability worsens.
During his election campaign, US President Donald Trump called on partners in the North Atlantic Treaty Organization (NATO) to spend more on defense, so that each country would contribute 5% of their gross domestic product to defense, a huge increase from the alliance’s current target of 2%, a level it had not reached. Currently, no country is a member of the alliance, even the United States.
Defense contracting companies are finding it difficult to meet the rising demand, which has increased significantly as a result of the Russian-Ukrainian war.
Sales approved in 2024 included F-16 aircraft and upgrades worth $23 billion to Turkey, F-15 fighter jets worth $18.8 billion to Israel, and M1A2 Abrams tanks worth $2.5 billion to Romania.
Orders approved in 2024 often enter the backlog of US arms makers who expect that orders for hundreds of thousands of artillery shells, hundreds of Patriot interceptor missiles, and increased orders for armored vehicles will boost their results in the coming quarters.
There are two main ways foreign governments purchase weapons from American companies:
- Direct business sales negotiated with a company.
- Foreign military sales in which the government usually contacts a Defense Department official at the US embassy in its capital. Both require US government approval.
Direct military sales to US companies rose to $200.8 billion in fiscal year 2024 from $157.5 billion in fiscal year 2023, while sales arranged through the US government rose to $117.9 billion in 2024 from $80.9 billion in the previous year.
