Thursday, March 06, 2025

How Trump Is Killing the U.S. Defense Industry

It turns out that abandoning allies and tossing out security guarantees is bad for business. While U.S. defense stocks are slumping, European defense stocks are rising quickly because the markets have concluded that those governments will be spending lots more on defense. And every government around the world knows what happened to Zelensky last week in the Oval Office. The conclusion that many leaders will draw from the altercation that Trump and Vance had with Zelensky is that U.S. security guarantees-a key reason why countries tend to buy U.S. weapons- are not going to be a convincing argument anymore. Since Trump's inauguration, shares in the six biggest U.S. defense companies have fallen by an average of 4 percent. Meanwhile, shares of Europe's largest defense groups - including Germany's Rheinmetall - "have surged" by almost 40 percent in the same period.

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Comments

No one could have foreseen that electing Putin's Beach to the White House would undermine our defense industry.

#1 | Posted by censored at 2025-03-06 04:28 PM

Trump's abrupt change of course away from Western allies and Ukraine has an even more fundamental unintended consequence: Washington's security guarantees, which underpin its arms exports, have become worthless.

"I'm not going to make security guarantees beyond very much," Trump said last week while trying to force Ukraine to sign a deal that the Kyiv Independent reported would give the United States 50 percent of revenues from Ukrainian state-owned natural resources. "We're going to have Europe do that," Trump added, because "Europe is the next-door neighbor."

But security guarantees are the unbeatable sweetener that Washington has historically used to clinch most deals. Many countries, including a large number in Europe, have bought U.S. weapons precisely because they came with U.S. security guarantees. The guarantees were not just the sweetener: They were at the core of the deal.

"When countries buy weapons, they consider the equipment, and thus the manufacturer, and thus the country, because these things matter with equipment that you use for many years, up to 40 years," Limmergard said. "And U.S. foreign military sales have depended a lot on America offering security guarantees."

In other words, buying U.S. weapons was a way of buying the United States' friendship and protection. After months of agonizing debate in 2021, still nonaligned Finland chose to buy U.S.-made F-35 fighter jets to replace its aging fleet of fighter jets, even though Gripens from Sweden"Finland's close friend and neighbor"would have been cheaper. Although the F-35s have undisputed capabilities, it was lost on nobody that the Finns' $9.4 billion deal also included U.S. benevolence and security guarantees. Indeed, the deal was managed through the U.S. government's Foreign Military Sales program.

But with Trump now openly appearing to side with Russia and President Vladimir Putin, even the most generous buyers of U.S. weapons can no longer be sure that their money will result in Washington's benevolence and protection.

#2 | Posted by censored at 2025-03-06 04:37 PM

This article is written by a member of the Atlantic Council, whose members (including warmonger Stephen Hadley) have tens of thousands of shares of stock in the defense industry. No conflict of interest there, right?

#3 | Posted by ExpectingReign at 2025-03-06 09:56 PM

@#3 ... No conflict of interest there, right? ...

Yeah, that article presents an obvious conflict of interest.

So, ignoring that article and its author, let's discuss ...

US defense stocks are not the only ones declining of late.

Indeed, the S&P500 is bordering upon entering a "correction."   That's a decline of 10% or more from a recent high point.

So, it does not seem to be just the US defense stocks.

Maybe a better question to ask is ... why does the US Stock market seem to be so jittery?

#4 | Posted by LampLighter at 2025-03-06 10:12 PM

why does the US Stock market seem to be so jittery?

Might have something to do with a monkey with a machinegun.

#5 | Posted by REDIAL at 2025-03-06 10:37 PM

To answer your question, in a way: MAGA is the reason. Trump is a destroyer, not a creator. Traditional "creative" artists work in oils or stone or in clay, but Trump is fundamentally a "political iconoclast", so his medium of choice is that he destroys that which has been already created and then declares to his many followers that the value of the rubble pile that remains is much greater than what came before it. And they buy into it. Again and again.

My point of view (religious/Islamic) is that pure political order is inherently immoral/amoral and fundamentally corrupt. Even some pragmatic concern for the prosperity and security of the populace is tainted with the wickedness of certain men like Trump who come to power in largely legitimate (Democratic) ways. Trump also believes this, but his fundamental characteristic is that he (a classic charismatic) is a master at manipulating and embodying many simple-minded people's beliefs that he (and he alone) can reverse that immorality and corruption to restore American political order to a moral and uncorrupted state. A state that was never even there to begin with.

#6 | Posted by ExpectingReign at 2025-03-06 10:49 PM

@#5 ... Might have something to do with a monkey with a machinegun. ...

Maybe a chain saw on stage, and not a machine gun?


This S&P 500 darling is down 25% in the past month! Here's what's going on
uk.finance.yahoo.com

... It has been a jittery start to March for the US stock market. Concerns around tariffs and the impact they could have on economic growth and inflation have caused some investors to get worried. Some S&P 500 stocks have seen a significant move lower in a short space of time. ...

#7 | Posted by LampLighter at 2025-03-06 10:51 PM

This article is written by a member of the Atlantic Council, whose members (including warmonger Stephen Hadley) have tens of thousands of shares of stock in the defense industry. No conflict of interest there, right?
#3 | Posted by ExpectingReign

What conflict? An alleged warmonger (who was not the writer) owns stocks in the defense industry and is concerned that his US(?) stock shares are going down while European defense stocks are going up.

An imperfect analogy would be telling someone to pipe down about wanting fire department services while their house is going up in flames, because they are conflicted.

#8 | Posted by censored at 2025-03-06 10:53 PM

@#6 ... My point of view (religious/Islamic) is that pure political order is inherently immoral/amoral and fundamentally corrupt. ...

Even some pragmatic concern for the prosperity and security of the populace is tainted with the wickedness of certain men like Trump who come to power in largely legitimate (Democratic) ways. ...

Trump also believes this, but his fundamental characteristic is that he (a classic charismatic) is a master at manipulating ...

I'd prefer to classify Pres Trump as a malignant narcissist, and not as a classic charismatic.

How to Identify a Malignant Narcissist (2023)
www.verywellmind.com

... A malignant narcissist is an abusive person who finds pleasure in lying, manipulating, and using other people in order to get the things that they want. ...


#9 | Posted by LampLighter at 2025-03-06 10:57 PM

Good. War is dumb. Our gov is bloated and cannot pass a full audit of all branches.

#10 | Posted by Brennnn at 2025-03-06 11:54 PM

It's really funny how hard the markets were pumping between Nov 5 and Jan 20, and how hard they've tanked since Jan 20.

I mean, it's actually kinda amazing to see it happen in real time.

All the hope. All the excitement.

All the, that ain't happening.

#11 | Posted by snoofy at 2025-03-07 12:01 AM

@#10 ... War is dumb. ...

From back in my days of protesting the Vietnam War, yeah, I will agree that war is dumb.

But the alternative?

In the current instance, allowing an aggressive nation to invade and eliminate a sovereign nation?


Is that good?

... and cannot pass a full audit of all branches. ...

I have never said that our Federal government should not be audited for waste.

But, along those lines, let me ask you ...

If you have to go in for surgery, do you want the surgeon to use a scalpel to operate on you, or would you want the surgeon to use a butcher's cleaver to operate on you?

I feel the same way about Mr Musk's cleaver upon our Federal government.


#12 | Posted by LampLighter at 2025-03-07 12:04 AM


If you have to go in for surgery, do you want the surgeon to use a scalpel to operate on you, or would you want the surgeon to use a butcher's cleaver to operate on you?

False analogy.


I feel the same way about Mr Musk's cleaver upon our Federal government.

After all the years of crying about BigBird, and Washington Monument Closures, there's no pleasing everyone, and nothings been accomplished by this "scapel" method.

So lets see how this turns out. You never know, might prune too much, then add where its needed..


From back in my days of protesting the Vietnam War, yeah, I will agree that war is dumb.
In the current instance, allowing an aggressive nation to invade and eliminate a sovereign nation?

What do you think happened in Vietnam? US Left when it was untenable and unwinnable.
South Korea? US Negotiated a peace when the Chinese came to town.

How is Ukraine different than either of those?

All three were proxy-civil wars.

#13 | Posted by oneironaut at 2025-03-07 12:51 AM

"might prune too much, then add where its needed."

Pruning too much will kill even the most abundant tree.

The IRS recently hired a newly retired nuclear engineer...so they could UNDERSTAND some of the more complex tax returns being filed in that industry.
But since he was a "probationary employee", he was fired. He could LITERALLY add hundreds of millions of tax revenue...but now his insight will be lost.

D'you actually think he'll be eager to come out of retirement AGAIN???

#14 | Posted by Danforth at 2025-03-07 01:33 AM

"False analogy."

Good point. The surgeon would at least know how to use the cleaver.

Meanwhile, these Doge-bags didn't know the difference between a new hire and a new promotion.

They also claimed $8 billion in savings, which turned out to be $8 million. Zeros being so difficult to accurately count, and all.

#15 | Posted by Danforth at 2025-03-07 01:37 AM

@#13 ... False analogy. ...

Easy to say, tougher to substantiate.

What's yer current alias got?


... and nothings been accomplished by this "scapel" method. ...

Quite the contrary.

I'd proffer that millions of successful surgeries have been accomplished by the scapel methid.


... How is Ukraine different than either of those? ...

Are they really different?

The US supported the fight of an invasion and assault by an outside entity.


So, I have to ask, why does Pres Trump seem to be supporting Pres Putin's unprovoked invasion of a sovereign country?


#16 | Posted by LampLighter at 2025-03-07 01:42 AM

@#13 ... False analogy. ...

August Campbell & The Spur Of The Moment Band - The I-95 ------- Song
www.youtube.com

Lyrics excerpt ...

genius.com

...
Well I was driving down I-95 the other night
When somebody nearly cut me right off the road
I decided it wasn't going to do any good to get mad
So I wrote a song about him instead. It goes like this...

Were you bo-rn an -------, or did you work at it your whole life?
Either way it worked out fine, 'cause you're an ------- tonight

Yes you're an -------, and don't you try to blame it on me
You deserve all the credit, you're an ------- tonight

You were an ------- yesterday, you're an ------- tonight
And I've got a feeling, you'll be an ------- the rest of your life

And I was talking to your mother, just the other night
I told her I thought you were an -------, she said "yes, I think you're right"

And a-ll your friends are -------s, 'cause you've known them your whole life
And somebo-dy told me, you've got an ------- for a wife

Were you bo-rn an -------, or did you work at it your whole life?
Either way it worked out fine, 'cause you're an ------- tonight
...


#17 | Posted by LampLighter at 2025-03-07 02:36 AM

They had JFK killed for less

#18 | Posted by lee_the_agent at 2025-03-07 07:37 AM

"So, it does not seem to be just the US defense stocks."

No sir, it is not.

Most people don't follow currency exchange, but as a USan living in Europe, I do. We started this week at $.96 = 1 EUR. As of right now, $.92 = 1 EUR. That means that every bill I pay just went up by ~4%.

I'm certain its a result of Trump's tarriffs, but I also think everything else is a contributor as well.

#19 | Posted by madbomber at 2025-03-07 08:46 AM

"False analogy"

Is there any other kind?

"All models are wrong. Some models are useful."
--George E. P. Box

#20 | Posted by snoofy at 2025-03-07 10:23 AM

Good. War is dumb.
#10 | Posted by Brennnn

You should pass along your feedback to the Ukrainians. Maybe they haven't considered the upside of the alternative (surrendering to Putin and having Russian boots on their necks for the next 2 to 10 generations).

#21 | Posted by censored at 2025-03-07 11:04 AM

bsky.app

Rearm Evrope!

#22 | Posted by itchypossum at 2025-03-07 03:37 PM

Putin's unprovoked invasion

yeah no one's even saying that any more. Except you I guess.
Do you still think Pearl Harbor was unprovoked too?

#23 | Posted by itchypossum at 2025-03-07 08:21 PM

It figures Daddysfist would be a Putin fanboi.

#24 | Posted by reinheitsgebot at 2025-03-07 08:23 PM

"You should pass along your feedback to the Ukrainians" Putin was a liar when Ukraine made a deal and gave up nukes. Now they call him a liar after he steals rare minerals and farmland. Would you do a deal with Putin? They trusted him. Not my fault.

#25 | Posted by Brennnn at 2025-03-07 11:57 PM

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