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Thursday, March 06, 2025
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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