Trump Makes Weapons Exports a Cornerstone of His Economic Policy

Arms ‘R’ U.S.: Trump Makes Weapons Exports a Cornerstone of His Economic Policy

President Trump gave a green light to turbocharging overseas military sales April 19. Given that the U.S. is, by far, already the globe’s biggest weapons peddler, this might seem akin to Amazon crushing Barnes and Noble because it fears the competition. But under the Trump administration, weapons sales aren’t designed to keep the peace overseas so much as they are intended to keep defense-industry execs fat and healthy, with enough scraps left over to put on the dinner tables of those who bend metal for them.

In a memorandum, Trump said the while the changes are needed to increase U.S. security, they’re also needed to create jobs at home, to reduce the trade deficit, to spark military innovation and to reduce the need to send U.S. troops to world hotspots. He pledged that instead of acting as reins on the spread of weapons, the U.S. government will become partners with the U.S. defense industry’s mercantilism.

“The White House approach to overseas arms sales seems to be driven as much by economic and trade considerations as by security concerns,” says Loren Thompson (no relation), who heads the Lexington Institute think tank, which is partly funded by defense contractors. “Congress is more likely to object to arms sales on the basis of security concerns than the White House.”

Under the Trump administration, weapons sales aren’t designed to keep the peace overseas so much as they are intended to keep food on American dinner tables.

Trump initiated the push by reducing restrictions on U.S. drone sales around the world in the real battle: the fight for war-machine market share. The first major change (more are promised later this year) allows U.S. defense contractors to sell unmanned aircraft, perhaps the Pentagon’s biggest post-9/11 innovation, directly to allies without jumping through previously-required hoops at the Pentagon, State Department and Congress.

The nation’s biggest defense contractors, including Boeing, Lockheed, Northrop Grumman and Raytheon all will benefit from the changes (Marillyn Hewson, the top executive of Lockheed, the Pentagon’s top contractor, attended the White House state dinner for French president Emmanuel Macron five days after Trump’s announcement).

“Under this administration, there will be no prouder and more active advocate for U.S. sales than the U.S. government itself,” White House trade chief Peter Navarro pledged. In fact, the Pentagon’s top weapons buyer said that weapons built from the ground up for export are ideal. “If industry can design systems initially to be exportable, that's great," Ellen Lord said in Washington April 24 following the launch of the Defense and Aerospace Export Council at the U.S. Chamber of Commerce (when there’s money to be made, groups like this tend to pop up in Washington like mushrooms after a spring rain).

This is just the biggest act in Trump’s long-running “buy our weapons” show. During a visit to Japan last November, he publicly lobbied Prime Minister Shinzo Abe to buy more American weapons. In January, he sealed a Boeing jet-fighter deal during a long-distance phone call with the emir of Kuwait. In March, he displayed charts crammed with U.S. military hardware being bought by Saudi Arabia during an Oval Office visit by Crown Prince Mohammed bin Salman: “The THAAD [air-defense] system—$13 billion; the C-130 airplanes, the Hercules, great plane—$3.8 billion; the Bradley Vehicles—that’s the tanks [actually, Mr. President, any soldier will tell you they’re armored fighting vehicles]—$1.2 billion; and the [sub-hunting] P-8 Poseidons—$1.4 billion,” Trump said. “We’re talking about over 40,000 jobs in the United States.” (The crown prince reportedly was not pleased playing Trump’s political prop.)

But, however many jobs are created, they’re far fewer than those generated in almost any other form of government spending. Even the Commerce Department, just a hop across the Potomac from the Pentagon, estimates that while $1 billion in weapons exports would “create or sustain” 3,918 jobs, a billion-dollar basket of all kinds of exports would lead to 5,700. That works out to $255,232 per defense-industry job, compared to $175,439 for her civilian counterpart—A 45 percent premium.

The Trump White House views its support for defense exports as a way to bolster the U.S. economy, including the floundering steel and aluminum industries. By spreading out costs over a greater number of aircraft or tanks, they claim they can save U.S. taxpayers some money (even if Washington often lets foreign governments ignore the legal requirement that they pay their fair share of a weapon’s development).

But there are downsides, as well.

“U.S. arms sale policy is out of control,” argue A. Trevor Thrall and Caroline Dorminey in a paper last month for the CATO Institute, a libertarian think tank where they study the arms trade. “The economic benefits of arms sales are dubious and that their strategic utility is far more uncertain and limited than most realize.” The weapons’ utility in preventing wars or substituting for U.S. boots on the ground is mixed, at best. U.S. troops fighting ISIS in Iraq confronted American weapons sold to Baghdad that ended up in enemy hands. The spread of armaments is never a good thing. It sucks funding away from life-giving investments in health, education and other forms of development. “The United States has historically done very little to consider the long-term negative consequences of arms sales,” Trall says.

Thrall fears that Trump’s action will make things worse. “Sales to `risky’ clients will almost certainly increase—witness Trump’s enthusiasm for dealing with Saudi Arabia,” he notes. “More frequent negative consequences are the likely result.”

While greasing the skids to accelerate weapons sales overseas, the Trump administration plays down concerns that the further spread of sophisticated arms could lead to instability and war, or that they could fall into the wrong hands. Besides, they argue, if we don’t sell them, Russia or China will. Moscow and Beijing are “beating us to some of our customers,” Lord said at that Chamber of Commerce confab.

There’s nothing wrong with a robust defense industry. It’s vital to keeping the U.S. safe. But having the government turn on its afterburner to generate American sales suggests there is a need to do so. Yet U.S. defense contractors accounted for 34 percent of the world’s weapons exports from 2013 to 2017 (last year alone, U.S. firms exported arms worth $153.7 billion). Washington sold arms to 98 nations, about half the world, over that five-year span, according to the Stockholm International Peace Research Institute. Russia was a distant second at 22 percent, with China logging 5.7 percent.

Pretty much every recent U.S. president has been a silent partner in American defense contractors’ overseas efforts. Jimmy Carter was the notable, and telling, exception. “I am particularly concerned by our nation's role as the world's leading arms salesman," Carter said during his successful 1976 campaign against incumbent Gerald Ford. “The United States cannot be both the world's leading champion of peace and the world's leading supplier of the weapons of war.” But such restraint crumbled following pressure from supporters of Israel and the U.S. arms industry, and hasn’t been seen at the White House since.

“Trump is following an administration that set a record for new agreements under the Pentagon's Foreign Military Sales Program, so he is not the first to make arms sales promotion an integral part of foreign policy,” says William Hartung, who heads the Arms and Security Project at the Center for International Policy. “He's just doubling down, doing it in a louder, more blatant fashion.” And, Hartung adds, Trump often takes credit for overseas weapons sales approved by President Obama but delivered after he left office.

When Carter was president, the U.S. faced less competition in the world’s weapons bazaar. But there was also a strong American civilian manufacturing economy, which has withered as Washington won its global fight for free trade and capitalism. That’s why the backside of my iPhone says “Designed by Apple in California” but also “Made [definitely not by Apple] in China.” As the U.S. has steadily lost its edge in non-military wares, like automobiles and electronics, our vanquished World War II foes like Germany (Volkswagen) and Japan (Sony) have helped sate U.S. consumers’ appetites.

It’s frankly wishful thinking that cranking out $100 million fighters for overseas customers is going to reverse this trend.

But it’s better than nothing—at least in the short term—for some. “If you thought things couldn't get any better for the U.S. defense industry, guess again,” the Lexington Institute’s Thompson wrote for Forbes (“The Capitalist Tool”) the day after Trump’s announcement. “It just did."

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