US Arms Export Boom Seen Continuing Under Trump

U.S. Arms Export Boom Under Obama Seen Continuing with Trump (excerpt)

WASHINGTON --- U.S. defense contractors, which saw international sales rise strongly under President Barack Obama's administration, can expect a continued boom in arms exports under Donald Trump, aided by persistent security risks in the Middle East and rising tensions in Asia and Europe.

Shares of major defense contractors, including Raytheon Co. (RTN.N), Northrop Grumman Corp (NOC.N) and General Dynamics (GD.N) hit lifetime highs, on Wednesday as investors bet on higher Pentagon spending under Trump, who has vowed a massive build-up of the U.S. military even as he pledges to reduce foreign entanglements.

While Trump has frequently made contradictory statements when it comes to foreign policy, he has repeatedly called on allies in Europe and East Asia to pay more for their own defense. Defense experts say that could benefit the domestic industry as Trump is expected to keep supporting the supply of U.S. arms exports to allies to help them build up their own defense capabilities.

"From the U.S. side it would be us equipping them to do that," said Roman Schweizer an analyst at Cowan & Co.

That would also fit with Trump's plan to stimulate the domestic economy by boosting U.S. manufacturing jobs.

A Trump administration will have "more openness to selling weapons to our allies and partners. It’s business friendly, it plays to the U.S. manufacturing base," said Mark Cancian, senior adviser at the Center for Strategic and International Studies.

U.S. arms exports, measured by production costs, grew 54 percent in 2015 from 2008, the year before President Barack Obama took office, according to the Stockholm International Peace Research Institute. That represents the highest growth for any administration since the Truman and Eisenhower presidencies following World War Two.

The boom was fueled by consistent lobbying by the Obama administration for arms deals, its policy of arming and training proxy groups in conflicts, and by budget constraints at home that prompted arms makers to look abroad for sales. (end of excerpt)

Click here for the full story, on the Reuters website.

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