U.S. defense contractors should consider how "emerging security cooperation shifts" could affect their programs, according to a new report from consulting firm Avascent.
"With a reinvigorated focus on adding domestic jobs and a potential reset in American defense and security relationships in Europe and Asia, the Trump Administration may portend significant changes for industry export strategies," argues the report, titled "America First? U.S. Defense Exports in the Trump Era."
Because U.S. contractors rely heavily on foreign sales, Avascent's analysis pushes for companies to take a hard look at both the potential opportunities and the challenges.
The document notes that Defense Secretary Jim Mattis is a proponent of working closely with allies.
"Equipping partner nations via expanded exports of U.S. defense equipment is a logical strategy for simultaneously upholding existing security cooperation partnerships, avoiding over-commitment of U.S. assets in expensive overseas operations, and providing the U.S. direct economic benefits," the report notes. "Partner use of U.S. defense equipment increases interoperability with U.S. forces, multiplying the operational and deterrent value of joint capabilities. Defense firms will likely find Mattis to be a key ally in supporting this long-standing argument."
But at the same time, international customers may start to look elsewhere.
"The one certainty is that emerging security cooperation doctrine will unfold differently across different markets, generating unequal impact on U.S. defense firms' country positioning," the report says. "U.S. firms must assess how they can best realign their portfolios, while evaluating how to leverage and mitigate Administration polices, to sustain and grow their international revenue."