U.S. military equipment sales to foreign governments jumped 29% in 2024, reaching a record $318.7 billion, according to the State Department. Countries ramped up purchases to restock supplies sent to Ukraine and prepare for potential large-scale conflicts.
The Biden administration's final-year figures reinforce expectations of strong performance for U.S. defense manufacturers like Lockheed Martin, General Dynamics, and Northrop Grumman. Analysts predict their shares will rise in response to increasing global instability, according to Reuters.
During his campaign, now President Donald Trump called on U.S. allies to invest more in their defenses. He proposed raising NATO’s defense spending target to 5% of GDP, a significant increase from the current 2% goal—a level no NATO member, including the U.S., currently meets.
The demand for weaponry has surged due to Russia’s full-scale invasion of Ukraine, putting pressure on defense contractors to keep up. Governments worldwide are submitting orders to bolster their military stocks, while the U.S. works to replenish its own supplies sent to Kyiv.
The State Department described arms sales and transfers as "important U.S. foreign policy tools with potential long-term implications for regional and global security."
Notable 2024 deals included $23 billion in F-16 jets and upgrades for Turkey, $18.8 billion in F-15 fighter jets for Israel, and $2.5 billion in M1A2 Abrams tanks for Romania.
Many of these orders contribute to the growing backlog for U.S. defense companies. Future quarters are expected to benefit from orders for hundreds of thousands of artillery rounds, Patriot missile interceptors, and armored vehicles.
Foreign governments procure U.S. arms through two primary channels: direct commercial sales negotiated with defense companies or foreign military sales coordinated via the U.S. government, often through Defense Department officials at embassies. Both methods require government approval.
Direct commercial sales reached $200.8 billion in fiscal 2024, up from $157.5 billion in 2023. Meanwhile, government-facilitated foreign military sales rose to $117.9 billion, compared to $80.9 billion the previous year.
The Kyiv Independent news desk
(Updated: )
