According to a Reuters report, the U.S. State Department said on the 24th that U.S. military equipment sales to foreign governments surged 29% in 2024, reaching a record high of $318.7 billion, as countries seek to replenish weapons stockpiles shipped to Ukraine and prepare for a major conflict.
According to the report, arms sales data in the last year of the Biden administration supports sales growth expectations from U.S. arms manufacturers such as Lockheed Martin, General Dynamics and Northrop Grumman.
Republican Donald Trump said during the presidential campaign that allies should spend more on their countries' defense. Trump wants other NATO members to spend 5% of their gross domestic product on defense - a significant increase from the current 2% and a level that no NATO country, including the United States, currently reaches.
Defense contractors are scrambling to meet surging demand for weapons due to Russia's invasion of Ukraine. Defense departments around the world are lining up orders to bolster their stockpiles, while the United States is looking to replenish weapons and ammunition destined for Kiev.
Approved arms sales for 2024 include $23 billion worth of F-16 fighter jets and upgrades to Turkey, $18.8 billion worth of F-15 fighter jets to Israel, and $2.5 billion worth of M1A2 Abrams tank to Romania.
Orders approved in 2024 tend to be included in the backlog of U.S. weapons manufacturers. Manufacturers expect orders for hundreds of thousands of artillery shells, hundreds of Patriot missile interceptors and a surge in orders for armored vehicles to bolster their performance in the coming quarters.
There are two main ways for foreign governments to purchase weapons from U.S. companies: direct commercial sales negotiated with companies, or foreign military sales, in which a government engages Defense Department officials at its U.S. embassy. Both cases require U.S. government approval.
Direct military sales by U.S. companies increased from $157.5 billion in fiscal 2023 to $200.8 billion in fiscal 2024. Arms sales arranged through the US government increased from US$80.9 billion in the previous fiscal year to US$117.9 billion in fiscal year 2024.
