How the U.S. Can Make the Most of a Defense-Spending Boom

By John Noonan

Thursday, August 21, 2025

 

Driven by the aggression and arms-racing of Russia and China, President Trump has proposed the first-ever trillion-dollar defense budget, NATO allies have increased defense-spending commitments from 2 percent to 5 percent of GDP, and allies in Asia are moving to expand their own military budgets.

 

With trillions of dollars being pumped into defense, this could be the birth of a new build-up for the free world, one led by American technological innovation and reindustrialization.

 

That is, if U.S. bureaucracy doesn’t strangle it in its crib.

 

The United States leads the world in defense exports. But it also leads the world in backordered arms, delivery delays, and buyer uncertainty caused by a labyrinth in the arms-transfer bureaucracy. Split between the State Department and the Pentagon, the approval process for arms sales labors under decades of overlapping and nonsensical rules that give too many low-level career officials the ability to slow and block sales.

 

Currently, Taiwan is looking at over $20 billion in delayed defense transfers, including Stinger missiles, Harpoon systems, and fighter jets. Poland, under pressure from Russia, waited over 18 months for HIMARS — more than double the average wait time. Saudi Arabia, the UAE, and the Philippines have all seen weapons blocked by interagency disputes or political reversals.

 

And this is before our allies have begun their new outsized defense spending.

 

If the U.S. arms-sales system can’t manage the current slate of export requests, it will break under the weight of billions of dollars of new orders — or lead to their never being placed at all.

 

China and Russia will exploit such a vacuum. China dominates the global arms market by delivering drones, tanks, and missile systems faster and cheaper — with fewer conditions. Russia, even while waging war in Ukraine, continues arming rogue actors and trading on the black market. America’s allies are stuck in a slow, rule-bound process, while adversaries move with speed and flexibility.

 

The moribund arms bureaucracy also threatens to stifle the defense-tech renaissance underway in the United States. Private capital is flowing into startups reminiscent of the 1950s aerospace boom. But the Pentagon is a difficult buyer, especially for new entrants. Unless the U.S. broadens its base of foreign buyers and accelerates arms approvals, this investment flood will evaporate — leaving both deterrence and American jobs at risk.

 

The system must prioritize speed. A commonsense reform would be establishing a “trusted partners list” to accelerate arms sales to dependable allies. Eligibility could be based on threat proximity, military interoperability, and shared democratic values. Why don’t we default to “yes” in a matter of days — as opposed to years — for allies like Israel, Japan, and Australia? That the approval process treats these long-standing allies the same as countries with weak governance makes no sense.

 

Another key initiative could be a more forgiving legal framework for sending older weapons overseas, rather than scrapping them. Many decommissioned but functional U.S. platforms — like A-10 Warthogs, upgraded Humvees, and legacy drones — are scrapped rather than transferred to partners like Taiwan or Ukraine. A formal transfer mechanism could close capability gaps at little cost and reinforce deterrence.

 

The Foreign Military Sales (FMS) process also needs structural reform. Authority is fragmented across a tangle of agencies. Empowering a single senior official to unblock stalled deals and cut through red tape — and to be accountable when this doesn’t happen — would streamline decision-making.

 

Reforms should emphasize pre-negotiated contracts, so pricing and timelines are agreed to in advance. Allies shouldn’t have to start from scratch during a crisis. Having pre-cleared contracts, where allies and partners can buy as much of a defense article as they need, and expanding the Special Defense Acquisition Fund would enable the U.S. to procure weapons in advance, reducing delivery time from years to months.

 

FMS reform isn’t just about national security — it’s also an economic imperative. In 2023, America’s aerospace and defense sector exported nearly $136 billion worth of goods and supported 2.2 million jobs. Every $1 billion in defense exports supports roughly 4,000 jobs. Streamlining sales could unlock tens of thousands more, especially in regions hit hardest by industrial decline.

 

Rewriting and simplifying the laws that govern arms sales and transfers would further remove barriers to defense exports and revitalize U.S. manufacturing.

 

Congress has a vital role to play. Lawmakers could mandate a bipartisan commission to conduct a top-to-bottom review of the FMS system. Key committees in Congress should pledge to take up expedited arms sales and transfers during the 2026 legislative year, while they have the votes. Congress should also expand policies like the AUKUS-related licensing waivers for Australia and the U.K. to other trusted nations.

 

This isn’t about enriching arms manufacturers. It’s about arming democracies under threat and avoiding larger conflicts. If the U.S. fails to modernize how it arms allies, the result won’t be felt in boardrooms — it will be felt on the battlefield, borne by young soldiers fighting with outdated weapons.

 

FMS reform should be the tip of the “peace through strength” spear. America’s adversaries are building a global arms network to weaken our alliances. The choice is clear: modernize and lead — or remain the arsenal of bureaucracy.