Defense manufacturers set to win big under Trump budget

Trump's new defense spending increase will call for the production of 2 additional Ford-class aircraft carriers. Image courtesy of US Navy.
Trump's new defense spending increase will call for the production of 2 additional Ford-class aircraft carriers. Image courtesy of US Navy.

US President Donald Trump has unveiled a new budget this week which promises to be a boon for defense manufacturers in the country.

All up the budget allots a total of $639bn in defense spending for 2018, representing an increase of $52bn on the previous year.

The money will reportedly be used for a number of different programs, including increased purchases of aircraft and an expansion of the country’s navy.

In order to allow for this increase, the Trump Administration plans on cutting funding to a wide range of government programs funding social services, education, and the arts.

New jets, helicopters & missiles

One primary focus of the new beefed-up military budget will be the acquisition of new aircraft for the US Air Force.

While Trump has publicly clashed with major players in the Aerospace industry such as Lockheed Martin and Boeing over the cost of their aircraft, such concerns appear to have been overwrought.

Reportedly the US will speed up its acquisitions of the hugely expensive F-35 Lightning II stealth fighter manufactured by Lockheed Martin, as well as buy additional F/A-18 fighters, and P-8 submarine-hunting aircraft from Boeing.

Additional money will be spent on the THAAD missile defense system, and Black Hawk helicopters also manufactured by Lockheed Martin.

Both companies have seen their stock price rise immediately following the budget being made public.

Naval expansion

Another major allocation for the increase in spending is to revitalize the US Navy by increasing the production of new warships.

Among this is an increased production of the difficulty-plagued Littoral Combat Ship, a new version of the DDG destroyer, and an increase in the number of planned Ford-class aircraft carriers from 10 to 12.

The major winners from this increase in warship production will be General Dynamics, and Huntington Ingalls Industries.

Given the controversial cuts proposed to implement this budget, as well as Republican disagreement on its contents, it is still far from confirmed that the final budget will pass containing all of the proposed spending.