From Détente To Armageddon: How Global Arms Economy Feeds Permanent Conflict

Global arms economy drives record sales amid Gaza, Ukraine wars; Pentagon deals hit $80bn

Islamabad | GlobalBeat

An F-35 that sells for $115 million is Paris real estate with wings. It also funds three of Washington’s top 10 contractors, every Gulf monarchy and – through offset clauses – a quiet villa in Mayfair. American export licenses for missiles, helicopters and guided bombs reached $80 billion in 2024, a 42% jump in 24 months, the State Department disclosed this week. Another $76 billion has already been approved in the first quarter of 2026.

The surge is not accidental. Defence officials told reporters during last month’s IDEX fair in Abu Dhabi that “demand is outpacing production lines for the first time since Desert Storm.” Companies booked enough new orders before March to keep missile plants running double shifts through 2029. Lockheed Martin alone lifted its backlog to $163 billion, more than the GDP of Hungary.

Washington supplies 41% of all arms sold abroad, a dominance that keeps profits flowing but also drags its diplomacy into wars it once tried to exit. “The atomised economics of arms sales mean you no longer end conflicts by calling the parties,” said retired Canadian general Andrew Leslie, now a consultant on industrial policy. “You negotiate the financing first.”

Gaza is the clearest case. In the 8 weeks that followed Hamas’s cross-border raid that killed 1,200 Israelis on 12 October 2024, the Pentagon transported 15,000 guided bombs to Israel. Almost none were drawn from US war reserve. Instead the White House activated fast-track Foreign Military Sales procedures so Tel Aviv paid up front, feeding funds back into the industrial pipeline. US firm L3Harris booked $1.2 billion from Israel between October and January, according to filings released Tuesday.

Russia’s war on Ukraine pushes the same conveyor belt westward. Biden ended his term having committed $62 billion in weapons and credits; Trump signed the 2026 supplemental in February that adds another $60 billion. Of that, roughly half returns as revenue to Raytheon, General Dynamics and Northrop. Air-defence interceptors that cost the Pentagon $3.4 million apiece have disappeared into the skies above Kyiv at the rate of 800 a month. Replacement orders carry supplemental mark-ups, confirming profit margins above 20%.

European states, spooked by Trump’s suggestion that US troops might leave NATO lands, have tripled orders separately. The continent’s combined defence budget jumped to $305 billion in 2025, according to the European Defence Agency – beating every year since the Cold War. Merkel’s Germany kept a pacifist cap on military exports for a decade; Chancellor Friedrich Merz has quietly deleted it. Berlin approved €10.5 billion in export licenses last year, a figure officials say will “at minimum double” for 2026.

Gulf monarchies round out the customer list. Saudi Arabia booked $13 billion in US deliveries during 2024, mostly guided missiles for border skirmishes with Houthi drones. The UAE, already fielding French Rafales and Korean Surion choppers, signed provisional papers to buy 80 F-35 aircraft in a deal largest than Qatar’s 2023 record purchase. Paris-based think-tank Observatoire de l’Armement calculates the public cost of a single F-35 sortie in the Gulf at $51,000, roughly the annual wage of an Indian guest worker who cleans the base dormitories.

Even nations historically wary of arms addiction are cloning the model. Vietnam’s parliament in January authorised a five-year credit line of $12 billion for Western fighters and submarines; Hanoi has never acknowledged buying a single foreign combat jet. The Philippines, angered by China’s reef grabs, ordered 32 BrahMos cruise missiles from India in a bargain $375 million package that New Delhi quietly financed through a 12-year commercial loan at 2% interest. Arms don’t just kill enemies. They bind buyers into fiscal alliances.

Globally these transfer packages evade domestic scrutiny because each is coded as government-to-government trade. Health budgets get debated line by line; missiles move under press releases the Pentagon issues 20 minutes before midnight. When the US Congress receives formal notification it must vote within 30 calendar days. Most sales clear without hearing rooms, leaving campaign-season debates about “healthcare for all” while Lockheed raises sales guidance again.

Background

The post-1945 arms export architecture was meant to be temporary. The Washington Treaty of 1949 let the United States station forces in Europe while European governments re-tooled civilian factories. By 1953 NATO nations instead sought US hardware off the shelf, and Congress masked the cost as “mutual security.” Cold War détente of the 1970s slowed marketing briefly, but Reagan’s 1981 revival coined the phrase “security assistance,” turning aid into export loans for F-16 Falcons and M-1 Abrams. The Soviet collapse did not freeze sales; it just added NATO ex-Warsaw customers. Between 1992 and 2000, the US shipped $107 billion worth of equipment to former adversaries at prices later written down for budget support.

In the Middle East, Nixon’s 1973 airlift to Israel set the template for expeditionary arms. American-built jets reborn under Israeli colours demolished Arab tanks, creating showroom footage the Pentagon replayed to Eurasian buyers. The 1979 Egyptian peace treaty transferred Cairo from Soviet MiGs to US F-16s in under 5 years, paid for with Saudi oil money routed through Washington. The Gulf War of 1991 then broadcast the lethality nightly; within a decade, every sheikhdom coveted precision guidance kits. By 2005 the region imported 31% of global weaponry, a share that has now reached 36% despite the Shale boom.

What’s Next

Trump is expected to publish a new Conventional Arms Transfer policy before July that expands eligibility for surplus drones and ships around the South China Sea. That could add another $40 billion in offered sales by year-end. At the same time the European Union wants to pool contracts for 1,000-kilometre strike missiles. Requests for proposals go out in September; only European consortia may bid, squeezing US firms unless production lines move across the Atlantic. Separately India’s Defence Acquisition Council meets in August to decide whether to double its own export target to $6 billion, aiming to feed the same Indo-Pacific anxieties.

The financial logic looks unshakeable until stockpiles run bare. The Pentagon’s most recent audit shows high-end missile motors at 1.6 months of supply in a peer war scenario, below the eight-month buffer set in 1988. Congress may yet demand projections before approving any 2027 supplemental for Ukraine or Israel. “We’re trading deterrence three weeks at a time,” said analyst Jim Townsend, formerly Obama’s deputy assistant defence secretary. Until then the factories keep humming, and the list of active wars grows with every shipment manifest.