Global Defence: Industrial Policy & Procurement Realignment

13 February 2026.

The proposed catalogue of priority systems for allies introduces a new dynamic into transatlantic defence trade. If implemented assertively, it could reshape purchasing patterns, tighten delivery expectations and increase political tension around sovereign capability decisions.

In the United Kingdom, efforts to accelerate innovation and widen access to private capital continue. However, delays to the New Medium Helicopters programme underscore persistent structural challenges in procurement timelines and in maintaining domestic capability continuity.

Together, these developments signal a market that remains robust but is increasingly defined by manufacturing alignment, production resilience and political leverage.

Market Activity

United States: America First Arms Transfer Strategy

President Trump has signed an Executive Order titled Establishing an America First Arms Transfer Strategy. The stated objective is to “ensure that future arms sales prioritize American interests by using foreign purchases and capital to build American production and capacity.”

The document makes clear that “it is the policy of the United States to intentionally use arms transfers as a tool of American foreign policy.” It further specifies that purchases and transfers should be used “to increase production and build production capacity for weapons and platforms” deemed most operationally relevant under the National Security Strategy.

This language signals a structural shift. Historically, procurement has reflected Department of Defense requirements. The new framework places comparable emphasis on expanding domestic manufacturing depth, strengthening strategically relevant output, and reinforcing the resilience of the defence production base.

Foreign capital is positioned not simply as revenue but as an instrument to strengthen domestic manufacturing capacity. The policy also highlights incentivising “new entrants and nontraditional defense companies,” indicating an intention to widen participation across the supply chain.

Within 120 days, the Secretary of Defense must submit a catalogue of prioritised platforms and systems that the United States will encourage allies and partners to acquire. The list will be aligned to the criteria set out in the strategy.

The commercial implications are significant. A formalised catalogue creates a structured mechanism through which selected systems can be advanced in allied procurement decisions. Defence purchasing has, at times, been influenced by alliance dynamics as much as operational assessment. Historical examples such as the Lockheed F-104 Starfighter programme and, more recently, the multinational F-35 Joint Strike Fighter programme illustrate how political alignment, industrial participation and capability choices can become closely linked.

The practical impact will depend on which systems are prioritised and how assertively the catalogue is promoted through diplomatic and defence channels. For states seeking greater industrial autonomy, including several European countries and Canada, procurement decisions may become more politically sensitive. Australia, particularly in the context of AUKUS submarine timelines, will assess future acquisition choices within this evolving framework.

Visiongain Insight: The strategic importance of this policy lies not in immediate export uplift, but in how it integrates industrial policy with alliance economics. If executed consistently, competitive advantage may shift from price and delivery alone to demonstrable contribution to US production capacity and supply chain resilience. For prime contractors and tier suppliers, alignment with national capacity priorities could become a defining factor in long-term programme access.

United Kingdom: Procurement Delays and Innovation Initiatives

The UK Ministry of Defence has yet to announce the outcome of the £1 billion New Medium Helicopters competition, for which Leonardo Helicopters remains the sole bidder.

Leonardo has indicated that continued delay could force closure of its Yeovil facility, placing approximately 3,000 jobs at risk. The Ministry of Defence has stated that a decision will be made by the end of March.

The situation highlights a recurring structural weakness in UK defence acquisition: uncertainty over timelines and their consequences for domestic capability continuity. When major contracts stall, supplier confidence weakens, workforce planning becomes unstable and domestic capability is placed under pressure.

In parallel, the government is broadening participation in the defence market and attracting institutional capital. The Ministry of Defence recently hosted its first defence-focused “Dragons’ Den” style showcase, bringing together 10 dual-use SMEs with more than 100 venture capital and institutional investors alongside defence stakeholders.

Held at Grant Thornton UK, the event formed part of commitments under the Strategic Defence Review and Defence Industrial Strategy to unlock billions in private funding and simplify acquisition pathways. Dual-use technologies, spanning civilian and military applications, were positioned as central to strengthening the UK innovation base and reinforcing its contribution within NATO.

These initiatives sit alongside plans to deliver the largest sustained increase in defence spending since the end of the Cold War, reaching 2.6 percent of GDP from 2027.

However, improved access to finance does not automatically translate into sustained production stability. Without clearer procurement discipline and faster transition from demonstration to contracted production, innovation efforts risk remaining episodic rather than systemic.

Visiongain Insight: The contrast between the helicopter delay and the innovation showcase is instructive. The UK is attempting to expand its domestic defence manufacturing base while still grappling with execution reliability in legacy acquisition processes. Sustainable market growth will depend less on headline funding commitments and more on the ability to convert political intent into predictable contract flow and long-term production stability. For industry participants, confidence in delivery timelines may prove as critical as access to capital.

Market Outlook

The defence market remains supported by sustained security demand and long-term capability modernisation. However, acquisition models among major powers are undergoing adjustment.

In the United States, export policy is increasingly aligned with domestic manufacturing depth and allied purchasing behaviour. In the United Kingdom, efforts to widen market participation sit alongside continued pressure to stabilise programme delivery and protect sovereign capability.

These developments go beyond procedural reform and reflect a deeper reordering of procurement priorities. As buying models evolve, competitive dynamics shift. Prime contractors and tier suppliers must now demonstrate not only technical strength but also delivery credibility, production scalability, and alignment with national strategic objectives.

Opportunity is expanding, but so is execution risk. Firms that can provide assured capacity, resilient supply chains, and predictable timelines will be better positioned to capture new contract flow.

Over the next twelve months, allied responses to the forthcoming US systems catalogue will be a key determinant of market direction. Longer-term outcomes will depend on how effectively policy ambition is translated into consistent contracting behaviour.

Visiongain Insight: Defence growth is no longer driven solely by budget expansion. It is increasingly shaped by sovereign manufacturing priorities, production resilience and geopolitical alignment. Market leadership will favour organisations that understand this convergence and can operate confidently at the intersection of policy, production and performance.

Related Visiongain Market Reports

Visiongain market reports provide the detailed data and forward-looking insight needed to evaluate funding priorities, capability development, and execution risk in defence markets. Research is evidence-based and analyst-led, supporting informed decision-making across procurement, industrial planning, and long-term strategy.