Military production and offshoring to allies is at an all-time high and only increasing. Reject militaristic pessimism---it all comes from defense junkies.

The U.S. transferred a record $80.9 billion worth of military equipment and services to other countries in fiscal 2023, a 55.9 percent increase over the fiscal 2022 level of $50.9 billion, according to the U.S. State Department.

“This is the highest annual total of sales and assistance provided to our allies and partners,” a State Department release said.

The total marks progress in State’s goal of accelerating FMS cases after an internal review last year of how the process could be sped up.

Of the overall figure, $62.25 billion was funded by “U.S. ally and partner nations,” while the rest was financed by the U.S. The roughly $18 billion remainder includes about $4 billion through the foreign military financing program and $14.68 billion for State Department programs such as anti-narcotics trafficking enforcement and de-mining operations, as well as the Pentagon Defense Building Capacity programs such as the Ukraine Security Assistance Initiative.

From 2021-23, FMS sales averaged $55.9 billion per year, a 21.9 percent increase over the 2020-22 average of $45.8 billion per year.

The State Department provides this three-year rolling average because of the “multiyear implementation timeframe for many arms transfers and defense trade cases,” it noted in its release.

Poland was the single largest FMS customer in fiscal 2023, with over $30 billion in transfers.

Prominent examples of FMS sales in 2023 included:

Poland: AH-64E Apache attack helicopter, $12 billion

Poland: High Mobility Artillery Rocket System (HIMARS), $10 billion

Germany: CH-47F Chinook Helicopters, $8.5 billion

Australia: C-130J-30 air transports, $6.35 billion

Canada: P-8 maritime patrol aircraft, $5.9 billion

Czech Republic: F-35 fighters and munitions, $5.62 billion

Republic of Korea: F-35 fighters, $5.06 billion

Poland: Integrated Air and Missile Defense Battle Command System, $4.0 billion

Poland: M1A1 Abrams Main Battle Tanks, $3.75 billion

Kuwait: National Advanced Surface-to-Air Missile System (NASAMS) Medium-Range Air Defense System (MRADS), $3.0 billion

Germany: AIM-120C-8 Advanced Medium-Range Air-to-Air Missiles (AMRAAM), $2.90 billion

The State Department also provided figures for Direct Commercial Sales, which are not managed by the FMS program but which require congressional approval. The total of licensed Direct Commercial Sales from U.S. companies to foreign customers was $157.5 billion in fiscal 2023, a 2.5 percent increase from the $153.6 billion recorded in fiscal 2022.

The three-year rolling average for DCS was $124.9 billion, a 16.5 percent change from the previous three-year period.

DCS “includes the value of hardware, services, and technical data authorized from exports, temporary imports, re-export, re-transfers and brokering,” according to a State press release.

State also noted that the number of DCS cases adjudicated rose six percent in fiscal 2023 versus 2022, from 22,138 to 23,474. The “Total Licensed Entities” involved also rose 2.9 percent, reflecting a wider defense industrial base doing defense business.

Prominent examples of DCS sales in 2023 included:

Italy: F-35 wing assemblies and sub-assemblies, $2.8 billion

India: GE F414-INS6 engine hardware, $1.8 billion

Singapore: F100 engines and spare parts, $1.2 billion

South Korea: F100 engines and spare parts, $1.2 billion

Norway/Ukraine: NASAMS, Norway and Ukraine Ministries of Defence, $1.2 billion

Saudi Arabia: Patriot Guided Missiles, $1 billion

US support for Ukraine has strengthened the DIB – ensures financial security for DIB Hoffman et al 24 (Elizabeth Hoffman, currently serves as the director of congressional and government affairs and fellow at the CSIS, was director for government relations at the National Endowment for Democracy (NED), spent two years as a senior professional staff member on the House Committee on Homeland Security, and held numerous positions in the House, “How Supporting Ukraine Is Revitalizing the U.S. Defense Industrial Base”, article for CSIS, April 18, 2024, https://www.csis.org/analysis/how-supporting-ukraine-revitalizing-us-defense-industrial-base)

Public skepticism of continued assistance has increased with each vote. Almost half of Americans are concerned that U.S. taxpayer dollars are going to fund Ukraine’s war while domestic issues continue to fester; other analysts have highlighted the impact of weapons transfers on the ability of the United States to deter and defend adversaries should other conflicts occur in the near term—such as a Chinese invasion of Taiwan. These concerns miss the point. The $113 billion spans agencies and bureaus and provides for much-needed support in areas including military equipment, migration and refugee assistance, energy, and countering disinformation. The majority of the assistance has gone to support the military response to the invasion, with nearly $62 billion allocated to the Department of Defense. Additionally, nearly half of the $9.9 billion allocated to the Department of State has gone to the Foreign Military Financing program, which enables partner countries to purchase military equipment or services from the United States. The two primary mechanisms through which the United States is sending military support to Ukraine include presidential drawdown authority (PDA) and the Ukraine Security Assistance Initiative (USAI). PDA allows for the rapid transfer of weapons and defense services directly from U.S. stocks in the face of unprecedented crises. The value of equipment transferred to Ukraine under PDA is not a part of the $113 billion appropriated by Congress. Since PDA uses existing weapons stockpiles, this equipment has long been paid for, and in some cases has been sitting in U.S. warehouses for decades. As such, the value of the defense articles is assessed using what is called the “net book value,” or the historical cost of the equipment minus depreciation based on use life. As of December 2023, nearly $24 billion worth of equipment had been transferred to Ukraine from stockpiles under PDA. The benefit of PDA transfers to the United States has been the ability to clear out old stock and replace it with newer, more modern equipment. As old equipment leaves the warehouses, substantial sums have been appropriated to replenish U.S. stockpiles that have been drawn down. As of November 2023, $25.9 billion had been appropriated, of which $16.8 billion had been obligated to replace equipment taken directly from U.S. inventories. Typically, and according to statutory authority, these items are not replaced with exactly the same systems; they frequently include older models that may no longer be in production and may no longer represent leading-edge capabilities. However, replacement and replenishment strategies are critical to ensuring that U.S. stockpiles are prepared for future conflict. The second mechanism through which the United States has provided military assistance to Ukraine is through USAI, which allows the Ukrainian government to contract directly with U.S. industry, such as Lockheed Martin or RTX, for weapons procurement. The challenge for Ukraine with this approach is the timeline, as weapons manufacturing takes months or years. Ukraine is expending systems such as 155 mm ammunition at a very high rate, and current production rates and the long time required to ramp up production will mean that they do not have the requisite capabilities for self-defense. USAI will likely be most useful in refreshing Ukraine’s stocks postwar. Congress has obligated $10.5 billion for USAI, bringing total obligations, including PDA, to over $27 billion. Regardless of the funding mechanism—whether replenishment for PDA or for USAI—this money flows into the United States’ DIB. This has direct, and substantial, impacts on what the DOD has identified as “prime vendors and critical suppliers in 37 states.” The map below demonstrates the massive influx of funds into the DIB since January 2022, shortly before the inception of the war, by identifying parts of the DIB relevant to restocking or future manufacturing for transfers to Ukraine. This map includes all contract funding for relevant systems and munitions, not just those destined for Ukraine, and thus shows the extent of the full demand signal bolstering the U.S. DIB. This map shows funding by congressional district, not to draw attention to specific members of Congress, but because this distinction is made in DOD contracting documents and allows for greater specificity than showing investment by state.