In a significant policy shift that could redefine America's defense industrial base and its global military relationships, President Donald Trump signed a trio of executive orders on April 9, 2025, targeting defense acquisitions, foreign arms sales, and maritime revitalization. These far-reaching directives aim to overhaul what the administration describes as "antiquated defense acquisition processes" while boosting U.S. military exports and revitalizing domestic manufacturing capabilities.
Restructuring Pentagon Procurement: Efficiency and Accountability
The cornerstone of these reforms is the executive order titled "Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base," which mandates a comprehensive review of the Department of Defense's procurement programs within 90 days.
"With this executive order, we're going to be modernizing the procurement structure the Department of Defense uses to allow it to more quickly adapt to changing circumstances around the world," said White House aide Will Scharf during the Oval Office signing ceremony Reuters1.
The order establishes stringent performance criteria for major defense acquisition programs, with potential cancellation for projects that are:
- More than 15% behind schedule based on the current Acquisition Program Baseline
- More than 15% over cost relative to baseline estimates
- Unable to meet key performance parameters
- Misaligned with the Secretary of Defense's mission priorities
This represents a significant departure from the traditional Nunn-McCurdy breach threshold, which has historically triggered reviews only for programs that exceed certain cost parameters Breaking Defense2.
An accompanying White House fact sheet specifically identified several troubled programs that could face scrutiny under the new criteria, including:
- The new Air Force One jets, which are reportedly five years behind schedule and billions over budget
- The Sentinel intercontinental ballistic missile system, which has seen its projected costs balloon from an initial $78 billion in 2020 to approximately $141 billion
- Nine Navy ship programs that are reportedly between one and three years behind schedule
Streamlining Arms Exports: Global Strategic Implications
The second executive order, "Reforming Foreign Defense Sales to Improve Speed and Accountability," addresses what officials describe as inefficiencies in the foreign arms sales process. The directive aims to reduce regulatory barriers, prioritize certain partners for arms transfers, and consolidate approval processes to enhance America's competitiveness in the global arms market.
According to State Department data, fiscal year 2024 saw record arms transfers totaling $117.9 billion, underscoring the economic and strategic significance of these reforms Defense One3.
The reforms include:
- Developing lists of priority partners for conventional arms transfers
- Identifying priority end-items for potential transfer to these partners
- Introducing accountability metrics and streamlining approvals
- Incorporating exportability requirements earlier in the acquisition cycle
- Creating an electronic tracking system for export license requests and Foreign Military Sales efforts
Industry response has been largely positive. Eric Fanning, president and CEO of the Aerospace Industries Association, welcomed the order, stating, "Today's Executive Order to review the defense sales system is a welcome step as American industry continues to support our nation's foreign policy objectives, deliver the best capabilities, and create high-paying jobs here at home" Breaking Defense4.
Maritime Revitalization: Addressing Naval Capability Gaps
The third component of this defense policy overhaul is an executive order focused on "Restoring America's Maritime Dominance," which sets firm deadlines for developing plans to revitalize domestic shipbuilding and address persistent delays in Navy vessel construction programs.
This initiative includes the establishment of a Maritime Security Trust Fund to provide consistent funding for maritime programs and a detailed review to be conducted with input from Elon Musk's efficiency team, dubbed the Department of Government Efficiency (DOGE) Bloomberg5.
A senior White House official indicated that the order is specifically intended to "blunt China's maritime dominance" by bolstering American shipbuilding capabilities, highlighting the geopolitical dimensions of these reforms.
International Reverberations: Allies and Competitors Respond
These sweeping changes to U.S. defense procurement and export policies are occurring against a backdrop of evolving global security dynamics, particularly in Europe, where nations are reassessing their defense postures.
The European Union has recently announced its own €800 billion ReArm Europe Plan, which aims to reduce dependence on U.S. defense systems and develop a more autonomous European defense industry Chatham House6. This initiative includes recommendations to:
- Close capability gaps in areas such as air and missile defense
- Enhance cooperation between NATO and the EU
- Reassess dependencies on U.S. defense technologies
- Create an enabling environment for defense innovation and manufacturing
This European push toward greater defense autonomy comes as many NATO members face pressure to increase defense spending to as much as 5% of GDP, a significant increase from the current 2% target Reuters7.
According to the International Institute for Strategic Studies, European defense spending jumped by 11.7% in real terms in 2024, reaching approximately €423.3 billion ($457 billion), marking the tenth consecutive year of growth IISS8.
Industry and Market Implications
The defense industry's response to these reforms has been mixed. While many defense contractors have welcomed the streamlining of arms export processes, there are concerns about the potential cancellation of major programs.
Recent market turbulence related to the Trump administration's broader trade policies has affected defense stocks, with significant volatility observed in early April 2025 CNBC9. However, industry analysts suggest that increased defense spending in Europe and expedited foreign sales could ultimately benefit major U.S. defense contractors.
Meanwhile, the global arms trade landscape continues to evolve, with the United States further increasing its share of global arms exports to 43%, while Russia's exports have fallen by 64% according to the Stockholm International Peace Research Institute (SIPRI) SIPRI10.
Challenges and Criticisms
Despite the administration's emphasis on efficiency and accountability, challenges remain. Rep. Joe Courtney has pointed out that the Trump administration's trade policies, particularly the tariffs on steel and aluminum, could "raise contract costs, delay commercial contracts and risk shipyard business," potentially undermining the very shipbuilding revitalization the executive orders aim to promote Defense One3.
Critics also question whether the 90-day review timeline for major defense acquisition programs is realistic, given the complexity of these systems and the entrenched interests within the defense establishment.
Looking Ahead: Implementation and Impact
The success of these reforms will depend largely on their implementation. Key milestones to watch include:
- The Pentagon's submission of its acquisition reform plan within 60 days
- The comprehensive review of Major Defense Acquisition Programs within 90 days
- The joint plan from the Departments of Defense, State, and Commerce on improving arms export processes within 90 days
- The recommendations for maritime revitalization within 45 days
As these deadlines approach, stakeholders across the defense sector—from major contractors to allied nations—will be closely monitoring developments to understand how these sweeping changes will reshape America's defense industrial base and its global military relationships.
What is clear is that these executive orders represent a significant shift in U.S. defense policy, with potentially far-reaching implications for America's military capabilities, its defense industrial base, and its strategic relationships around the world. In an era of intensifying great power competition and evolving security challenges, the impact of these reforms will likely be felt for years to come.
