On February, 6, 2026, the White House published a new executive order (EO) titled “Establishing an America First Arms Transfer Strategy.” The EO is intended to leverage the United States’ position as the world’s leading manufacturer of military equipment as a tool to advance foreign policy objectives and reindustrialize domestic armaments production.

Contrary to the EO’s title, it is not the new strategy. Instead, the EO outlines the objectives of a new forthcoming strategy and streamlines the defense sales process while enhancing “accountability and transparency throughout the arms transfer enterprise.”

Key Points

The EO enumerates numerous reporting deadlines related to policies and procedures the Department of War (DOW), along with the Departments of State and Commerce, are instructed to implement. Here are the key points concerning those policies and procedures that industry needs to know:

• The overarching purpose of the EO, as well as the pending strategy, is to use both the revenue generated from Foreign Military Sales (FMS) and capital provided by foreign investors to build production and capacity that “supports our military and our allies and partners, especially as we increase burden-sharing.”
• The DOW is to use arms sales and transfers to increase production and build production capacity for weapons and platforms that the Secretary of War (SOW) determines to be the most operationally relevant for executing the latest National Security Strategy.
• Revenue from foreign purchases will support domestic reindustrialization, expand production capacity, and improve the resilience of the United States defense industrial base. At the same time, the infusion of capital will promote innovation and competition by incentivizing new entrants and nontraditional defense companies to participate.
• Arms sales and transfers will be used to build critical supply chain resilience and avoid backlogs producing priority components and end-items.
• The EO prioritizes arms sales and transfers to partners that have invested in their own self-defense and capabilities, have a critical role or geography in United States’ plans and operations, or which contribute to American economic security.
• The SOW is instructed to submit a sales catalog of prioritized platforms and systems that the United States shall encourage allies and partners to acquire. The sales catalog shall be based on criteria identified in the presumably forthcoming America First Arms Transfer Strategy.
• The SOW will also identify FMS and Direct Commercial Sales opportunities that support the strategic objectives of the America First Arms Transfer Strategy and growth of the United States defense industrial base.
• The DOW will develop an industry engagement plan to enable the United States Government to fully coordinate with American stakeholders while executing the America First Arms Transfer Strategy.
• The DOW will develop clear criteria for determining which weapons, platforms, or capabilities require Enhanced End-Use Monitoring (i.e., how allies are using U.S. weapons). An End-Use Monitoring Coordination Group will be formed to improve the effectiveness and coordination of end-use monitoring activities at the DOW, State, and Commerce.
• Third-Party Transfer (TPT) processes will be reviewed and a plan submitted to the President through the Assistant to the President for National Security Affairs to reduce and potentially realign the onerous TPT process. Due consideration will be paid to the security risks related to transferring weapons and technology to foreign partners and/or allies.
• A process will be developed to provide advanced notice to allies and partners of upcoming contracting actions and associated deadlines for FMS Letter of Offer and Acceptance implementation.
• A “Promoting American Military Sales Task Force” will be formed to implement the America First Arms Transfer Strategy and enhance accountability and transparency throughout the arms transfer enterprise.
• Quarterly performance metrics on FMS case development and execution will be created.

U.S. Foreign Military Sales Statistics FY 2022-2024

The latest data shows that U.S. FMS peaked at just under $109B in FY 2024, with growth rising approximately 119% over those three fiscal years. If the trend holds, total sales in FY 2025 should be even higher.

When it comes to the top ten FMS buyers, the data looks as follows.

These ten buyers accounted for $64.5B in FY 2024, or 59.3%. Given the size of American FMS, it is understandable why the Trump Administration wants to maximize the use of this revenue to bolster supply chain security and increase industrial production.

Market Implications

The new EO supports the defense contracting market and has far-ranging implications for industry partners.

• Weapons manufacturers will benefit most directly from generating higher revenue that can be reinvested in production facilities and processes.
• Producers of critical raw materials will see increased investment, enabling the expansion of mining operations and the capacity to produce more steel, aluminum, etc.
• Companies that have never previously worked as government contractors could be incentivized to offer valuable goods and services to the DOW for the first time.
• Companies that have never sold internationally could open themselves to new markets, business opportunities, and foreign investment.
• Contractors could be employed to support end-user monitoring, either by providing personnel or analytics capabilities.