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The Trump administration is prioritizing the defense industrial base. And for good reason.
In the wake of World War II, the most devastating conflict in modern history, Soviet leader Joseph Stalin was asked how the Allies defeated the forces of fascism. Adolph Hitler’s top generals, Stalin observed, didn’t understand that “wars are won in factories.”
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One is loath to agree with a communist dictator, one of history’s great butchers. But Stalin was right. Industrial power is often decisive. His contemporary, Winston Churchill, famously asserted that “wars are not won by evacuation.” This, of course, is true. But in modern warfare, battles and generals are seldom decisive either. To be sure, there are crucial victories and irreplaceable commanders. But Midways and Napoleons are few and far between.
Rather, most modern wars are wars of attrition, often decided — sometimes inconclusively — by which power can field the right equipment at the right place at the right time. As the famed U.S. General Omar Bradley allegedly said: “Amateurs talk strategy and professionals talk logistics.”
World War II was won thanks in no small measure to the “Arsenal of Freedom” championed by then-President Franklin D. Roosevelt and fielded to the soldiers, sailors, and airmen who did all that bravery and devotion to duty could do.
When one surveys the memoirs and writings of that conflict’s chief strategists, it is remarkable how many of them understood the importance of a powerful defense industrial base. Perhaps this is unsurprising; many had come of age during the industrialized savagery of World War I. Some, such as Dwight Eisenhower, had spent the interwar years touring factories. Others, like George Marshall, had overseen vast public works projects during the Great Depression. They knew that scale mattered and that quantity had a quality all its own.
These men have since passed into history. Last year marked the eightieth anniversary of the end of World War II. But now the United States once again confronts the specter of a great power war, this time with China, an enemy whose military and economic power outstrips previous opponents like Nazi Germany, Imperial Japan, and the Soviet Union.
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China has learned some of the lessons of World War II well, positioning itself to become the “factory of the world.” By contrast, the U.S. and its Western allies seem to have forgotten them. America’s defense industrial base is a shadow of its former self. And now the U.S. faces a deadly reckoning for its years of neglect.
America’s industrial base has been slowly hollowed out over the span of decades, part of a process of deindustrialization that began more than half a century ago. Policies enacted in the wake of the Cold War’s conclusion didn’t help.
At the beginning of the 1990s, the U.S. had more than 51 prime contractors. Now, by some estimates, it has a mere five. This is the result of a push for consolidation initiated after the Soviet Union collapsed. It was hoped that consolidation would lead to savings and efficiency. Instead, it has resulted in bottlenecks and reduced competitiveness, hindering America’s ability to produce at scale and on deadline. More competition is needed to produce the results that America needs and its warfighters deserve.
Seth Jones, a defense analyst with the Center for Strategic and International Studies and the author of a new book on revamping the DIB, has argued that America’s defense industrial base has been operating on a peacetime footing. In 2022, on the heels of a landmark study by CSIS, Jones noted that “the defense industrial base is not prepared for the security environment that now exists.” A series of war games that were conducted had the U.S. running out of key munitions in a conflict with China, such as long-range anti-ship missiles, in “less than a week.”
In the summer of 2025, when the U.S. and Israel carried out strikes on Iran, America expended an estimated 15 to 20 percent of its total supply of interceptors for the Terminal High Altitude Air Defense (THAAD) system.
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This is alarming. Not just because a war with China is a distinct possibility, but because a healthy DIB is not built overnight.
As I noted in February 2023 Washington Examiner essay: you go to war with the defense industrial base that you have, not the one that you want. By some metrics, the U.S. began ramping up for WWII as early as 1938 — more than three years before Pearl Harbor and six years before the D-Day invasion that both marked the beginning of Hitler’s end and, not coincidentally, peak U.S. wartime production.
Chinese President Xi Jinping has called for his People’s Liberation Army to be ready to invade Taiwan by 2027. During WWII, two of America’s opponents never even completed an aircraft carrier. By contrast, China today has more than 232 times America’s shipbuilding capacity. In 2024 alone, a single Chinese shipbuilder produced more ships than the United States has built in eight decades. And China isn’t building ships for just any reason.
Further complicating matters: U.S. defense manufacturing remains intertwined with its foremost foe. As Shyam Sankar, the chief technology officer and vice president for Palantir Technologies, points out in his forthcoming book Mobilize: How to Reboot The American Industrial Base and Stop World War II, nine percent of the major subcontractors to the big defense companies on Department of War contractors are Chinese.
The hour is late, and urgency is essential. As Sankar pointed out: “time is the scarcest resource we Americans have.”
This sense of urgency and lost time has compelled the Trump administration to prioritize restoring the DIB. It is no easy task.
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On February 6, the White House announced the creation of an America First Arms Transfer Strategy. The objective? To support domestic reindustrialization, strengthen critical supply chains, build production capacity, and prioritize partners that invest in their own self-defense.
America’s old arms transfer paradigm had failed, the strategy said. “Instead of leveraging our foreign defense sales to actively grow and shape our industrial base, our defense sales have historically been shaped by the priorities of our partners.” And this “resulted in an industrial base that does not function as effectively for the security of the American public as it could.”
The document is part of a broader effort undertaken by the administration to restore the DIB. In January 2025, shortly after retaking office, President Donald Trump signed an executive order aimed at modernizing defense acquisitions and cutting red tape. In April he signed another executive order aimed at improving speed and accountability in the foreign arms sale process.
In January 2026, Trump signed yet another executive order, this one prohibiting defense contractors from putting stock buybacks and excessive corporate distributions ahead of production capacity and innovation. That order called for Secretary of War Pete Hegseth to review contractor performance and identify those who are falling short. In a post on Truth Social, the president warned that “military equipment is not being made fast enough” and “the situation will no longer be allowed or tolerated.”
The president added an extra incentive: “I will not permit dividends or stock buybacks for defense companies until such time as these problems are rectified,” he wrote. The executive order called for executive compensation to be tied to “on time delivery” and “increased production.” Salaries, he warned, could be capped. Trump even called out underperforming defense companies by name.
The message is clear: business as usual won’t be tolerated. Trump is lighting a fire under defense manufacturers — and rightly so. It will require striking a careful balance.
Many defense firms have been hobbled by short-term contracts and red tape. As Secretary of War Pete Hegseth noted, the Pentagon has often been a “bad customer” and “impossible” to work with.
The Trump administration is promising investments, but it’s also asking for results. It is not going to just throw money at the problem. Some, no doubt, will dislike the strategy. Change is never easy and this is a clear break with how things have been done in the past. But that, of course, is the point. And real change will require a societal shift, as well.
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Deindustrialization hasn’t just hurt working-class Americans, it has also crippled America’s ability to protect itself. America was able to build the “Arsenal of Democracy” because, unlike today, the country had preexisting infrastructure to build from. Accordingly, any long-term solutions will require bringing more industry back home.
It is clear that there are deep and systemic issues that plague America’s DIB. Solving them will require both lighting fires and putting them out. History is clear: the future of the United States and the free world may very well depend on it.
