In recent years, there has been a noticeable shift in the Gulf towards purchasing non-American major defense articles. While U.S. defense goods remain popular, the emergence of new market players, the growth of domestic defense industries, and political conflicts are challenging U.S. dominance. Factors such as competitive prices, desire for diversification, and political decisions by the U.S. government have influenced this trend. Countries like Saudi Arabia and the UAE are increasingly doing business with European and South Korean companies, but the U.S. still has opportunities to reverse this trend.
- Shift to Non-US Defense Articles: Over the past four years, the Gulf region has shown a growing tendency to purchase defense equipment from non-U.S. sources, such as European and South Korean companies. Despite this, regional experts believe there’s no coordinated policy to shift away from U.S. defense firms.
- Reasons for Diversification: Major factors for this shift include cheaper and more competitive prices from non-U.S. sources, the desire to diversify weapon sources, and U.S. political positions that sometimes complicate defense sales. However, the U.S. remains a significant player, accounting for notable percentages of arms exports to various Gulf nations.
- Increasing Presence of European and Asian Companies: Companies such as the Spanish shipbuilder Navantia and South Korea’s defense industry are gaining footholds in the region, with deals that include building warships and supplying air defense systems.
- Political Stance of the U.S. Affecting Deals: U.S. policies and political decisions, such as pulling out Patriot missiles from Saudi Arabia and freezing the F-35 deal with the UAE, have led to alternatives being sought. This includes Saudi Arabia purchasing South Korean air defense options and the UAE signing a contract for Rafale fighters with France.
- Potential for U.S. to Reclaim Market: Despite these challenges, there is potential for the U.S. to regain its stronghold in the region. Easing export controls or approving specific sales could lead to U.S. companies seeing a cash windfall. The existing interest in U.S. defense systems, such as the Patriot and THAAD missiles, indicates that the market is still accessible for American firms.