As Election Day approaches, what a Trump-Harris presidency will (and won’t) mean for defense

WASHINGTON — Americans will head to the polls Tuesday to vote for either Vice President Kamala Harris or former President Donald Trump in an election where national security has taken a backseat to domestic issues such as the economy, immigration and civil rights. abortions.

Neither Harris nor Trump provided details about their defense priorities or the budget it would require to implement them. But both spent four years in the White House, leaving plenty of clues about how they might lead the world’s most powerful military.

And while analysts told Breaking Defense that a Trump administration would likely be more unpredictable on defense policy compared to the relative continuation of the Biden administration’s priorities under Harris, they also said that just as important, if not more important, will be which party will control the House of Representatives. Congress, which sets the defense budget.

“We have a much wider range of uncertainty when it comes to Trump,” said Todd Harrison, a defense budget expert at the American Enterprise Institute. “Under Trump, we could see a huge shift in strategy that becomes much more isolationist, which could ultimately lead to major changes in the defense budget and sharp reductions in force structure.”

At the same time, Harrison added, “the composition of Congress, and especially the composition of the House of Representatives, I think will actually matter much more to the future of the defense budget than whoever the president is.”

Meanwhile, public comments from industry executives suggest they are confident the demand signal for their products will remain strong no matter what happens next week.

With four days left until America votes for its next leader, here are the key factors at play.

For Trump, uncertainty and international skepticism

The Republican platform includes a promise to “prevent World War III, restore peace to Europe and the Middle East, and build a great Iron Dome missile shield over our entire country.” Trump repeated these statements throughout the campaign, potentially setting the stage for increased investment in missile defense.

At the same time, he questioned whether the United States should remain in NATO, a long-standing subject of skepticism for the former president, who criticized alliance members for failing to meet a defense spending commitment of 2 percent of GDP.

Trump has also signaled he would oppose further military aid to Ukraine unless it enters peace talks, and said in September that Ukraine had to make “concessions” to Russia to avoid war, the Associated Press reported.

RELATED: Zelensky pleads with US to continue aid to Ukraine amid election uncertainty

During a rally in Madison Square Gardens on Sunday, Trump said he would strengthen and modernize the military, reiterating old 2020 statement that he “completely restored our army.”

But Harrison said those comments are somewhat controversial, so it’s unclear how much defense funding Trump thinks is actually needed.

“If you have all new equipment, why would you buy anything else?” – said Harrison. “Of course, what he said is ridiculously wrong. But what if he really believes it?

While Trump’s first term brought growing Pentagon budgets and a renewed focus on China, Trump himself has at times exerted tumultuous influence over the department, including moments that included personal involvement in contract negotiations for the F-35 and Air Force One, as well as unilateral ok. promising to cut the defense budget only to reverse course and increase the budget after meeting with key defense leaders.

Analysts say the instability makes it difficult to know whether Trump is serious when he talks about leaving NATO or signaling that he might withdraw his support for Ukraine.

“Maybe none of this will happen. That’s one way of thinking: “Oh, it’s just rhetoric,” said Byron Callan of Capital Alpha Partners. “But I think there will be quite a deep period of uncertainty until those answers become known.”

Roman Schweitzer, a defense analyst at TD Cowen, was optimistic about defense investment under a Trump presidency, describing the Republican platform as “very pro-defense.”

He added that prominent national security Republicans in Congress and the administration would likely support increasing the base budget, although they would be less likely to approve additional spending, such as the foreign aid bill passed last spring, which approved additional funds for Ukraine and Israel. , Taiwan and the key priorities of the US defense industrial base.

However, even if the Trump administration generally supports defense spending, other campaign priorities could have a negative impact on the defense industry, Callan said. For example, it is planned to take 20 percent tariff on all imported goods could result in financial pressure on defense contracts.

Another complication could be the potential creation of a new entity, the Department of Government Effectiveness, aimed at cutting federal spending, Callan said. Trump has said he will name SpaceX founder Elon Musk to lead the new department, and Musk said Sunday he believes he will be able to cut at least $2 trillion from the $7.3 trillion federal budget requested for FY25.

“When you start hearing these numbers thrown around, it’s like, if you think defense is going to grow because of the $2 trillion cut, it’s not going to happen,” Callan said. “It’s not that I think a $2 trillion cut is likely, but just this period of uncertainty about what’s going to happen?”

For Harris, a potential Biden Pentagon 2.0

Analysts agreed that a Harris victory would likely provide sufficient continuity for the Biden administration, both in terms of policy and personnel, if the new administration retains some Pentagon leaders such as Air Force Secretary Frank Kendall, who has expressed interest in serving under Harris .

During her speech at the Democratic National Convention, Harris said she would ensure that the United States retains “the strongest and deadliest fighting force in the world” and that the country wins the technology race against China in areas such as space and artificial intelligence. .

Unlike Trump, she vowed to “stand strong with Ukraine and our NATO allies,” signaling that she would seek additional military assistance for Ukraine in the future. And while Harris condemned the humanitarian crisis in the Gaza Strip, she said she would “always ensure Israel has the ability to defend itself,” reiterating that she would also continue military assistance to Israel.

However, Harrison said that doesn’t mean a Harris presidency will mean a gold rush for defense contractors. His prevailing assumption is that the Harris administration will prioritize domestic spending, which will result in defense budgets “largely remaining level with inflation or perhaps little real growth.”

“The only way we’ll see significant defense budget growth in a Harris administration is if it becomes part of an agreement with congressional Republicans to implement some of her priorities on the non-military side of the budget,” he said.

Schweitzer said the single best scenario for defense contractors is a Harris win combined with a Democratic House and a Republican Senate. This reshuffling of what he called the “Rubik’s Cube of Congress” combines Harris’s possible support for Ukraine and Israel with a pro-defense Senate and, most importantly, a House of Representatives in which the far-right Freedom Caucus would have little power to block military aid for additional assistance. expenses, he said.

The worst-case scenario, according to Harrison, is a slim Republican majority in the House, “as the Freedom Caucus will continue to hold defense hostage while trying to cut costs even further overall,” he said.

“Trading based on results”

Although defense companies announced third-quarter results in late October, just a couple of weeks before Election Day, the topic of the next president has largely remained under the radar during earnings calls with investors.

“The stock is really trading on performance right now,” Callan said. “They don’t seem to look beyond the election results and scenarios.”

Even under pressure, leaders don’t differentiate between how a Harris or Trump presidency might affect defense spending—at least not publicly.

Northrop Grumman CEO Kathy Worden said she didn’t expect a “significant difference” in defense spending between the Trump and Harris administrations during a conference call last month.

“We’ve seen over time that the defense budget reflects the threat environment more than any specific changes in the administration, and so we fully expect that again this time,” she said. “The National Defense Strategy has remained consistent over the past several years, under the last two administrations, and we believe that is because it responds to emerging threats around the world and is focused on both deterrence and defense. And in that regard, it fits well with Northrop Grumman’s software portfolio.”

Frank St. John, Lockheed Martin’s chief operating officer, echoed similar sentiments. In an August interview with Breaking Defense, St. John said the Pentagon is experiencing “stable or declining real purchasing power” relative to inflation, but said it was too early to tell how the defense budget’s fundamentals will stack up next year. a couple of years.

“As far as elections are concerned, we believe that deterrence and deterrence capabilities are a constant theme, regardless of which party is in the executive branch or who controls Congress,” he said. “And so we feel like our programs are well supported in the budget, and we look forward to working with any new administration.”

Other defense executives pointed to the uncertain political environment as a factor behind more conservative forecasts of how business might develop in 2025 and beyond.

Speaking to investors on an Oct. 19 conference call, Leidos CFO Chris Cage said the company sees “growth momentum” in its defense division but wants to be “cautious” about making more precise financial forecasts for 2025 until there is more certainty about the election results. and the ongoing FY25 budget process.

“If you look at the background, we are clearly in an election year. There is a risk of… extension of the CR and some disruptions,” he said. “If we get more clarity in the next few months, we will be in a better position to refine this view early next year.”