Amid the early days of a second Trump administration, diplomatic tensions have flared as the U.S. adopts more coercive tactics—particularly in the realm of defense exports. Following a string of contentious incidents, including accusations of blackmail and extortion, major buyers of American-made weapons are beginning to hedge against future volatility by seeking alternative suppliers.

Companies like Saab, Dassault Aviation, BAE Systems, Rheinmetall, and South Korea’s growing defense sector are emerging as credible options for countries eager to diversify their military procurement. As American soft power erodes largely due to drastic downsizing and the elimination of agencies and programs dedicated to U.S. diplomacy, these firms are increasingly poised to fill the void.

Sweden’s Saab

Saab, Sweden’s flagship defense firm, has long been a serious player in European arms exports. Its Gripen fighter jet performs comparably to the American-made F-16, and countries such as Brazil, Japan, Australia, Indonesia, the UAE, and others already count themselves as customers. According to a 2024 Bloomberg report, Swedish arms exports reached a record high—driven largely by Saab’s performance.

CEO Micael Johansson has stated that Saab is currently on track to produce 400,000 ground combat weapons. The company’s contributions to Ukraine during Russia’s invasion, coupled with Sweden’s recent accession to NATO, have helped attract interest from new alliance members, particularly Portugal and Canada.

While false, persistent rumors about American-made systems like the F-35 being equipped with a “kill switch” have contributed to diplomatic unease, the Trump administration hasn’t helped ease concerns. The Oval Office meeting between President Trump and Ukraine President Volodymyr Zelensky was a diplomatic trainwreck, and the administration hasn’t been shy about hiding its animosity towards NATO and Europe. These tensions have made countries like Canada and Portugal more willing to evaluate Saab’s Gripen-E as a potential alternative.

France’s Dassault Aviation

Dassault Aviation remains one of the premier aerospace and defense companies in Europe, producing military aircraft that, in many ways, rival their U.S. counterparts. Among Dassault’s most notable aircraft are the Mirage 2000 and the Rafale M and G series.

The Mirage cemented its reputation during the 1996 Imia Crisis between Greece and Turkey when a Greek Mirage-2000 downed a Turkish F-16. More recently, the Ukrainian Air Force has praised the aircraft for its role in air defense operations against Russian missile attacks.

Dassault’s Rafale fighters are even more advanced, offering additional capabilities that make them highly competitive. Current customers include Greece, Serbia, Croatia, Indonesia, India, Qatar, Egypt, and the UAE—with other countries reportedly considering procurement in the near future.

UK’s BAE Systems

BAE Systems, the United Kingdom’s largest defense contractor, specializes in aerospace, defense, and information technology and is one of the top arms exporters globally. Its longstanding collaborations with American firms, including contributions to the F-35 Lightning II with Lockheed Martin, have only strengthened its profile.

The company’s frequent clients include Australia, India, Saudi Arabia, the United States, and the UK military itself. With some of the most advanced technologies in the industry, BAE Systems is well-positioned to maintain its role as a leading weapons supplier amid global realignment.

Germany’s Rheinmetall

Rheinmetall, Germany’s largest arms producer, is also among the top defense exporters in Europe. Established in 1889, the company has played key roles in both German and international military engagements over the decades. Today, it is known for armored vehicles, artillery, loitering munitions, and air defense systems.

Clients include Saudi Arabia, South Africa, Israel, Ukraine, and various European Union countries. Since 2022, the company has experienced a significant revival, driven by high demand amid Russia’s invasion of Ukraine—where artillery and air defenses have become vital.

As Germany reconfigures its military posture and moves toward large-scale remilitarization, Rheinmetall will be instrumental in rebuilding the German armed forces into a more autonomous force.

South Korean Exports

South Korea’s defense industry is undergoing a remarkable transformation. Companies such as Hyundai Rotem, Hanwha Aerospace, and Korea Aerospace Industries (KAI) are leading the charge, securing high-profile weapons contracts and expanding export capabilities. According to The Chosun Daily, Seoul’s defense exports reached $9.5 billion in January 2025, driven by rising global demand.

South Korea now exports to Poland, Turkey, Finland, Egypt, Norway, Saudi Arabia, Romania, the UAE, and more. Aiming to become one of the world’s top four arms exporters by 2027, Seoul is leaning on its reputation for innovation and reliability. Originally developed to counter North Korean threats, its weapons systems have proven indispensable to European nations seeking to replenish artillery stocks—particularly during Ukraine’s 2023 shell shortage.

Implications for the United States

While global defense diversification encourages competition and innovation, it also poses a serious challenge to U.S. dominance in the arms market. Historically the world’s top weapons exporter, the United States now risks ceding ground if political rifts with allies persist.

The Trump administration’s transactional approach—treating allies more like clients than partners—has shaken confidence in U.S. defense commitments. Countries like Canada and Portugal are already considering South Korea and Saab as viable alternatives should F-35 negotiations with Lockheed Martin collapse. In fact, Lockheed Martin has reportedly offered to build new factories in Canada as an incentive to keep the deal intact.

American arms exports have long been a pillar of its soft power strategy, helping entrench influence across regions. But ongoing diplomatic rifts, reduced funding for U.S. State Department programs like USAID, and widespread unease over working with the current U.S. administration are undermining that strategy. As foreign clients increasingly look elsewhere, the U.S. monopoly on global arms sales may be approaching a turning point.