F-35 Cornered by Trump's Tariff War [Yang Nak-gyu's Defence Club]

No Exemption Policy for Defense Sector in Trump's Tariff Policy
Production Disruptions Inevitable if Rare Earth Imports from China Halt
Countries Turning Away from the U.S. Due to Tariff Barrage

U.S. defense contractors have been pushed into crisis due to President Donald Trump's tariff policies. Production disruptions of the F-35 stealth multirole fighter, considered a fifth-generation fighter, have led some countries to take a closer look at South Korea's KF-21 fighter jet.

Yonhap News

The F-35 stealth fighter is facing rising production costs, diplomatic issues, and resource problems due to President Trump's tariff policies. Twenty countries participate jointly in the production and operation of the F-35 stealth fighter. Given the complex manufacturing process of defense products, the assembly process requires crossing multiple borders several times, which can result in tariffs being applied multiple times on a single product. Ultimately, production costs inevitably rise sharply.

No Exemption Policy for Defense Sector in Trump's Tariff Policy

Earlier, President Trump did not announce any exemption policy for the defense sector when unveiling his tariff policy. The repercussions have also affected plans for nuclear-powered submarine production. The nuclear-powered submarine plan that the U.S. intends to support Australia through AUKUS (Australia, United Kingdom, United States security alliance) is also at risk due to rising component prices. The same applies to the air defense system development cooperation underway with Israel. The global supply chain that the U.S. Department of Defense and defense contractors have built over decades could face disruption.

Bill Greenwalt, a former procurement officer at the Department of Defense, mentioned retaliatory tariffs and supply chain disruptions, forecasting that "the prices of some key components could rise sharply or become completely unavailable." According to Greenwalt's analysis, even if alternatives to source components domestically in the U.S. are found, it would take at least several years.

Production Disruptions Inevitable if Rare Earth Imports from China Halt

Resources are also a problem. China's export controls on rare earth elements in response to President Trump's tariff barrage could boomerang and threaten the U.S.'s world-leading military power. Rare earth elements are absolutely essential resources for the U.S.'s advanced weapons. However, 90% of rare earth magnets are made in China.

Rare earths are core materials for magnets essential in electric motors and are widely used in fighter jets, warships, missiles, tanks, and lasers. Magnets made from rare earth materials are used to ignite fighter jet engines, supply emergency power, and adjust tail fins to enable ballistic missiles to conduct precision strikes. The same applies to manufacturing small electric motors for drones, which have emerged as a core element of modern warfare. Yttrium, a rare earth element, is used for thermal insulation coatings to prevent jet engine turbines from melting due to high heat during flight. Approximately 900 pounds (about 400 kg) of rare earth elements are used to build one F-35 fighter jet. Submarines require even more, sometimes exceeding 9,200 pounds (about 4,100 kg) of rare earth elements.

The U.S. once mined rare earths domestically at the Mountain Pass mine in California for use in its own weapons. Until the 1980s, the U.S. was the world's largest producer of rare earths, but the mine was closed in 2002 due to environmental concerns, and China took over that position. The U.S. became alert after China banned rare earth exports amid a fishing dispute with Japan in 2010 and has since sought "rare earth independence." However, the prevailing assessment is that domestic production still falls short of military demand.

Countries Turning Away from the U.S. Due to Tariff Barrage

Some countries have turned their backs on the U.S. tariff policy. Canada, which was considering purchasing the F-35, has decided to reconsider the purchase. Portugal also reportedly put its F-35 purchase plans on hold on the 14th, mentioning the possibility of changes in its relationship with the U.S.

According to foreign media on the 15th (local time), "New Canadian Prime Minister Mark Carney instructed Defense Minister Bill Blair the previous day to review whether the F-35 contract is the best investment for Canada and if there are better options that meet Canada's needs."

Canada signed a contract with U.S. company Lockheed Martin in 2023 to acquire 88 F-35s worth 19 billion Canadian dollars (approximately 12.2 trillion KRW) as part of its fighter replacement program. Canada has already paid for 16 units scheduled for delivery next year. Canada's reconsideration of the F-35 purchase is analyzed as a warning to President Donald Trump amid escalating conflicts with the U.S. The Trump administration recently announced a 25% tariff on Canadian imports, escalating tensions.

While Canada hesitates on the F-35 purchase, the KF-21 developed by Korea Aerospace Industries (KAI) is gaining attention. On the 15th (local time), Canadian public broadcaster CBC reported that "the KF-21 has a similar appearance and performance to the F-35 while being cost-competitive." Jason Ahn, KAI's North America regional manager, emphasized in an interview with CBC that "the KF-21 is advantageous in terms of maintenance compared to the F-35 and can perform various missions."