New defence-industrial strategies target capacity and resilience, but put cooperation at risk

International Institute for Strategic Studies | Lucie Béraud-Sudreau

Eight nations, including the United States, Canada, and Sweden, have published their first dedicated national defence-industrial strategies to rapidly expand manufacturing capacity and secure fragile military supply chains. This policy surge responds directly to the high equipment attrition rates and massive munitions consumption witnessed in the war in Ukraine.

Historically, peacetime "just-in-time" production models left Western industrial bases poorly prepared for sustained, high-intensity conflict. To address this, governments are integrating non-traditional commercial suppliers of dual-use technologies like artificial intelligence and quantum computing, framing defence spending as an engine for domestic economic growth. Global defence spending has surged since 2020. However, these nationalistic industrial policies risk undermining international collaboration, potentially stalling joint initiatives like the US-led Partnership for Indo-Pacific Industrial Resilience or causing the collapse of collaborative projects. Ultimately, states face a stark choice between supporting domestic industries and cooperating to deliver military capabilities faster and at a lower cost.

Comment

The rise of protectionist defence-industrial strategies directly threatens multilateral initiatives like the Partnership for Indo-Pacific Industrial Resilience. While PIPIR aims to build collective Indo-Pacific deterrence, national workshare demands and domestic job-creation targets inevitably create friction among its sixteen member states. The collapse of the Franco-German-Spanish Future Combat Air System project demonstrates how industrial-return logics override shared operational requirements.

This friction will likely force a shift from ambitious, multi-nation consortia like the Global Combat Air Programme toward narrower, bilateral co-production agreements. The Korea–US Shipbuilding Partnership Initiative of May 2026 illustrates this trend toward targeted, bilateral supply chain integration. Consequently, the US Navy's logistics chain in the Western Pacific will face severe bottlenecks if allied shipyards cannot standardise components under the Korea–US Shipbuilding Partnership Initiative.

Strategic Question for Discussion

If bilateral agreements like the Korea–US Shipbuilding Partnership Initiative become the preferred model for supply chain integration, how will the sixteen member states of the Partnership for Indo-Pacific Industrial Resilience reconcile their competing domestic economic mandates with the need for collective, theater-wide deterrence?

The trajectory indicates that member states will likely prioritize bilateral arrangements to protect domestic jobs while paying lip service to broader multilateral frameworks. This pattern suggests that PIPIR will function primarily as a diplomatic forum rather than an operational co-production mechanism. Consequently, actual industrial integration will remain limited to high-value, niche capabilities where bilateral partners share highly aligned strategic vulnerabilities.

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