BMI View: At present, the US is focusing on maintaining the military dominance necessary to uphold thecurrent international order. While the country will maintain a lead over our forecast period, it is becomingmore expensive and difficult to do so as rival powers grow in assertiveness and technological capability. USforeign and defence policy sometimes lack a unifying focus due to confrontation within the US governmentand the administration's questioning of certain traditional US foreign policy objectives. The goal ofmodernising the US military will hinge upon legislature supporting the administration's fiscal policy and onno new major military deployments absorbing significant shares of the defence budget. Threats fromRussian aggression, Chinese assertion in the South China Sea and terrorism will drive spending in thecoming years. Threats posed by North Korea and Iran also have the potential to escalate quickly andcyberwarfare risks will grow rapidly over the long term. These challenges will shape procurement prioritiesover the medium-to-long term. Some medium-term growth in domestic defence spending and increasingexports will improve the US defence sector outlook, with the US set to remain the largest defence exporterin the world for the foreseeable future. That said, there is growing competition from Russian and Chinesedefence exports.
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