U.S. Policy Threatening Lockheed Martin Billions in F-35 Cuts?

French President Emmanuel Macron called for offering the Rafale fighter jet to countries buying the F-35, pushing to curb Europe's reliance on U.S. defense systems. He warned that Europe must boost its own military industry to avoid dependence on American weapons.

Canada, which signed a $13 billion contract for 88 F-35s in 2023, is reconsidering its options. “Canada is actively looking at potential alternatives to the U.S.-built F-35 stealth fighter and will hold conversations with rival aircraft makers,” said Defense Minister Bill Blair, pointing to Sweden’s Gripen fighter. While Canada has committed funds for its first 16 F-35s, scheduled for delivery early next year, Blair suggested future replacements could come from European manufacturers.

Tensions between Canada and the U.S. have grown amid trade disputes and Trump’s past remarks about annexing Canada as the 51st U.S. state. His criticism of NATO members for underfunding defense has added to the uncertainty. “If they don’t pay, I’m not going to defend them,” he warned, raising doubts about Washington’s commitment to its allies.

Portugal, which had been considering the F-35 to replace its aging F-16s, is also weighing alternatives. “The recent U.S. stance in NATO and the international geostrategic dimension makes us think about the best options,” said Defense Minister Nuno Melo, emphasizing the risk of operational restrictions. “This ally of ours… may bring limitations in use, maintenance, components—everything that has to do with ensuring that aircraft will be operational and will be used in all kinds of scenarios.”

Lisbon has not yet finalized its next fighter jet choice, but options include the Dassault Rafale from France and Sweden’s Gripen E/F. While these alternatives often have higher initial costs than the F-35A, they offer lower long-term operational expenses.

The growing unease over the F-35 comes amid broader uncertainty about U.S. foreign policy. Trump has threatened trade wars with Europe, halted military aid to Ukraine while signaling closer ties with Russia, and suggested NATO allies should not rely on U.S. protection. His remarks about Greenland, a Danish territory, have only deepened concerns among European leaders. “We have to believe that, in all circumstances, these allies will be on our side,” said Melo.

Germany, which hosts multiple U.S. military bases, has frequently faced criticism from Washington over its defense spending. Meanwhile, the U.K.—another key NATO ally—is conducting a strategic defense review that could impact its plans to expand its F-35B fleet. London is currently a partner in the Global Combat Air Programme (GCAP) with Italy and Japan, while France, Germany, and Spain are jointly developing the Future Combat Air System (FCAS).

If Germany cancels its F-35 order, Lockheed Martin stands to lose approximately $5 billion. Canada’s deal values each F-35 at roughly $145 million, including support, spares, and training. The financial impact on U.K. interests and other NATO partners remains uncertain, but the debate over the future of the F-35 in allied fleets is gaining momentum.