Defense & Aerospace Report DEFAERO Daily Pod [Jun 02, 25] Week in Review & Byron Callan’s Week Ahead
4 snips
Jun 2, 2025 Byron Callan, a seasoned analyst from Capital Alpha Partners, shares his expertise on defense budgets and geopolitical concerns. He examines the potential for a significant increase in U.S. defense spending while navigating complex political dynamics between Congress and the administration. Callan discusses the repercussions of tariffs, particularly with China’s responses, and insights from the Shanghai-La Dialogue. He also sheds light on Ukraine's Operation Spiderweb, exploring its impact on Russia's bomber bases and the broader military strategies at play.
AI Snips
Chapters
Transcript
Episode notes
US Defense Budget Surge Expected
- The FY26 US defense budget is expected to see a massive investment increase, primarily in procurement and RDT&E.
- This growth may flatten after hitting a high before the midterm elections.
Tariffs Impact Defense Costs
- The baseline 10% tariffs on steel and aluminum are tolerable, but new 50% tariffs raise costs and disrupt supply chains.
- These tariffs will have unintended indirect security implications and cause retaliations from allies like Canada.
Rare Earth Processing Risks
- China's control over rare earth processing creates critical vulnerabilities for the US defense supply chain.
- Expanding US rare earth processing is urgent but faces technical, environmental, and political hurdles.