The move coincides with the Farnborough Airshow, the aerospace and defense industry’s premier gathering, with wars in Ukraine and the Middle East driving demand for tools from combat drones and interceptor missiles to AI-enabled military software.

The airshow coincides with new Prime Minister Andy Burnham’s first days in office. He named John Healey, who favors hiking the UK defense budget, as finance minister, while giving Health Minister Wes Streeting the defense brief.

The appointments boosted British defense and aerospace stocks on Tuesday, as markets bet companies would benefit from the new government’s willingness to make Britain more war-ready.

“I’m looking forward to working with him in his new capacity,” Rolls-Royce CEO Tufan Erginbilgic told reporters at the show on Tuesday, referring to Healey. “He understands Rolls-Royce and our agenda and how much we contribute to the country.”

The new government’s first announcement with foreign partners came on the Global Combat Air Programme, the stealth fighter being jointly developed by Britain, Italy and Japan. Canada joined as an observer, marking the first expansion beyond the founding members.

BAE Systems, Boeing and Saab also signed a deal to advance a partnership to offer Britain a new fast-jet pilot training aircraft based on Boeing’s T-7 system, as it looks for a replacement for the aging Hawk fleet.

Defense sector signal

Healey had previously spent months lobbying the former prime minister to lay out a pathway to spend 3% of GDP on defense by 2030, rather than the 2.68% that the government eventually budgeted for.

“As Defense Secretary, John Healey championed British business, recognizing the contribution that the defense sector makes to growth and national security,” BAE Systems CEO Charles Woodburn said.

Canada is becoming an increasingly important defense partner for European nations as it looks to diversify its defense spending away from the United States and forge closer ties on the continent.

There will be no financial commitment involved in its observer status, but Canada could join the program more formally in future, sharing the billion-dollar development bill and potentially ordering the jets.

Defense companies made up half of a record 1,600 exhibitors at this year’s show, highlighting a shift from the usual dominance of commercial aviation and reflecting how conflicts have reshaped spending priorities.

The contract, worth almost $2 billion CAN (US$1.4 billion), was awarded to General Dynamics Land Systems-Canada, based in London, Ontario. Canada will also pay for GDLS-Canada to build another 35 armored combat support vehicles for Ukraine, said Canadian Prime Minister Mark Carney, who announced the deal on July 16.

Canada had previously donated 89 such vehicles to Ukraine.

The new purchase will see the Canadian Army’s wheeled light armored combat support vehicle fleet increase from 360 vehicles to 550 vehicles.

GDLS-Canada was originally awarded the contract for the first 360 armored combat support vehicles in August 2019. Those vehicles have already been delivered.

ACSVs have eight variants – ambulance, command post, troop/cargo, electronic warfare, maintenance and recovery, mobile repair team, fitter/cargo, and engineer. They are all based on the GDLS-Canada’s Light Armored Vehicle 6.0 platform, which helps the army reduce training and sustainment costs. ACSVs are currently deployed with the Canadian-led NATO Multinational Brigade in Latvia.

Carney also announced that GDLS-Canada has been designated as the first strategic partner under his government’s newly established Defence Industrial Strategy’s framework. That framework puts emphasis on buying defense equipment from Canadian-based firms.

“Through this framework, we’re creating a pathway for Canadian companies like GDLS-Canada to work more closely with our government to build those sovereign capabilities: the armored vehicles, the drones, the icebreakers, the equipment that our armed forces need,” Carney said in a televised news conference from the GDLS-C plant.

The framework requires companies to commit to investing in Canadian research and development, hiring domestic workers and expanding their domestic supply chains. “In return, the federal government will act as an anchor customer — accelerating approvals and opening doors to new export markets,” Carney said. “The commitment is simple: when Canadian companies build for Canada, Canada will build with them.”

Carney said the construction of armored vehicles at GDLS-Canada involves more than 600 Canadian suppliers.

Carney launched the defense industrial strategy framework in the aftermath of U.S. President Donald Trump’s decision in 2025 to hit Canada with significant tariffs as well as other threats of economic punishment. Trump has warned that the only way Canada could escape such economic measures would be to become a 51^st state.

As a result, Carney noted that Canada needed to reduce its alliance on the U.S., particularly in regard to U.S.-built military equipment. “We should no longer send three-quarters of our defense capital spending to America,” Carney said June 9, 2025.

He left the door open to working with U.S.-owned firms, such as GDLS-Canada, as long as they made an economic commitment to Canada.

GDLS-Canada vice president and general manager Dave Haggerty welcomed the strategic agreement between the firm and the Canadian government. “Our team takes great pride in the opportunity to provide Canadian soldiers with the advanced combat vehicle platforms and support they need to succeed, while continuing to strengthen Canada’s sovereign capabilities, its defense industrial base, and skilled workforce,” Haggerty said in a statement.

Blue Water Autonomy and Saildrone allege they were kicked out of contention for the Navy’s Medium Unmanned Surface Vessel Family of Systems program after the Navy failed to comply with its own requirements, among other errors.

Blue Water Autonomy said the decision was based on “overly restrictive evaluation criteria, a misreading of Blue Water’s proposal, and irrational conclusions that are inconsistent with the [Request for Prototype Proposals] and statutory requirements,” according to a complaint filed in the U.S. Court of Federal Claims.

A significant portion of both companies’ legal documents were redacted, and the specifics of what the Navy found lacking in each of their MUSV proposals was not immediately clear.

The Navy said it could not comment on pending litigation.

The service launched the MUSV program and opened solicitations for the new class of boat on March 26, after canceling the Modular Attack Surface Craft program.

The latter, announced on July 28, 2025, solicited the development of USVs that were capable of carrying large containerized payloads that could accommodate a similar weight to the Navy’s anti-ballistic missile system, the Mark 70 Mod 1 Payload Delivery System.

The MASC program was dedicated to a specific mission and specific ask from the fleet, whereas the MUSV program addresses a larger batch of requirements and mission types.

This was the reasoning behind the shuttering of the MASC program, according to Rebecca Gassler, portfolio acquisition executive for the U.S. Navy’s robotic and autonomous systems.

The MUSV solicitation, which ended on April 17, analyzed a company’s business plan, manufacturing plan, test plan and technical design.

Chosen companies and their MUSVs were then instructed to prepare for an on-water test with a surrogate vessel that would be conducted at the end of the fiscal year.

Blue Water Autonomy was initially chosen by the Navy to participate in the Modular Attack Surface Craft program before the MUSV program was rolled out.

The company was already underway in developing its Liberty vessel for the MASC program when it ended, having sunk money into production.

But before Blue Water Autonomy could participate in the on-water test with a surrogate vessel to demonstrate its viability as a partner for future MUSVs, they say they were barred from continuing in the MUSV program competition.

The Navy announced on June 1 that it had selected seven companies to participate in at-sea testing.

Those companies included Sea Machines, Leidos, Saronic Technologies, Galliano Marine Services, PacMar Technologies, Birdon and Huntington Ingalls Industries.

Blue Water Autonomy was not on the list.

The company said the Navy’s decision to remove it from consideration for the MUSV request for prototype proposal was “capricious” and not “in accordance with statute or regulation.”

The complaint asked that the Navy halt the testing and funding for the MUSV program until “prejudicial errors” were remedied and Blue Water Autonomy was allowed reentry into the program in an effort to win the bid for the MUSV contract.

Saildrone was also excluded from participating in the program after initially taking part.

The company argues that it was more than deserving of being in the mix for the MUSV program, as it operates the world’s largest fleet of contractor-owned, contractor-operator USVs which have completed upwards of 2.5 million nautical miles since 2012, according to a complaint filed in the U.S. Court of Federal Claims.

“Our fully compliant MUSV submission to the US Navy should have qualified for advancing to the next round, in which we would participate in sea trials and develop a prototype at our own cost,” a Saildrone spokesperson said. “We support the Navy’s mission and believe there has been a misunderstanding in the evaluation of our bid.”

Saildrone has deployed more than 70 vessels across the globe, including for the Navy and U.S. Coast Guard, the complaint said.

The company said it learned it was disqualified from continuing to compete in the MUSV program from a news article and was offered no explanation in an email follow-up with the U.S. government as to why it wasn’t given an opportunity to continue.

Eventually, Saildrone says they were provided a “fundamentally flawed evaluation.”

“Because advancement to the on-water test event imposes no material financial obligation on the government, reevaluating Saildrone’s proposal consistent with the solicitation and advancing Saildrone furthers the public interest at no meaningful cost,” the complaint said.

Saildrone asked to be reinstated in the competition and allowed to compete in the on-water test.

The fiscal 2027 Navy budget calls for the procurement 63 unmanned vessels.

President Donald Trump’s One Big Beautiful Bill Act contains $2.1 billion for medium unmanned surface vessels, a Navy official told Military Times in March.

Trump is scheduled to participate in a roundtable discussion capping a two-day Defense and Innovation Summit hosted by Republican Senator Dave McCormick at the U.S. Army War College in Pennsylvania. The event gathers senior military leaders, defense contractors, investors and technology executives to discuss strengthening the U.S. industrial base and speeding the delivery of advanced weapons systems.

Trump’s appearance underscores a broader focus by the administration on defense production as prolonged conflicts have consumed large quantities of missiles, interceptors and other weapons, while highlighting the limits of the U.S. military supply chain and production capacity. Trump is expected to make several Pennsylvania-based defense investment announcements.

Joint Chiefs of Staff Chairman General Dan Caine urged defense companies on Tuesday to accelerate production and innovation, saying the military needs industry partners to help deliver capabilities faster as warfare evolves.

“What I need you to know, and I know this is simple for me to say, but hard to do, is to go faster. Please go faster. Think bolder,” Caine said.

Broader industrial strategy

For Trump, expanding defense manufacturing has become part of a wider economic strategy to revive U.S. industrial capacity, with the Pentagon increasingly viewed as a catalyst for factory investment, advanced manufacturing and domestic supply chains.

In late June, Trump met with munitions makers at the White House to urge the industry to move faster.

The United States has supplied large quantities of weapons to allies while also using munitions in its own military operations, raising concerns about inventories of key air-defense and precision-guided weapons and increasing pressure on contractors to boost output. Soaring demand for rocket motors used to power missiles and other weapons has spurred new thinking about supply chains.

Seeking big returns, Silicon Valley-style startups are now taking on defense companies that have long dominated the industry, pulled into the competition by a need for production speed, high volume and lower costs. Legacy solid rocket motor makers Northrop Grumman and L3Harris say they have been pushing their own research and development to pull in new technologies like 3D printing and new mixing technologies.

Michael Duffey, who oversees buying for the Pentagon, told the summit audience that the department is using long-term procurement contracts to give defense companies the confidence to invest billions of dollars in expanding factories, citing roughly $20 billion in private investment tied to plans to boost production of Patriot missiles and other high-demand weapons.

“The global environment now demands that we produce at this scale, at this speed, at this volume,” he said.

Canadian Prime Minister Mark Carney announced July 6 that TKMS has been selected as the winning bidder in the country’s project to acquire the new boats. The company offered Canada its Type 212CD submarine which is being built for both Germany and Norway.

Carney did not provide a dollar figure on the submarine project but noted the deal is expected to be the largest defense procurement in the country’s history. It is estimated that the entire project could cost as much as $70 billion ($100 billion Canadian) when long-term maintenance, new infrastructure, weapons and other factors are considered over the life of the boats.

Negotiations with TKMS will begin shortly with a contract expected to be in place by the end of the year.

TKMS beat out a bid from Hanwha Ocean, which was offering its KSS-III submarine.

“This was a difficult, close decision between two highly qualified suppliers,” Carney said in making the announcement in Halifax, Nova Scotia. “Both the TKMS and the Hanwha platforms met the very high capabilities of the Royal Canadian Navy, and both of them put forward strong proposals to maximize benefits for Canadian workers and businesses.”

“These subs will strengthen our defense industrial base, they will deepen our partnerships with trusted allies, and they will open new opportunities for Canadian businesses in European supply chains,” he added.

The new submarines will replace the Royal Canadian Navy’s aging Victoria-class submarines. Government officials said the first submarine is expected in 2033 with three more hopefully being delivered in 2034.

“In the end, this decision was about choosing the absolute best platform and partnership to meet Canada’s combined strategic, security and economic interests,” Carney said.

Carney made the announcement the day before the NATO Summit is set to begin in Turkey. “These subs will strengthen our defense industrial base, they will deepen our partnerships with trusted allies, and they will open new opportunities for Canadian businesses in European supply chains,” Carney said.

Oliver Burkhard, CEO of TKMS, said in a statement that the company is ready to provide Canada with significant economic benefits. “We stand ready to work alongside the government of Canada, Canadian industry and our partners in Germany and Norway to deliver a world-class submarine capability that will strengthen security, create economic opportunity and generate lasting benefits for future generations,” Burkhard said.

Glenn Copeland, CEO of Hanwha Canada, said the company was disappointed with its loss but he noted that the competition showed Canada what South Korea can offer. “The team at Hanwha have demonstrated to the Canadian public and government that there is unlimited potential to unlock within the South Korean defense industrial base and that Hanwha and its business divisions will continue to grow aside from today’s decision,” Copeland said in a statement. “We look forward to continuing to demonstrate why Hanwha is the backbone of the world’s fourth-largest defense export nation.”

Hanwha mounted a significant economic and public relations push to convince Canada about the value of its boats. That included the Republic of Korea Navy sending one of its KSS-III submarines to Victoria, British Columbia, in May to show the long-range capabilities of the boat as well as to conduct joint operations with the Royal Canadian Navy.

The South Koreans were also promoting the procurement as a way for Canada to expand its relations in the Asia-Pacific region. Carney said that the loss for Hanwha does not signal a change in Canada’s commitment to the area. “We’re very committed to the Indo-Pacific strategy,” he said. “There are a series of other initiatives Canada and Korea are pursuing that build our economic resilience and security footprint.”

Stephen Fuhr, secretary of state for defense procurement, said at a news conference in Victoria on July 6 that the submarine competition was completed in record time. The whole process took less than a year.

Fuhr said one of the main criticisms of Canada’s defense procurement process is that it is too lengthy. But he noted he intends to change that and speed up other future defense procurements.

The current fleet of Victoria-class submarines operated by the Royal Canadian Navy will be decommissioned in the mid-2030s, the Canadian government has noted.

“At my direction, the United States Southern Command delivered a swift and lethal kinetic strike to successfully execute Nino Guerrero the infamous leader of Tren De Aragua, one of the most bloodthirsty Terrorist Organizations on Planet,” Trump wrote in a post on Truth Social on Friday evening.

“This action was coordinated closely with our friends in Venezuela, with whom we are working very well.”

Pentagon chief Pete Hegseth posted on X that the strike was conducted earlier this week and that Guerrero “was confirmed killed during the strike.”

Venezuela’s information ministry said that during the operation there were clashes with members of criminal groups, in which the leader, Guerrero, was neutralized.

The operation involved specialized technological support and was carried out through cooperation and intelligence-sharing between authorities of both countries, the ministry said.

The Trump administration has repeatedly targeted Guerrero and other leaders of the Tren de Aragua organization with sanctions over alleged involvement in criminal activities such as illicit drug smuggling, human trafficking and money laundering.

The State Department has designated Tren de Aragua a foreign terrorist organization.

Trump has claimed Tren de Aragua coordinated its U.S. activities with the Venezuelan government of President Nicolás Maduro. The Trump administration has cited the alleged connection to justify deporting some immigrants in the U.S. to a maximum-security prison in El Salvador.

Tren de Aragua is known for being involved in human trafficking and controls routes taken by Venezuelans and other South American migrants heading south to relatively prosperous Chile and other destinations in South America or Europe.

The group has also been linked to extortion, kidnapping, money laundering, contract killings, smuggling and organized retail theft from Panama to Brazil and along the Andean corridor, Latin American police officials say.

Guerrero escaped from the Tocoron prison in Venezuela along with other gang leaders just before a police raid in 2023.

Caine held bilateral discussions with senior leaders of the interim government and with U.S. embassy personnel. During those meetings, he underscored the importance of Venezuelan stability, broader security across the Western Hemisphere and the military’s commitment to implementing Trump’s “three-phase plan,” Joe Holstead, a spokesman for Caine, said in a statement.

The plan focuses on avoiding chaos, bolstering an economic recovery and — eventually — facilitating a transition to democracy.

A key pillar of the effort has been restoring Venezuela’s oil industry, which Trump previously characterized as a “total bust.”

All of that changed with Operation Absolute Resolve. The sprawling military raid — which involved more than 150 aircraft — culminated in Delta Force commandos descending on a heavily fortified compound and capturing Maduro and his wife, Cilia Flores. The pair were later flown to New York, where they each face criminal charges.

The U.S. military, meanwhile, continues to maintain a robust presence in the region, with the USS Nimitz Carrier Strike Group sailing into the Caribbean in May.

Since September, the Pentagon has carried out at least 62 strikes in the waters off South America, killing nearly 200 people whom the Trump administration says were involved in drug trafficking, according to data compiled by Military Times. Many legal experts dispute the legality of those operations.

U.S. Marine Corps Gen. Francis Donovan, the head of U.S. Southern Command, briefly discussed operational security matters with the Cuban delegation, which included Cuban Gen. Roberto Legra Sotolongo, first deputy minister of the chief of the General Staff, U.S. Southern Command said on X.

“Donovan also led a perimeter security assessment of the naval base and discussed force protection, safety of service members and their families, and operational readiness with base officials,” it said.

Donovan’s meeting in Cuba is the first in recent memory by a head of Southern Command and comes amid growing concerns in Cuba of a possible U.S. military attack on the Communist-run island.

Cuba’s armed forces said on Facebook that the meeting took place with mutual agreement and that both sides agreed to maintain communication.

“Both delegations evaluate positively the meeting where issues related to security around the dividing perimeter of the military enclave were addressed and agreed to maintain communication between both military commands,” the statement said.

The meeting follows a rare visit earlier in May by CIA ​Director ⁠John Ratcliffe to Havana.

President Donald Trump has often cited Cuba among the foreign policy goals of his second term and has hinted it will become his focus once the war with Iran is over.

U.S. ANTAGONIST

Cuba has been a U.S. antagonist for decades, since Fidel Castro’s 1959 revolution.

Trump is strongly supported by hardline Cuban Americans in Florida, who have pushed for U.S.-instigated regime change for decades, and his administration has been steadily ramping up pressure on the island.

On May 20, the U.S. formally charged former President Raul Castro with four counts of murder for the 1996 downing of civilian aircraft operated by Miami-based exiles.

The indictment was the latest example of the Trump administration’s efforts to assert U.S. influence in the Western Hemisphere.

Washington’s more assertive role in Latin America was epitomized by an audacious raid by the U.S. military on Jan. 3 to capture Venezuelan President Nicolas Maduro in Caracas, and then fly him to New York to face drug trafficking charges.

Maduro, a socialist aligned with Havana, pleaded not guilty.

U.S. Secretary of State Marco Rubio, the son of Cuban immigrants who is seen as a possible contender for the 2028 Republican nomination for president, has raised alarm in Havana by talking about the national security risk posed by what he calls a failed state just 90 miles (145 km) from Florida.

On May 5, Rubio and Donovan posed in front of a map of Cuba in a post on X by Donovan’s Southern Command. It said the talks focused on “U.S. efforts to counter threats that undermine security, stability and democracy in our hemisphere.”

Cuba’s Foreign Minister Bruno Rodriguez has warned that any military action would lead to a “bloodbath” in which thousands of Cubans and Americans would die.

Trump has effectively imposed a fuel blockade on the island by threatening tariffs on countries supplying it with fuel, igniting seemingly endless power outages and delivering new blows to the island’s already ailing economy.

Experts say instability in Cuba threatens a migration crisis.

The goal is to go beyond the traditional brute-force approach of giant bombs that rely on the force of gravity to smash their way deep into the ground before exploding.

During World War II, the Royal Air Force dropped 22,000-pound “Grand Slam” bombs. Eight decades later, the U.S. Air Force has used the 30,000-pound GBU-57 Massive Ordnance Penetrator in the campaign against Iran.

Now, DARPA wants to pivot away from the traditional bunker busters and instead manipulate shock waves to destroy targets.

“The government is explicitly interested in concepts that move beyond traditional mass-velocity scaling and empirical design toward mechanisms that deliberately shape, steer, amplify, or suppress stress waves within homogeneous and heterogeneous materials,” according to DARPA’s Request for Information. The deadline is June 26.

“Areas of interest include, but are not limited to, transient material state manipulation under extreme loading, non-linear and anisotropic wave control, dynamic impedance matching, controlled failure initiation and progression, and the coupling of structural, material, and geometric effects to achieve step-change performance against complex targets,” DARPA continued.

DARPA also seeks “new regimes of performance or observability in shock-dominated environments.”

Potential advances include “architected or actively tunable materials, novel fabrication methods that embed function into structure,” and “advanced diagnostics capable of resolving high-strain-rate phenomena in situ.”

DARPA’s quest for better bunker-busters comes as the future of warfare heads beneath the surface. Iran has embedded nuclear facilities and missile stockpiles inside mountains. North Korea uses bunkers and tunnels to conceal nuclear sites, missile launchers and artillery.

Even non-state actors such as Hamas and Hezbollah — and before them, the Viet Cong — waged war from underground. In the Ukraine War, drones have become such a pervasive threat that human soldiers spend much of their time in bunkers.

Rooting out insurgents from tunnels is hard enough, as the U.S. Army’s “tunnel rats” can attest. Trying to destroy an Iranian nuclear site 300 feet underground is an order of magnitude harder.

That’s why weapons like Grand Slam and the Massive Ordnance Penetrator were invented. But the Grand Slam could be carried only by a specially modified Lancaster four-engine bomber, while the MOP is dropped by a B-2 bomber, of which the U.S. Air Force has only 19 operational.

DARPA’s RFI doesn’t mention reducing the size of bunker-buster bombs. But if scientists can devise ways to exploit shock waves to destroy targets, this opens the possibility of smaller bunker-busters that can be carried by a variety of aircraft.

Standing alongside Canadian Defense Minister David McGuinty in front of a Franco-German helicopter fitted with Canadian engines, Pistorius made an explicit pitch for TKMS’ Type 212CD in Canada’s Canadian Patrol Submarine Project, a contract estimated at up to C$60 billion (US$43.3 billion) and among the largest defense procurement decisions in Canadian history.

“This is a very unique offer,” Pistorius said at a fireside chat hosted by the Canadian Global Affairs Institute. “Canada opting for the 212CD would mean to consistently and sustainably pursue the transatlantic path towards closer integration of our economies.”

The pitch was strikingly direct for a German defense minister. Germany has historically maintained a tradition of restraint in arms exports, with political leaders deliberately keeping a distance from commercial defense sales. That posture is shifting. Pistorius’s appearance at CANSEC was his third visit to Canada as defense minister in three years, and he arrived with an investment package, government-to-government endorsements, and detailed economic figures − a playbook far more reminiscent of France’s state-backed arms export model than Berlin’s traditional approach.

Germany and Norway submitted a joint bid for up to 12 Type 212CD submarines in March. In his public remarks, Pistorius cited figures of C$86 billion (US$62 billion) in GDP impact, C$167 billion (US$120.5 billion) in total economic output, and more than 650,000 job-years over the contract period − numbers derived from modeling commissioned by TKMS and the German government.

The German bid faces stiff competition from South Korea’s Hanwha Ocean, whose KSS-III Batch II submarine sailed to Canadian Forces Base Esquimalt in British Columbia last week in a conspicuous show of hardware diplomacy. Pistorius was pointedly dismissive. “We are not in a theater,” he told German journalists. “This is not about showing, it’s about proving experience and technology.”

But he also took the opportunity to remind Canadian listeners that Germany had been instrumental in facilitating Ottawa’s acceptance into the European Union’s SAFE defense financing mechanism.

The German-Norwegian offer attempts to counter South Korea’s main advantage − a pledge to deliver four submarines by 2035 − by reallocating vessels from Germany’s own order pipeline to put four boats in Canadian hands by 2036. Fleet interoperability across NATO’s northern flank is Berlin’s strongest substantive argument: Germany and Norway already operate or are acquiring the 212CD class. Together with Canada, there would be a NATO fleet of 24 such boats, making it “the world’s largest and most modern conventional submarine fleet,” he said.

It would also strengthen Berlin’s emergence as a key NATO player for the Arctic region. Germany previously launched a North Atlantic maritime security partnership with Norway, Canada and Denmark, and Pistorius was the first to disclose on Wednesday that Iceland is on the verge of joining the group as well.

An acquisition decision by the Canadian government is expected by early July, before the NATO summit in Ankara, Pistorius told reporters in German.