Shares of U.S. defence contractors are rising on reports that Taiwan is considering buying a large number of weapons from America to help defend itself from China.
According to media reports, Taiwan’s government is planning to purchase the Aegis destroyer vessel and F-35 fighter jets that are, at least partially, made by Lockheed Martin (LMT).
The same reports say Taiwan is also eyeing Northrop Grumman’s (NOC) E-2D Advanced Hawkeye, an airborne radar system, and acquiring more Patriot missiles made by RTX Corp. (RTX), formerly known as Raytheon Technologies.
The U.S. defence purchases are being considered as Taiwan’s government looks to demonstrate to the incoming administration of U.S. President Donald Trump that it is serious about defending itself against China.
Trump has repeatedly called on America’s allies to spend more on their own defence.
Media reports state that Taiwanese officials have held informal discussions with Trump’s advisors about a defence package that would show Taiwan’s determination to defend itself.
The Aegis warship from Lockheed Martin is reportedly at the top of the list for Taiwan.
However, Taiwan could also buy as many as 60 F-35 fighter jets, four Advanced Hawkeyes, and 400 Patriot missiles in a defence package that would be valued at about $15 billion U.S.
During Trump’s first term, the U.S. government approved 11 defence packages to Taiwan worth $21 billion U.S.
The stocks of Lockheed Martin, Northrop Grumman, and RTX each rose about 2% on news of Taiwan’s potential purchases of American defence equipment.
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