Ongoing tariff wars and a dependence on China are two of the top emerging risks for the global defence sector, according to a report released this week by the UK-based consultancy WTW (Willis Towers Watson).
“The defence sector’s reliance on Chinese materials and components, particularly rare earths and electronics, is presenting significant supply chain vulnerability amid geopolitical risks,” the consultancy said.
Advertisement
The report, which was based on interviews with an international panel of five industry executives from Australia, Europe and North America, found the tariff war between China and the United States is disrupting supply chains and raising costs, making it a key concern for the defence industry going forward.
“Managing the new economic risks in the defence sector” was released on Wednesday by Oxford Analytica and Willis, an arm of WTW. The names of the panellists were not featured in it, but their interviews serve as a base for the identified risks.
08:58
What are rare earths, and why is China’s dominance facing global pushback
What are rare earths, and why is China’s dominance facing global pushback
The findings raised concerns that China could feel targeted by geopolitical lockdown measures in other tariff deals, such as export control alignment and transshipment restrictions. And that they have the option of retaliating by withholding critical minerals and other key supplies, which would have huge implications for the defence industry.
