WASHINGTON, March 4 (Reuters) - U.S. President Donald
Trump has frozen military aid to Ukraine, just days after
publicly confronting Ukrainian President Volodymyr Zelenskiy at
the White House and accusing him of being insufficiently
grateful for Washington's backing.
The halt to U.S. military aid does not only have significant
implications for the three-year-old war between Ukraine and
Russian invasion forces. It will also impact the U.S. defense
industry. Here's how:
HOW MUCH HAS THE U.S. SPENT ON MILITARY AID FOR UKRAINE?
The United States has pledged and spent at least $65 billion
on military aid for Ukraine since Russia's full-blown February
2022 invasion. Primarily, that assistance has been allocated
through two tools: the Presidential Drawdown Authority (PDA) and
the Ukraine Security Assistance Initiative (USAI).
WHAT IS THE PRESIDENTIAL DRAWDOWN AUTHORITY?
More than $31 billion worth of weapons and equipment has
been pledged to Ukraine under the Presidential Drawdown
Authority (PDA), which allows the president to approve rapid
transfers to foreign countries from U.S. military stockpiles,
without having to seek congressional approval.
More than $20 billion worth of weapons and equipment has already
been shipped this way, according to a Reuters analysis.
Ukraine is still awaiting a large shipment of armored
vehicles that are not set to be delivered until mid-2025, said a
Ukrainian official, speaking on condition of anonymity. They are
currently being refurbished at depots in Europe.
WHAT IS THE UKRAINE SECURITY ASSISTANCE INITIATIVE?
The U.S. has bought nearly $33.2 billion worth of new arms
and military equipment for Kyiv directly from U.S. and allied
defense contractors. That money was allocated by Congress.
The USAI is a longer-term approach to arming Ukraine. It will
take years for all these weapons to be manufactured and shipped
to the battlefield. This category of weapon provides Ukraine a
sustained pipeline of modern weaponry and simultaneously
sustained revenue for manufacturers.
The amount of aid that still needs to be delivered from the
American contracts is "significantly less than 15 percent", a
Ukrainian official said. Some of the weapons still to be
delivered include advanced rocket launchers and missiles.
HOW DOES THIS AFFECT U.S. COMPANIES?
The halt to USAI not only impacts current orders, but also
future production plans and investment decisions for U.S.
companies such as L3Harris Technologies ( LHX ), Lockheed Martin
Corp ( LMT ), RTX Corp ( RTX ) and General Dynamics ( GD ).
It's unlikely that the U.S. government would cancel the
orders for Ukraine that have not yet been delivered. It could
decide to keep those weapons for itself.
Washington needs to replenish its own stocks and - instead
of placing new orders - could instead keep the weapons that were
bound for Ukraine, essentially reducing the future amount of new
contracts on offer to U.S. companies.
WHAT WEAPONS HAVE BEEN DELIVERED TO UKRAINE?
Among the weapons and equipment provided during the war are
U.S.-made F-16 fighter jets, long-range ATACM missiles, High
Mobility Artillery Rocket Systems (HIMARS), the Guided Multiple
Launch Rocket System (GMLRS), short-range air defense
interceptors, replacement vehicles, air-to-ground munitions, and
artillery.