Trump Surrendered the Strait of Hormuz to Iran—& Emptied Shelves in America’s Arsenal: CHART OF THE DAY

Iran, the Shrunken Arsenal of Democracy, & Ukraine & Its hard-won know-how & know-what...

The constraint is not money; it’s steel, people, throughput—and our own procurement theology; if we were semi-rational and truly serious, Ukrainian engineers would already be running shell plants in Scranton and Tucson…

Yes, Trump’s attack on and then surrender of the Strait of Hormuz to Iran has left the U.S. military is massively weaker in a good deal of the areas that are likely to be most relevant in future near-term conflicts:

Source: JPM <https://assets.jpmprivatebank.com/content/dam/jpm-pb-aem/global/en/documents/eotm/semiquincententacles.pdf>, via Adam Tooze <https://adamtooze.substack.com/p/top-links-1150-has-the-debasement>.

Trump killed a lot of Iranian civilians. Trump destroyed a lot of Iranian military capabilities. But Trump lost the war, as Iran attritted the US military a lot more than the US attritted Iran. And other potential adversaries of the US military are now in much stronger positions.

My view? We need to start fixing this. And we need to start fixing it now. And we are going about it all wrong.

Think of it: Right now, Ukraine is scrambling to build a military-industrial production complex in a war zone, western defense contractors are debating whether to build up plants in Ukraine, and the pentagon is improvising “friend-shoring” arrangements and relaxing tech-transfer rules. Meanwhile, the U.S. defense-industrial base is still trying to climb out of the post–Cold War just‑in‑time, single‑source, boutique‑production trap it has dug for itself over thirty years. If we were sane, we would right now be spending money like water to build the Arsenal of Democracies on U.S. soil—with Ukrainian defense firms and their hard-won expertise as anchor tenants.

Guess at the numbers and the constraints. Jonathan Masters & Will Merrow (“Here’s How Much Aid the United States Has Sent Ukraine “<https://www.cfr.org/articles/how-much-us-aid-going-ukraine>) count roughly $190B in total US commitments to Ukraine as of end‑2025, with 2/3 being direct support and a large fraction of the rest is already flowing into American factories and workers producing replacement equipment. That is roughly 0.2 percent of U.S. GDP per year: fiscally trivial. The constraint is no longer primarily dollars; it is steel and people and throughput. The U.S. has been shipping artillery shells and missile interceptors to Ukraine faster than the factories can replace them. Elizabeth Hoffman, Audrey Aldisert, Cynthia R. Cook, Gregory Sanders, & Shivani Vakharia (“How Supporting Ukraine Is Revitalizing the U.S. Defense Industrial Base” <https://www.csis.org/analysis/how-supporting-ukraine-revitalizing-us-defense-industrial-base>) pointed out years ago that roughly half of what is called aid to Ukraine is actually investment in the U.S. defense-industrial base. Yet even now, more three years into the war, ramp‑up is painfully slow. Multi‑year contracts, long-lead items, workforce shortages, fragile sub‑tier suppliers—the usual suspects.

This is where Ukraine’s defense sector ought to come in—here, in Ohio or Texas or Arizona, not only in Kyiv and Lviv. The Ukrainians possess what American prime contractors lack: recent, brutal, granular experience of what works in high‑intensity industrial warfare under conditions of tight resource constraint and constant adaptation. They have learned, at catastrophic cost, how to iterate drone designs in months, not years; how to integrate commercial off‑the‑shelf electronics; how to fuse NATO‑standard and ex‑Soviet kit on the fly; how to design systems for repair by twenty‑year‑olds in muddy trenches rather than by Lockheed engineers in climate‑controlled hangars.

We have not.

So: if you are the United States, and you are even vaguely rational, you write very large checks, very quickly, to get that Ukrainian know‑how physically embedded inside your own industrial base. You do not, I think, rely on a future peace‑time Ukrainian plants network—sited under Russian missile range, dependent on fragile logistics, which may or may not exist in five years. You pay to bring the people, the designs, and the production philosophies here.

This is not charity. It is the most cost‑effective national-security industrial-policy investment available. A US that uses this moment to build an industrial base capable of producing, say, three to five times today’s annual output of key munitions—155mm shells, air-defense interceptors, loitering munitions, anti‑ship missiles—is a stronger US. Deterrence in Europe and Asia then looks very different. The surest way to avoid fighting a war in the 2030s is to be visibly, overwhelmingly prepared to fight one. Si vis pacem, para bellum.

Plus right now too many profits flow to firms whose main competitive advantage is their mastery of the Pentagon’s baroque acquisition system—and personnel with the right social-network connections. Some of these firms are technologically excellent from a production-efficiency point of view; most are not. We need competition and diversity inside the American industrial ecosystem—Ukrainian mid‑sized firms bringing different design philosophies and cost structures, co‑producing with U.S. primes or, frankly, competing with them. And we want the plants here.

Third, a world in which “Ukraine aid” is seen by American voters as “money we send to Kyiv” is a fragile world. A world in which “Ukraine aid” is seen as “funding the artillery shell plant that employs my cousin in Scranton” is a much more robust one. The Marshall Plan was politically saleable because it was also a full‑employment program for American steelworkers, farmers, and longshoremen.

So: pre‑authorize tens of billions, if not more, in multi‑year procurement for categories of munitions and systems that we already know we will need, regardless of how the Ukraine and Iran wars ends: shells, interceptors, drones, electronic‑warfare kits, counter‑UAV systems. Write contracts now, not after some hypothetical late-2028 “strategy review”.

It means standing up a dedicated facility—call it the Ukraine–U.S. Defense Production Corporation—with authority to offer loan guarantees, equity stakes, and expansion assistance to Ukrainian defense firms willing to enlarge their operatilns to establish U.S. subsidiaries and to partner with U.S. manufacturers. It means fast‑tracking visas for Ukrainian engineers and managers. It means harmonizing export‑control rules in advance so that technology can flow within a clearly defined U.S.–Ukraine–NATO production space without Howard Lutnick blocking things because he feels dissed. And it requires accepting redundancy, waste, and windfall profit. You do not, when your problem is that your magazine depth is too small for plausible conflicts, design a system that minimizes the chances that any CEO gets a windfall.

But the alternative is the current state of affairs:

• In which Trump pretends that simply halting aid to Ukraine—freezing programs like the Ukraine Security Assistance Initiative, as has already happened at times—does not reverberate through the order books of Lockheed, RTX, and their sub‑suppliers, slowing or cancelling production lines that we ourselves will need.

• In which European and Asian allies are concluding that the United States is a worse-than-fickle semi-ally with an insufficient arsenal.

• In which the major consideration in any future crisis is that we cannot afford to be again attritted the way that the Houthis and the Iranians managed to do to us.

A rational United States would not ask whether it can “afford” to underwrite a Ukrainian‑flavored arsenal on its own soil. It asks how quickly it can write the checks and pour the concrete before the next crisis closes the window. Put Ukrainian engineers on the shop floor in Pennsylvania and Alabama. Then, perhaps, ten years from now, we will look back and wonder why it took the destruction of Mariupol and Avdiivka for us to remember how an industrial great power is supposed to behave.

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