US Defense Industry Offsets

This book examines U.S. Government promotion of defense industry offsets, from both theoretical and empirical perspectives.

Defense industry offsets are extra benefits that exporters add to arms deals to meet importer demands beyond basic transactions, often considered essential for exporter success. Nonetheless, the so-called “hands off” presidential policy on offsets is often misunderstood as an ironclad prohibition against government support for American companies. In reality, the U.S. president can authorize exceptions for national security. This book demonstrates why the president sometimes goes “hands on” for offsets as a foreign policy tool, such as when government encouragement clashes with anti-offset stakeholders concerned about job losses, technology transfers, and diminishing political support. Even so, competition with defense exporters from other countries and concerns about weak allies that fall short on burden-sharing responsibilities can override domestic constraints. This book examines the evolution of U.S. offset policy via analysis of case studies covering engagement with, respectively, the United Arab Emirates, Poland, and India. By challenging common misperceptions, this book expands our understanding of American foreign policy and highlights the government’s role in using offsets for the benefit of the U.S. national interest, the defense industrial base, and security alliances. Furthermore, this analysis is broadly applicable to wherever importing countries apply their own policies and practices with offsets.

This book will be of much interest to students of defense studies, strategic studies, U.S. politics, and International Relations.