The Biden administration cleared the way for a massive arms sale to the United Arab Emirates, but Abu Dhabi’s growing ties to China reportedly could snarl the $23 billion deal, which includes the F-35 stealth fighter.
After a review concluded last month, the White House notified Congress that it plans to approve a deal brokered under the Trump administration to sell up to 50 Lockheed Martin (LMT) F-35 jets, 18 General Atomics Reaper drones and scores of munitions.
The UAE has wanted the F-35 for several years and expected to obtain it after establishing diplomatic ties with Israel in August 2020. Israel typically gets a five-year head start over other U.S. allies in the Mideast when buying new weapons.
But despite its approval, the Biden administration is still negotiating the terms of the agreement. Talks are focused on U.S. requests that Israel maintain its quantitative military edge, that U.S. weapons aren’t used in Yemen and Libya, and that China and other third-party countries don’t have access to the F-35 and Reaper technology, according to a Wall Street Journal report.
Israeli Prime Minister Benjamin Netanyahu and Defense Minister Benny Gantz have said publicly that they will not oppose the sale of the weapons to the UAE.
But the UAE’s growing ties with China could sink the deal. The People’s Liberation Army has sent equipment to the UAE, raising concerns that China could be building a base in the country, sources told the Journal.
An official told the media outlet that Washington has said that allowing China to build a base in the UAE would terminate the weapons deal. But the official added that the U.S. and UAE might not agree on what a “base” entails.
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Shares dipped 0.5% to close at 385.85 on the stock market today. Top F-35 subcontractor Northrop Grumman (NOC) lost 0.6% and engine supplier Raytheon Technologies (RTX) edged down 0.25%.
Last month, Lockheed management said it saw strong opportunities under President Biden for international defense cooperation and that would benefit the company.
But even as more allies clamor to get the jet, the F-35 faces yet another testing delay. The jet might not complete a major piece of its combat simulator testing until September 2022, according to a Bloomberg report.
The Pentagon needs the simulation testing for the F-35’s Initial Operational Test & Evaluation, which clears the way full-rate production to begin.
Follow Gillian Rich on Twitter for defense news and more.
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