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Allied Arsenal: Building Strength Through Shared Production

July 22, 2025
Allied Arsenal: Building Strength Through Shared Production
Allied Arsenal: Building Strength Through Shared Production

Allied Arsenal: Building Strength Through Shared Production

Trevor Phillips-Levine and Andrew Tenbusch
July 22, 2025

Throughout the 75-year history of NATO, no member has been attacked by Russia or the Soviet Union. In addition to its nuclear umbrella, the alliance achieved conventional deterrence by establishing strong interoperability standards, enabling large, distributed, and interchangeable munition stockpiles. All laser-guided weapons, regardless of origin, operate on a standardized laser pulse frequency. Networked weapons and sensors are guided through interoperable datalinks. Artillery shells and bullets are compatible and interchangeable with various allied gun systems. Today, global U.S. and allied munition stockpiles and defense-industrial capacity are at historic lows. Meanwhile, the pacing threat in the Pacific has unparalleled latent industrial strength and is becoming increasingly assertive.

In this security environment, where overmatch can no longer be assumed, deterrence requires long-range, interoperable, and interchangeable munitions to alter an adversary’s calculus. Conflicts are rapidly depleting existing stockpiles, and the United States lacks the industrial capacity to replenish them in sufficient time. Concurrently, allied defense industries require an infusion of capital, technology, and shared purpose. Co-manufacturing interchangeable weapon systems with trusted allies, particularly when combined with innovative employment concepts, presents a compelling solution. The U.S. government should seize opportunities for co-manufacturing and joint procurement of existing munitions with allies to maximize deterrence. Doing so will strengthen the credibility and resilience of the global defense-industrial base required to prevail in a major conflict.

 

 

Deterrence By Integration and Interchangeability

The geography of the Pacific presents a different problem set than the primary threat faced in Europe, demanding different weapon capability requirements. The framework that underpinned conventional deterrence in Europe, however, can still be applied, specifically the concepts of weapon interchangeability and interoperability. Fortunately, some already exist. During the Rim of the Pacific exercise in 2024, the U.S. Navy officially confirmed the existence of its long-range air-to-air missile, the AIM-174B, an air-launched adaptation of the Standard Missile (SM) 6 that was originally designed for warships. Standard Missile variants offer capabilities for engaging air, surface, and ballistic missile targets. The SM-6 forms the proven backbone of U.S. Navy air defense, with a 40-year lineage that traces back to the SM-2. Over the past 25 years, the U.S. Navy has fielded six variants, and has additional models in development, promising longer ranges and hypersonic engagement speeds.

The revelation of the AIM-174B sent ripples through global defense communities, particularly in China, as it demonstrated a previously unknown interchangeable use case. The interchangeability of the SM-6 between surface strike and air interception missions led to ambiguity and unease amongst Chinese observers about how the missiles could be employed. A Chinese weapons journal described the reveal of the AIM-174B as a “huge threat” that fundamentally upended China’s assumptions and war plans. Despite only recently appearing in the press, the AIM-174B was part of the Navy F/A-18 pilots’ training for years, highlighting its maturity and potential for allied integration.

The SM-6 and its variants are notable for their interchangeability and interoperability. When weapon systems are interoperable and interchangeable, alliances become more potent and reinforcing to U.S. military power. Such collaboration extends beyond providing weapons through foreign military sales or licensing — it includes targeting infrastructure that completes the weapons’ kill chain and feeds into a common operating picture. For example, the United States and its allies share interoperable tactical datalinks — primarily Link-16 — as well as highly sensitive reconnaissance feeds. Interoperable datalinks increase the number of sensors and shooters within the battlespace, enhancing the combined force’s lethality and survivability in combat.

The proliferation of interoperable tactical datalinks creates an environment ideal for the SM-6 family and other types of networked weapons. All variants can receive updates via these datalinks, enabling dynamic targeting and coordination across different platforms. The SM-6 is also integrated into the Army’s land-based Typhon mid-range capability, complementing the Marine Corps’ littoral regiments equipped with the Naval Strike Missile. Additionally, the SM-6 can be containerized for launch from a variety of platforms, including unconventional vessels and wheeled vehicles already in use. As mentioned earlier, the weapon was adapted for air-launch from U.S. Navy F/A-18s, offering a range significantly greater than that of the legendary AIM-54 Phoenix. Since Australia operates the same model of F/A-18s as the U.S. Navy, this creates a natural opportunity for integration. Together, the interchangeability and interoperability of the SM-6 offer diverse employment options while simplifying operational logistics.

Another notable weapon system is the Tomahawk Land Attack Missile. Japan, the Netherlands, and Australia have signed agreements to purchase the Tomahawk, joining the United States and the United Kingdom as operators of the missile system. According to reports, Germany is also considering the procurement of Tomahawks as it builds its military capacity. Beyond expanding the user base, the addition of Tomahawks to allied inventories also provides access to the Tomahawk network, potentially allowing the United States and its allies to share a common target database that increases magazine depth for strikes, as well as the speed at which they can be engaged.

A new variant of the Tomahawk, known as the Maritime Strike Tomahawk, is being introduced with the capability to strike both land and maritime targets. This version will provide a much-needed counterweight to the People’s Liberation Army Navy’s long-range surface strike capabilities without the expense of clean-sheet designs. Moreover, as with the land-launched SM-6, the Army’s Typhon battery can also launch Tomahawks, making the system a viable option for homeland and territorial waters defense for island nations such as New Zealand.

Credible Deterrence Through Forward Presence and Distributed Manufacturing

Deterring conventional conflict requires displays of credible capability. For example, consider the deployment of the Terminal High Altitude Area Defense system to South Korea in 2017, which was met with anger by China and a flurry of diplomatic maneuvering. A capability cannot deter a country if it is not deployed within an area where it can be effective. Displaying a capability requires a credible presence. Furthermore, a weapon’s capability lacks credibility if its stockpiles are limited or located far from the point of use.

This principle is evident in the Chinese media’s reactions to the public revelation of the AIM-174B. While some appreciated the capabilities that the AIM-174B could bring, others expressed skepticism about its viability. Negative opinions focused on SM-6 manufacturing limitations. These reactions suggest that for the deterrent value of the SM-6 or any weapon to be maximized, it needs to overcome its manufacturing constraints and be widely distributed in the Pacific theater. During U.S. wargames, the location and quantity of weapons receive as much scrutiny from commanders as the locations and numbers of the platforms that would use them. As Gen. Dwight D. Eisenhower famously observed, “You will not find it difficult to prove that battles, campaigns, and even wars have been won or lost primarily because of logistics.” In all contexts, distributed manufacturing with allies provides various logistical options and eliminates single points of failure.

Chinese military commentators also focused on the concept of expeditionary land-based weapon systems. Negative opinions concentrated on sustainment aspects, but notably not on engaging the weapon system itself in warfare. This likely suggests that China understands the difficulty in targeting land-based mobile systems, such as Typhon and Marine Corps Naval Strike Missile batteries, as evidenced by the Russo-Ukrainian war. Additionally, many of China’s anti-access weapon systems focus on capital platforms, such as warships, aircraft bases, and support aircraft, rather than trucks carrying missile launchers. China recognizes it is easier to interdict the logistics that sustain such forces, and its analysts know that the U.S. Navy will likely have to expose itself to deliver replenishment. Still, the recent Balikatan exercise, which featured the first deployment of Marine Corps Naval Strike Missiles to the Philippines, drew negative attention from China, indicating that the concepts and deployments of these capabilities are concerning to them. Sustainment exposure risk can be significantly mitigated if locally produced stockpiles already exist in theater.

A Case for Allied Interoperability and Co-Manufacturing

Co-manufacturing partnerships are invaluable, evidenced by the Russo-Ukrainian war, which significantly depleted U.S. stockpiles of 155mm artillery shells. Australia and South Korea, which also manufacture 155-milliimeter shells, helped replenish U.S. stockpiles. Similarly, conflicts in the Middle East depleted U.S. stockpiles of Standard Missiles, Tomahawks, and other munitions, representing years of industrial output and raising fears that depleted weapon stockpiles undermines U.S. readiness for conflict in the Indo-Pacific. Had allies such as Japan also been producing these munitions, expenditures would be less impactful and more quickly replaced. The number of munitions expended against the Houthis alone demonstrates that the United States will need allied help in a war with a peer.

Australia and Japan are in the process of acquiring the SM-6, with Japan discussing the possibility of a co-production agreement. Co-manufacturing arrangements serve as a means of scaling production, burden sharing, and achieving geographic distribution. Opportunities exist to expand upon existing cooperative development and manufacturing agreements, such as the World War II-era National Technology and Industrial Base or AUKUS, by including more allies. For example, Australia and the United Kingdom joined the National Technology and Industrial Base in 2017, with New Zealand joining in 2023.

Paradoxically, Japan and Norway are allies that have jointly developed and manufactured missiles with the United States but are not party to either framework. This is despite the United States and Japan’s joint development and co-production of the SM-3 Block IIA for ballistic missile defense, with Japan contributing rocket motors, boosters, and nose cones to both U.S. and Japanese assembly lines. Additionally, Japan and the United States are developing a glide phase interceptor under the Glide Phase Interceptor Cooperative Development Project Arrangement. In a parallel development, Norway is establishing manufacturing plants in Virginia and Australia to meet the surging demand for its Naval Strike Missiles.

U.S. missile production capacity constraints are attributed to bottlenecks in rocket motor manufacturing and the availability of rare earth supplies from China. To address these constraints, existing agreements with allies should be expanded to establish alternative sources of supply for vital components of the SM-6, Tomahawk, and other critical weapons. In the near term, Japan’s current production of SM-3 rocket motors and boosters should be expanded to include SM-6 specifications. This expansion allows other agreements, such as the AUKUS agreement with Lockheed Martin to build rocket motors for various missiles as part of the Guided Weapons and Explosive Ordnance enterprise, more time to build capacity from scratch.

To further mitigate the risk of supply chain disruptions for raw materials and critical components, the United States should also consider incorporating testing and adopting viable substitutes into the expansion of existing weapon agreements. For instance, Japan jointly developed seeker technology for the SM-3 and manufactures advanced missile seekers. The United States should examine whether allied indigenous designs can be integrated with its weapon systems. If not, it should consider broadening licensed manufacturing agreements to include these components, provided the necessary infrastructure exists, as in Japan’s example. Alternative suppliers should also be identified for rare earths, which are essential to electronics and gyroscopes. The United States should partner with allies such as Australia and Canada on rare earth projects, extending beyond domestic initiatives, to secure these critical supplies.

Focus on Munitions, Not Capital Platforms

Many U.S. allies find themselves in similar predicaments regarding budget constraints and the development of capital platforms such as ships and aircraft. For example, New Zealand recently raised its defense budget to $8 billion (NZ$12 billion). To compare, America’s newest Arleigh Burke destroyers cost between $2.1 billion and $2.5 billion each, with an average induction rate of 1.5 destroyers per year from a mature manufacturing line. In contrast, the SM-6 costs between $4 million and $8 million, meaning that the same budget could procure over 1,000 missiles instead. Today, the United States alone can produce up to 125 SM-6 missiles annually.

Despite increases in defense budgets from Japan, Australia, New Zealand, and other nations, constructing and deploying capital assets still takes years. In comparison, manufacturing and deploying munitions is much faster, especially for weapons that can be integrated with existing systems in a country’s inventory. In 2022, Proceedings published David Alman’s essay titled “Don’t Buy Warships (Yet).” Alman argued that to address immediate risks stemming from the U.S.’s lagging shipbuilding capability, the United States should prioritize procuring more munitions that can be mounted on other platforms capable of delivering them, such as submarines, land-launch systems, and aircraft. A Heritage Foundation commentary agreed, stating that the U.S. Navy’s problem is not the number of ships or aircraft but the number of munitions it can supply to them. As the analyses recognize, with any weapon system, a platform is the delivery method and the munition is what ultimately produces the effect. As the Heritage Foundation piece noted, “You can be the best shot in the world, but your expertise won’t count for much if you run out of bullets.” This reasoning applies equally to U.S. allies aiming to modernize their military in the near to mid-term, where balancing the number of bows versus arrows is essential as longer-lead projects come to fruition.

Issues

For decades, U.S. weapons cooperation was hindered by self-imposed restrictions and politics. Strict interpretations of the Missile Technology Control Regime prevented close cooperation on weapons, even with trusted allies. Simultaneously, International Traffic in Arms Regulations approval reviews for technology transfer presented another avenue for frustration, as the presumed position is one of denial. Fortunately, policy shifts have occurred, dramatically changing the defense landscape by dropping barriers. In January 2025, new guidance was issued to allow case-by-case flexibility in the approval of various missile, drone, and space systems for the Missile Technology Control Regime. AUKUS Pillar II exempts participating members from International Traffic in Arms Regulations approvals for “military and dual-use” goods, allowing for the free flow of materials and support at the speed of business.

Partner nation politics also come into play. For example, Article IX of Japan’s constitution was strictly interpreted as preventing the export of arms outside the country. Over time, Japan has reinterpreted its constitution. First, as was the case with the co-development of the SM-3 back in 1999, allowing co-produced weapons to be exported back to the United States, and later evolved into a more liberal viewpoint, one that supports regional peace and stability. Under the current interpretation, with China’s aggressiveness serving as the catalyst, Japan is attempting to export its Mogami-class frigate and associated technology to Australia, as well as older destroyers to the Philippines in the name of regional stability. From a political standpoint, headwinds are abating.

The risk of compromise is a concern for weapons cooperation and production. For example, in 2007, Japan launched an investigation into leaked data concerning the AEGIS weapon system. In 2025, the United States placed South Korea on a watchlist due to the mishandling of sensitive lab data. As part of agreements such as AUKUS, allies must be certified to handle U.S. secrets, which is a lengthy process. Once certified, cooperation should proceed freely and without obstacles. To help with certification, the United States should offer similar support to allies as it does with U.S. defense contractors in cyber defense and physical security that were instituted after high-profile breaches. Even if an ally cannot meet strict requirements, limited partnerships should still be considered if a component they produce can be used without risking the overall system.

Concerns about U.S. budgets and their impact on allied co-manufacturing quantities can largely be mitigated. Multi-year procurement arrangements provide a stable foundation for sustained production, even when U.S. budgets fluctuate. Such arrangements create binding commitments with cancellation penalties, ensuring stability across budget cycles while reducing unit costs. Additionally, co-production could utilize a consortium model that allocates a percentage of slots to U.S. orders for contingency — if unused, these slots would be used to fulfill other orders. The fulfillment of allied orders should be the primary concern of allied co-production initiatives, allowing domestic U.S. supplies to focus on U.S. government orders. By reserving a greater percentage of production capacity for allies like Australia and Japan, U.S. budget fluctuations would become a relatively minor disruption to overall co-production efforts.

Conclusion

The current U.S. administration has placed a priority on allies committing more to their defense. Problematically, some allies’ defense apparatuses have atrophied to the point where it is challenging to build production capacity for their existing military systems due to bureaucratic impediments or the loss of industrial bases. Relying on direct procurements from the U.S. defense industry is also not a viable solution, as it struggles to fill domestic demand. For example, the current U.S. administration is reviewing AUKUS and the decision to supply Australia with Virginia-class submarines. The Office of the Under Secretary of Defense for Policy stated that using U.S. shipyards to fulfill Australian orders could undermine the U.S. Navy’s position by delaying its own orders, despite Australia already committing funds to the project. These concerns extend to munitions as well, with the Defense Department halting arms shipments to Ukraine because of worries about dwindling missile stockpiles.

As China becomes more assertive and its economic and industrial-military strengths grow, the United States and its allies should identify ways to compete with a Chinese economy that focuses on large-scale industrial output. By 2030, China is expected to have a battle force of around 435 ships, complemented by thousands of missiles. With U.S. Pacific allies feeling threatened by China’s military expansion and assertiveness, it would be unwise to neglect deepening defense ties by failing to expand licensing agreements and manufacturing partnerships. Such “deals” could also be a way to offset trade imbalances with allies, an acute pressure point for the current U.S. administration, by paying licensing or royalty fees to U.S. companies. Additionally, these partnerships provide a vector for allies to allocate defense funding to revitalize their industries.

Deterrence is achieved by deploying credible capabilities and fostering strong alliances. The primary strategy is to prevent China from achieving an overmatch in the near to mid-term. The best approach is to demonstrate credible and proliferated stockpiles of interchangeable and interoperable munitions such as the SM-6 and the Tomahawk. To achieve this goal, priority should be given to leveraging existing allied production frameworks and capabilities in the near term, while building new capacity in the mid- to long term. Through co-manufacturing and integration, the United States can establish a distributed, resilient deterrent that magnifies the collective strength of like-minded nations in preserving regional security.

 

 

Trevor “Mrs.” Phillips-Levine serves as the integrated fires director for the U.S. Seventh Fleet in Yokosuka, Japan, where he frequently works with U.S. allies on operational planning and defense integration. Before this role, he held advisory positions focused on joint fires and unmanned systems at the Naval Aviation Warfighting Development Center. A career naval aviator, he has completed combat deployments with strike-fighter squadrons and Naval Special Warfare units.

Andrew “Kramer” Tenbusch is an F/A-18 weapons systems officer currently assigned to Strike Fighter Wing Pacific. He previously served as a fellow with the Halsey Alfa Advanced Research Group at the U.S. Naval War College, where he conducted operational wargaming and iterative campaign analysis focused on maritime denial, fleet design, and access challenges in the Indo-Pacific, exploring how emerging technologies, allied integration, and force posture can shape competitive outcomes in contested maritime environments.

The views expressed in this article are those of the author and not those of the U.S. Navy, the Defense Department, or any part of the U.S. government.

Image: Henry Villarama via DVIDS

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