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America’s defense industrial base cannot build the Navy out of the threat it faces. Decades of industry consolidation, persistent resource shortages, and inconsistent demand signals have delayed the production of critical vessels and munitions. With production bottlenecks stacking up, the Navy may have no choice but to let its allies do some of the building.
Both the National Defense Strategy and Navy Warfighting Instructions highlight how mobilizing allies can field more forces to the mutual benefit of the United States and its strategic partners. Likewise, the latest U.S. Navy Shipbuilding Plan stresses the importance of allied investment and production.
The Trump administration has been putting these plans into action, having already outlined plans to coproduce platforms like icebreakers and submarines. The next step is robotic and uncrewed systems, which play a central role in Golden Fleet concepts. To that end, the United States, United Kingdom, and Australia recently agreed to codevelop undersea submersibles as part of AUKUS Pillar II’s commitment to share advanced capabilities.
The AUKUS announcement should just be the start. Coproduction of uncrewed systems with capable partners, including countries like Japan, could expand total defense output, helping deliver the thousands of low-cost, attritable systems required to deter and win protracted conflicts.
Japan stands out as a place to put this principle into practice. However, successful coproduction is not guaranteed. Although Japan is well-positioned to support high-tech manufacturing at scale, there are still significant legal, political, and security barriers on both sides of the Pacific. Overcoming these barriers, including security risks overseas and political resistance to offshoring in the United States, requires the correct balance of policy and financial incentives.
Constraints on the U.S. defense industrial base are well documented. Labor scarcity, supply chain vulnerabilities, and aging infrastructure delay new vessel construction. Meanwhile, complex acquisition policies and fluctuating demand signals discourage defense firms from making the investments necessary to expand their capacity.
Investments in shipyards by U.S. entities and foreign firms aim to fix these problems by modernizing old infrastructure and production methods. But infrastructure investments take time to mature, and even if domestic manufacturers could produce within the United States, coproduction would still yield strategic gains. Not least, transporting assets to the Western Pacific is costly and time-consuming. That “tyranny of distance” complicates U.S. Navy logistics and limits time in theater.
Coproduction, most likely to take the form of licensing existing designs, offers a way to manufacture assets at scale closer to where they are needed. Producing robotic and autonomous systems within the First Island Chain would ensure assets are near the area of operation the moment they roll off the assembly line. And although these factories would be located within striking distance of adversaries, allied coproduction offers opportunities to field more forces while distributing production away from just a few critical sites. That is why the 2026 National Defense Authorization Act includes provisions for drone coproduction with Taiwan. Similarly, plans were announced in 2025 to produce and store munitions in the Philippines. In both cases, overseas production, while not without risks, aims to bolster mutual security by building a more secure, interconnected network in the region.
Japan stands out as a candidate for drone coproduction given its history of security cooperation with the U.S. Navy. It is home to the Navy’s Regional Maintenance Centers at Sasebo and Yokosuka, indicating its modernized infrastructure to support work on Navy assets and systems. Numerous Japanese firms have the required capacity and expertise, including Mitsubishi Heavy Industries, a major global shipbuilder, pre-certified through Master Ship Repair Agreements.
Although coproduction is relatively limited with most allies, the United States and Japan have a track record of joint defense manufacturing. Current efforts include the licensed manufacturing of Patriot Advanced Capability-3 missiles and Mk-41 Vertical Launch Systems, and the joint research and development of the complex SM-3 Block IIA interceptor demonstrates Japan’s capability to share the research and development burden for highly complex defense technologies. There is existing political and strategic scaffolding to support additional security cooperation, like Golden Fleet.
For example, Japan’s automated “smart factories” with precision robots are capable of rapid assembly involving repeated tasks like the manufacturing of aerial and maritime drones. In addition, Japanese innovations in materials and components, such as lightweight carbon fibers, heat-resistant ceramics, and lithium-ion batteries, can enhance the durability and range of robotic and autonomous systems assets.
Despite the economic opportunities, unlocking Japan’s manufacturing capacity also introduces some risks.
Japan’s homegrown drone industry is small and relies heavily on imports, particularly electronic components from China. The broader electronics industry, including control and guidance components built into drones, is similarly import-dependent, in critical minerals and materials supply chains. Although working with Japan could unlock manufacturing capacity, it does not solve the problem of adverse penetration or control of upstream supply, nor eliminate foreign dependencies for America and its allies.
But it does help shore up critical supply chains where possible. Neither Japan nor the United States has sufficient domestic supplies of minerals like graphite or gallium. However, greater policy coordination, including trade deals focused on critical supply chain security, helps internalize the risk by incentivizing allied trade through favorable market concessions.
Similarly, resource shortages, including a shallow labor pool, are a problem in Japan and many other advanced industrialized economies. But coordinated production can help internalize that risk.
The same is true of sharing advanced technologies. Most notably, Rapidus is a state-led effort to restore Japan’s semiconductor industry by combining Japanese resources with IBM’s expertise to create new, advanced semiconductor fabrication plants. The focus has been on advanced, high-end chips with dual-use applications. Targeting two-nanometer semiconductor production, these investments promise chips with greater processing speeds, well-suited for fast decision-making in AI-enabled robotic and autonomous systems.
Those chip investments, along with similar U.S. efforts, help internalize the design and production of next-generation chips for future forces.
Regional competition incentivizes U.S.-Japanese security cooperation, but it also generates challenges. Tokyo and Washington share an interest in deterring conflict with China and maintaining freedom of navigation. Japan’s U.S. treaty alliance, along with the two countries’ technology-sharing agreements and recently increased defense spending, signals commitment.
However, Japan’s actions are watched closely in the region. China, North Korea, and Russia routinely frame any Japanese efforts to mobilize defense manufacturing as offensive posturing. Political statements on freedom of navigation, especially around Taiwan, have exposed Japan to accusations of militarism and agitation. And Japan’s domestic policy changes, including revisions to export controls that now permit the export of previously restricted defense items, have triggered Chinese opposition.
There are also domestic political barriers. The April 2026 revision to export controls was a milestone, but it was contested and took years to negotiate, and does not answer the question of how Japan will respond to specific coproduction requests for offensive-capable systems. Even after reform, there are still significant internal frictions within the ruling coalition as well as public sensitivity toward remilitarization. Japan’s scientific community, for example, has been skeptical of recent defense-related research and development efforts.
Assets like anti-mining submersibles and aerial surveillance drones are among the recent spending priorities covered in Japan’s recent coastal defense spending. However, offensive capabilities, like one-way attack drones, will likely be a much harder sell politically and regionally. That means, although deeper security cooperation is possible, coproduction arrangements may have to exclude certain capabilities.
Coproduction requires political effort. Within the United States and abroad, strict export restrictions and other controls on sharing sensitive technologies can impede collaboration. Take, for example, the difficulties making progress on AUKUS Pillar II. Differences in classification schemes and clearances for personnel, both of which exist for good reasons, unintentionally limit cooperation.
The Pillar II experience shows that, even among close allies, there is need for lasting political commitments amid changing leadership. But the AUKUS members’ recent push toward undersea drone development signals persistence.
Coproducing robotic and autonomous systems will test whether the U.S. and Japan can build upon their existing foundation to establish joint standards for technology sharing and clarify operational requirements early in the process. Luckily, drone manufacturing may be a lower hurdle than ship or missile production, particularly given Japan’s recent moves to incentivize dual-use technologies. Like in the United States, Japan is betting on a wider set of firms being able to produce drones than just the major shipbuilders. In the last few years, Japan has passed legislation focused on advanced technology development, including the creation of the Defense Innovation Science and Technology Institute, similar to the American Defense Innovation Unit.
Coproduction also requires buy-in from partners. Licensed manufacturing, whereby a foreign firm may simply “print” units of an established design, is attractive because it produces ready-made forces while skipping over the costly design, testing, and evaluation phases. But licensed manufacturing generates little enthusiasm overseas, as partner governments and firms typically prefer to play a more active role in development. Co-development increases the potential gains from technology transfer and information sharing while also allowing partner countries to play a more direct role in shaping capabilities for their individual needs. Therefore, although licensed manufacturing is a potentially lower-cost option, future coproduction efforts will likely have to carry a promise of incremental expansion toward more sought-after co-development and sustainment plans.
Coproduction with Japan will also run into resistance in Washington. Members of Congress from shipbuilding and defense‑industrial districts have strong incentives to keep high‑value production and jobs inside the United States. Proposals that sound like “offshoring” defense manufacturing, especially for critical technologies, are likely to face skepticism from both parties. Labor unions and major defense primes, which have invested heavily in existing U.S. facilities, may also oppose arrangements that appear to shift work overseas.
Recent legislation and political rhetoric reinforce this dynamic. Both the previous and current administrations have emphasized “re‑shoring” and “friend‑shoring” critical supply chains, and Congress has funded substantial incentives to expand domestic semiconductor and shipbuilding capacity. When discussing coproduction, simply asserting that allies can build cheaper systems will not overcome concerns about losing industrial jobs, eroding the defense industrial base, or transferring sensitive technologies abroad.
Yet the pressing need for uncrewed systems is already driving organizational shifts and motivating faster acquisitions. When framing arguments for coproduction, security cooperation planners should stress to stakeholders that coproduction may very well be in addition to — not in lieu of — domestic manufacturing. For example, the current administration’s emphasis on burden-sharing aims to mobilize overseas manufacturing for joint security. Burden-sharing efforts focus primarily on increasing arms sales to critical allies, but there is also an opportunity for U.S. firms to license their designs abroad, providing partners with proven and interoperable capabilities.
Coproduction also presents a way to complement efforts to keep U.S. manufacturing online, taking advantage of manufacturing capacity overseas while U.S. investments mature. Coproduction does not have to mean placing fewer orders with domestic contractors. Instead, it means licensing out designs to capable foreign firms, adding critical assets to help meet the Navy’s force readiness goals while increasing joint security.
Licensing fees may be smaller than sales of U.S.-made assets, which means coproduction will require the proper financial incentives. Defense planners and firms will have to agree on fair compensation to incentivize licensing while keeping overseas production costs affordable. Making those determinations will depend on the partner country and technology, and prices will ultimately make or break cooperation.
Allies and partners can help the Navy meet force design and readiness — but it requires that the correct political, legal, and financial challenges are overcome. Japan highlights what some of those challenges are: a heavily import-reliant economy as well as political tensions both at home and in the region. Add to that the barriers within the United States, including strict export limits, and it becomes clear that coproduction is a daunting task.
But self-sufficient defense production has been tried for decades and has not worked. The Navy has too few new ships — and too few ready ships — due to challenges facing the domestic industrial base. Coproduction, initially through licensing of existing technology, offers a workaround. U.S. plans and strategies increasingly recognize the untapped manufacturing capacity abroad. If allies can produce at a reasonable cost, with fair compensation for licensed capabilities, then deeper, more robust coproduction arrangements are well worth the effort.
Jeffrey Kucik, Ph.D., is a research scientist at CNA and a fellow at New York University’s Wahba Initiative for Strategic Competition.
Noah Moyer is a research assistant at CNA.
Darlene Onuorah is an associate research analyst at CNA.
The views expressed are solely those of the authors and do not necessarily represent the opinions of CNA, the U.S. Navy, or the U.S. government.
Image: Petty Officer 1st Class Robert Zahn via DVIDS.
