Court Painter periodically reviews the latest in the evergreen war economy—lest we get too distracted by peace and prosperity.
GZERO Daily June 9,2025
The New Global Arms Race: Who’s Buying, Who’s Selling, What’s at Stake
Welcome to the new global arms race: faster, smarter, more dangerous and more expensive than ever. In 2024, world military spending surged to a record $2.7 trillion, the steepest annual increase since the Cold War’s end, driven largely by European, Asian and Middle Eastern nations.
Who’s buying?
Faced with threats from Russia, Europe has ramped up defense budgets, with Poland’s spending growing by 31% to $38 billion and Sweden’s by 34% to $12 billion in its first year of NATO membership. Germany increased military expenditure by 28% to $88.5 billion, making it the fourth-largest spender globally and rearming the nation that precipitated the two major world wars of the last century.
In the Middle East, Israel’s military spending soared by 65% per cent to $46.5 billion, the largest annual rise since 1967, amid its war with Hamas in Gaza and conflict with Hezbollah in South Lebanon. In Asia, China spent 7% more on its military in 2024, adding an estimated $314 billion, raising fears of an imminent operation against Taiwan, which boosted its military spending by 1.8% in 2024 to $16.5 billion. Fellow Asia-Pacific power Japan saw its military budget rise by 21% to $55.3 billion, its largest annual increase since 1952.
Who’s selling?
Traditional arms exporters like the United States, France, Russia, China, and Germany continue to dominate the market. However, emerging players such as India, Turkey, and Israel are increasing their share. Notably, Israel’s defense exportsreached a record $14.8 billion in 2024, with Europe accounting for 54% of sales, up from 35% the previous year.
What’s on the wish list?
Today’s arms race is not just about quantity, but technology. Nations are investing heavily in next-generation weapons, including drones, hypersonic missiles, artificial intelligence, cyber capabilities, and space-based systems.
In the US, President Donald Trump’s desire for a “Golden Dome” missile defence system akin to Israel’s “Iron Dome” would add $175 billion to Washington’s arms budget over the next three years. It would also require the cooperation of neighboring Canada, at a price of either $61 billion or 51st statehood – Prime Minister Mark Carney has made clear that the second option is not on the table.
At the other end of the spectrum, however, Ukraine’s recent “Pearl Harbor moment” attack on Russian strategic bomber airfields was carried out with a fleet of $300 consumer-level drones, raising questions about what technologies are most valuable and effective for 20th century warfare.
The political tradeoff: guns or butter
All of this military spending will put a dent in national budgets, possibly requiring cuts to social benefits, increased debt, or fewer government services. If voters aren’t convinced that national defense is worth the tradeoff, the Great Rearming could trigger a significant popular backlash in the coming years.
