Donald Trump is at it again. (Or is he?)
Last week, the Tweeter-in-Chief announced on Twitter his intention to "greatly strengthen and expand [America's] nuclear capability until such time as the world comes to its senses regarding nukes." As you might expect, the Interwebs immediately erupted in outrage, with Trump detractors painting the tweet as equivalent to the declaration of a new arms race.
But was it, really?
Media outlets, from the usually level-headed The Hill to the liberal-leaning Washington Post to the downright colorful Mother Jones, criticized the president-elect, warning that tweets of this sort "could provoke global crisis" (The Hill) or even "unleash nuclear catastrophe" (the Post). And in the instant case, warned Mother Jones, Trump's nuclear tweet seems to reverse "decades of ... policy aimed at stopping the spread of nuclear weapons around the world. For decades," it continued, "the United States has worked with Russia, the other major nuclear power, to reduce both nations' nuclear arsenals. ... Yet with a single tweet, Trump suggested he would move in the opposite direction."
Which sounds bad -- if it were true. Fortunately, it simply is not.
Fiction and facts
Whatever you think about nuclear weapons -- or about the president-elect choosing to communicate defense policy by tweet -- critics of Trump's nuclear tweet are getting a couple of basic facts wrong here. First, that President-elect Trump is initiating a nuclear arms race against Russia. He's not.
At worst, Trump is taking the bait offered by Russian President Vladimir Putin, who according to the U.S. State Department violated the 1987 U.S.-Russia Intermediate-Range Nuclear Forces Treaty by resuming tests of nuclear-capable cruise missiles in 2014. Russia has reportedly also begun modernizing its nuclear forces, ordered practice runs at conducting pre-emptive nuclear strikes, and even drawn up plans for a new nuclear "dirty bomb." Responding to such provocations by expanding America's own nuclear forces may not be great policy from a mutually-assured-destruction point of view -- but it's not the same thing as starting an arms race.
Russia seems to have already done that.
And when you get right down to it, even if America were starting an arms race, it wouldn't be Trump's doing -- but President Barack Obama's.
The truth about nukes
While Trump's nuclear tweet appears to have taken some folks off guard, the fact is that the U.S. has been planning a major upgrade and refurbishment of its nuclear arsenal for quite some time -- since at least the early years of the second Obama administration, in fact. As far back as three years ago, we were writing about a U.S. Air Force effort to begin upgrading the nation's aging fleet of Minuteman III intercontinental ballistic missiles -- a contract that Aerojet Rocketdyne (NYSE:AJRD), among others, is counting on to juice its rocket revenues. Rival rocket scientist Orbital ATK (NYSE:OA) is bidding on the same contract, and whether it's Aerojet or Orbital that eventually ends up winning this piece of the nuclear rearmament project, there should be money aplenty to go around.
As details about the Pentagon's plan have emerged, it's become clear that this will be a sizable program, amounting to perhaps $1 trillion in spending over 30 years -- not just to upgrade the Minuteman missiles, but also to buy new B-21 stealth bombers from Northrop Grumman (NYSE:NOC) and have General Dynamics (NYSE:GD) and Huntington Ingalls (NYSE:HII) design an entirely new class of ballistic missile submarines (to be known as the "Columbia class.")
The sum total of these upgrades will be to "greatly strengthen" America's nuclear arsenal with technological improvements to the missiles and added stealth capability for the delivery systems -- "expanding" our "nuclear capability" considerably.
What it means to investors
Given the media's reaction to Trump's nuclear tweet, you could be forgiven for getting the impression that this is some harebrained scheme the president-elect has just come up with -- one that will likely be dashed by the outpouring of public disapproval on social media. That couldn't be further from the truth.
This is not a case of Trump going rogue and taking the Pentagon by surprise with some cockamamy idea about starting an arms race. To the contrary, the trillion-dollar project to upgrade America's nuclear arsenal enjoys the full support of the Pentagon brass -- and of the current administration, and of defense contractors like Aerojet, Orbital, Northrop, General Dynamics, and Huntington Ingalls, which all stand to profit from it.
The plan has been set in motion, and however strongly some folks might oppose it, it's not going away.