Private industry is more than capable of overcoming America’s missile shortfall—but to unleash it, the Pentagon must establish more regular acquisition patterns and a stable budget.

The Pentagon is expected to suspend delivery of Tomahawk missiles to Germany in the near future, reneging on a pre-existing arrangement and potentially leaving Berlin exposed to Russian aerial attack. When Politico reported the news, there was concern that the continued sale would further raise tensions with Russia. The real issue, however, is that the US lacks supply.  

Berlin had originally signed a deal in July 2025 to acquire more defense systems and missiles, valued at more than €1 billion ($1.1 billion). The deal would have included the purchase of roughly 400 Tomahawk missiles. Washington failed to follow through, and a subsequent request was sent out this May. Germany Defense Minister Boris Pistorius has sought agreement through his relationships in Washington with Secretary of Defense Pete Hegseth and a visit to the Capitol last summer, but to no avail. Other allies, like Japan and the Netherlands, have been left cold as well. They still await the delivery of the requested Tomahawk purchases—but American stockpiles have been overdrawn by strikes in the Middle East and an overstretched deterrence strategy spread across multiple theatres. As it stands, the United States’ manufacturing base is unable to get into an arms race with Russia. Current goals have constrained capacity and weakened American allies by distributing supplies before building the ability to replenish. 

Understanding America’s Missile Shortfall

On June 11, President Donald Trump acknowledged the supply gap failure, invoking the Defense Production Act in order to bolster the US missile stockpile. In a memo explaining the decision, Trump wrote, “Systemic constraints in the munitions industrial base … may impair the ability of the United States to produce, sustain, and expand the availability of munitions, missiles, and equipment required for the national defense.” 

The numbers verify Trump’s sense of emergency. Before the US strikes on Iran, the military’s operational inventory consisted of more than 3,000 Tomahawk missiles. According to the Center for Strategic International Studies’ reporting estimates from May, the United States has already depleted well over 2,000 Tomahawk and Patriot missiles; if these reports are accurate, only around 1,000 missiles remain in its operational inventory. Many operational weapons have been committed to contingency planning for potential action in the Indo-Pacific, but are now being moved to the Middle East.

The production rate for new missiles sits at roughly 200 per year, but the Fiscal Year 2027 (FY27) request has shot up to 785. The Navy alone has requested a 1,200 percent increase in Tomahawk missile procurement, but at the rapid pace of depletion and current production capacity, reconstitution is likely to take eight to 10 years. This is an unacceptable timeline, given global developments.

The shortage did not develop overnight. It is the predictable result of decades of procurement decisions that systematically destroyed the market signals on which any healthy industrial base depends. Small, irregular orders gave suppliers no basis for investing in long-term capacity. Sole-source contracts eliminated the competitive pressure between contractors that would have otherwise driven efficiency and expansion. And the Pentagon’s historical preference for “cost-plus” contracting, in which a firm’s payout was tied directly to its costs, removed any incentive to innovate in order to reduce its costs and increase its profit margin.

This problem runs far deeper than a single defense manufacturer. Each Tomahawk missile contains more than a thousand precision components. These are sourced from a labyrinthine web of specialised suppliers, many of which are the only firm making their piece of the missile. These suppliers also often rely on niche materials like refined rare earth metals, which have been impacted by increasing demand from tech companies and Chinese export controls. As Michael Cadenazzi, the Assistant Secretary of Defense for Industrial Base Policy, acknowledged publicly in early 2026, the department continues to face “nasty issues in the supply chain and the industrial base”—issues that defy any easy resolution. To see the cause of these “nasty issues,” the American government can look nowhere but inwards.

One great hope for America’s ability to rebuild its missile stock is the addition of AI to the assembly line, which has exponentially advanced automation. The American government must ensure that it does not impose regulations that stand in the way of the ability of defense contractors to use AI to scale up their production capacities. The state must embrace the private defense sector and set the regulatory conditions that allow it to flourish. Skilled labour shortages and supply chain fragility both have regulatory dimensions. The question for policymakers is not how to direct these companies, but how to remove the frictions—such as licensing requirements, ITAR restrictions, and slow-moving qualification processes—that delay commercial innovation from entering the supply chain, preventing more of them from emerging and scaling up more quickly.

How Advanced Manufacturing Can Accelerate Defense Production 

One manufacturing startup, Hadrian, has taken initiative on its own, recognising the imminent need for faster production of defense products. It has built an AI-driven precision manufacturing platform that shrinks the time needed to train its human operators to only 30 days. The approach accelerates output by allowing production to be replicated across new sites without the years (or decades) long apprenticeship model that currently bottlenecks capacity. It resolves one of the most common problems heard in industry today: the lack of onshore skilled labour. For complicated weapons like Tomahawk missiles, this scalable production capacity is critical. In a confirmation that Hadrian’s technology is already a differentiator, its model has already convinced Lockheed Martin to sign onto a production contract with the manufacturer.  

Similarly, aerospace companies, racing to win in the frontier sector, have transformed the manufacturing space by using AI-designed, 3D-printed rockets. The combination of the two has created stronger, more competitive products, made at a fraction of the cost and time. Ursa Major, for example, uses additive manufacturing, which is essentially a more robust form of 3D printing. The process reduces multi-part assembly into a single printed structure—or, in other words, a single stage of the assembly line. Additive manufacturing simplifies this structure further: there is no longer any “line,” only a single point of assembly. This eliminates fragile and diversified supplier dependencies and cuts the production timeline down from months to weeks. For a missile like the Tomahawk, whose solid rocket booster is one of its longest-lead components, this kind of manufacturing compression could fundamentally alter reconstitution times.

Leap71, only founded in 2023, is another leading manufacturing company, creating “Large Computational Engineering Models”—akin to large language models (LLMs), but for engineering—which function as advanced AI for incredibly complex engineering tasks. The program is revolutionary in its ability to imagine and build rocket engines, more efficient and more powerful for their size, in only a matter of days.

For the American industrial supply chain, Hadrian demonstrated this impact of AI through a 50 percent reduction in lead times for precision-machined components. Chris Power, Hadrian’s CEO, recently illustrated the problem, pointing out that many critical defense systems ultimately depend on “one guy named Bob knowing how to make the component in his head, 10 layers deep in the supply chain.” Without an AI system underlying assembly, manufacturing can rely on critical dependencies. These become critical weaknesses and chokepoints for failure. Hadrian’s core vision is to make these critical dependency concerns obsolete. In partnership with California-based defense darling Anduril Industries, this vision appears even more feasible as the companies come together to meet manufacturing goals for Anduril’s autonomous systems. 

The most important thing to understand about Hadrian, Ursa Major, and Leap71 is that none of these companies were created by the government. They were not the product of a government industrial strategy, a Pentagon-directed R&D programme, or a congressional earmark. They emerged because entrepreneurs identified an unmet need, raised private capital, and built something. These firms are proof of what the private sector can achieve. Policy should be shaped around enabling more of them.

Washington Must Turn Manufacturing Innovation Into Strategic Capacity

None of these companies existed a decade ago, yet they have all scaled to production capacity within the past three years. The Trump administration’s invocation of the Defense Production Act, encouraging suppliers to form voluntary agreements to coordinate production, acknowledges the need for these innovative manufacturing techniques at the policy level. This signal is a symptom of prior government failure; to truly meet growing demand and to rebuild its missile supply, the government will need to match its rhetoric with conditions that allow the producers which can deliver the volume needed at the speed needed to flourish. 

The American government must deliver demand certainty through the market. Multiyear, binding purchase commitments—actual contracts that give manufacturers a reliable and stable revenue horizon—would achieve more than any emergency power. This is not industrial policy in the interventionist sense; it is the state performing the same basic contractual function as a customer in the private sector. A manufacturer who knows the Pentagon will purchase precisely 800 Tomahawks per year for the next 10 years will be able to work out the capital investment needed to build the capacity to produce them. A manufacturer who has watched demand vacillate unpredictably between 100 and 800 units at the whim of successive budget cycles will not. The problem has never been that the US market cannot supply national defense; it is that the government has been too unreliable a buyer.

America’s recent suspended order to Germany should come as a warning. The next delay in supply may halt weapons systems needed in Taiwan, South Korea, or even Middle Eastern partners who are now heavily reliant on the American supply chain. Supply chain delays can be catastrophic for any military operation, but advances in manufacturing could sustain American alliances and relieve the current strain. 

Industrial Base Failure: A Cautionary Tale from the United Kingdom

My own country, the United Kingdom, has shown precisely what happens when a state hollows out its defense industrial base over decades and then pretends the consequences will not arrive. When the UK’s base at RAF Akrotiri was struck by an Iranian drone, the UK scrambled Typhoons to intercept slower-moving threats, but it was unable to counter ballistic missiles at all. Our contribution to the collective defense of the Gulf, a region of enormous strategic and economic importance to Britain, amounted to just four extra jets and a few hundred additional personnel. That is the ceiling of what we could offer. 

The UK’s shortfall on Cyprus was not a political choice, but a physical one. A former senior British general had already warned that, in a genuine high-intensity conflict, UK forces would exhaust their ammunition, spare parts, and supplies within days, and Parliament’s own Defence Committee previously warned that replenishing munitions stockpiles, already drained by support for Ukraine, would take a decade at current production rates. That warning was largely ignored.  

The UK has now fallen out of the top ten global manufacturers for the first time in its modern history. Britain now faces a confirmed £28 billion ($37 billion) black hole in military funding over the next four years, and its Chief of Defence has been forced to tell the Lords committee that, without additional resource funding, the military will have to “dial back” its exercises and operational commitments. The country that once maintained 51 destroyers and frigates now fields 13, many of them aging. Allies have become, as Chatham House put it, “increasingly sceptical of Britain’s ability to function as a military actor.” This is the consequence of a state that, rather than creating the conditions for a sovereign industrial base to flourish, managed defense procurement through bureaucratic centralisation, unreliable demand signals, and a preference for off-the-shelf foreign purchases that hollowed out domestic capability. 

The question for America, then, is whether it rebuilds its production capacity at peacetime speed or at the pace at which the threats it faces demand. History suggests the latter only happens after a shock. The goal must be to avoid requiring one.

About the Author: Harry Richer

Harry Richer is the director of Fighting for a Free Future, under chairman the Rt Hon Steve Baker FRSA. He worked for several years as a senior aide in the British Parliament, regularly writes for UK-based media, and has also co-written multiple publications on Austrian School economics, including the book The Age of Debt Bubbles (Springer, 2024).

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