Recent comments from Rahm Emanuel, the outgoing U.S. ambassador to Japan, have sparked significant discussion regarding the risks posed by American defence firms in comparison to China.

Emanuel stated that "the U.S. defence industry is a bigger risk to America's security and the credibility of our deterrence than China is," during an interview in Tokyo on January 9, 2025. He emphasized that American defence companies are prioritizing stock buybacks over investing in production capacity, which he argues has led to delays in weapon shipments critical for U.S. military readiness and its allies.

Emanuel expressed concern that these corporate practices undermine U.S. security interests and weaken alliances. He noted that he often had to use his political capital to address the failures of defence firms in delivering necessary equipment on time. In 2023, major defence contractors like Lockheed Martin and RTX allocated significantly more funds towards stock buybacks ($18.9 billion) than towards capital investments ($4.1 billion).

This perspective highlights a growing concern within U.S. defence policy circles about the industrial base's ability to meet national security needs amid rising competition with China. Emanuel's remarks reflect a critical view of how corporate priorities may be misaligned with national security objectives, potentially leaving the U.S. vulnerable in an increasingly competitive global landscape.

These insights from Emanuel underscore the complex dynamics between corporate interests and national security, particularly as the U.S. navigates its strategic posture toward China and other global threats.

Bloomberg