Defense & Aerospace Report Defense & Aerospace Report Podcast [Feb 22 ’26 Business Report]
Feb 22, 2026
Richard Aboulafia, aerospace strategist and analyst; Sash Tusa, European defense equity specialist; Dr. Ron Epstein, Bank of America defense market analyst. They discuss Supreme Court tariff fallout and what comes next. Transatlantic procurement tensions and buy‑American pressure. India’s Rafale naval order and impacts on production. KC-390 partnerships and tanker role versus C-27 dynamics. Airbus earnings and engine supplier disputes.
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Munich Sparked A European Defense Supercycle Trade
- European defense stocks rallied after Munich as investors priced a decade-long spending tailwind despite rich valuations.
- Large primes like BAE, Thales and Leonardo jumped 8–10% on expectations of sustained European defense budgets.
Procurement Threats Risk Driving Europe To Domestic Arms
- Threatening Europe over procurement choices undermines alliance trust and risks accelerating European re-shoring of defense procurement.
- Sash says transactional threats are ludicrous because Europe will spend more and pay the piper itself.
Canada’s Strategy Prioritizes Industry But Needs Capacity
- Canada's new defense strategy signals a major policy shift to prioritize domestic industry but lacks an existing broad defence industrial base.
- Panelists noted key Canadian capabilities exist (Pratt Canada, CAE, Bombardier) but full sovereign supply chains need rebuilding.