US Announces $725 Million Arms Package For Ukraine

The Pentagon announced Monday the latest arms package for Ukraine totaling $725 million, the largest since a $1 billion package in April. The arms package will include the second shipment of antipersonnel mines that President Joe Biden authorized.

According to a Bloomberg report, the latest arms package will also include air defense missiles and Javelin, TOW and AT-4 anti-armor weapons, counter-drone munitions, 155mm artillery shells and "equipment to protect critical national infrastructure," according to the Department of Defense.

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Last week, the White House asked Congress to provide an additional $24 billion in security assistance which it is seeking to designate as "emergency spending." The Biden administration requested $8 billion for the Ukraine Security Assistance Initiative to finance weapons contracts with U.S. defense contractors with the remaining $16 billion to be used for replenishing U.S. weapons stocks.

Major General Patrick Ryder, a Pentagon spokesman, told reporters "We understand the urgent situation in Ukraine and the president's direction and will continue to do everything we can to ensure that Ukraine is getting the aid that it needs."

Why It Matters: Government and military contracting companies, including General Dynamics Corp. GD, may benefit from the latest arms package to Ukraine. Specifically, the Javelin weapon system is produced by the Javelin Joint Venture, a partnership between Lockheed Martin Corp. LMT and RTX Corp. RTX subsidiary Raytheon.  

Investors can gain exposure to the broader aerospace and defense industry through ETFs that invest in U.S. government and military contractors including the iShares U.S. Aerospace & Defense ETF ITA and the SPDR S&P Aerospace & Defense ETF XAR. 

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