Does ITAR Threaten Western Deterrence? Anduril Is Considering a Mega-Plant in Europe
The defense technology sector is undergoing a transformation that is increasingly calling into question certain principles of U.S. export policy. The widespread deployment of low-cost unmanned aerial vehicles in Ukraine and the Middle East has shown that the outcome of future conflicts will not be determined solely by the technological sophistication of individual weapons systems. Equally important are production speed, the scale of industrial capacity, and the ability to flexibly involve allies in the development and production of modern weapons. This shift is now being championed by the American company Anduril Industries, which argues that the current export control system – the International Traffic in Arms Regulations (ITAR) – no longer meets the demands of today’s security environment.
In an interview with the Financial Times, the company’s CEO, Brian Schimpf, therefore called for a fundamental change in the current approach. “We need to overhaul the export control system so that other countries can also contribute to total deliveries,” Schimpf said. According to him, the growing demand for affordable, mass-produced weapons systems creates an opportunity for much deeper involvement of allies in the U.S. defense industrial base. This is not just about increasing U.S. arms exports, but about building manufacturing capacity across allied nations.
At the same time, the Anduril CEO points out that Western allies face a far more fundamental problem than the development of new technologies itself: “Manufacturing capability is likely the biggest gap in deterrence that we, as the Western Alliance, face. If individual nations get involved in both procurement and actual production, it will be a very positive step.” From his perspective, industrial capacity is just as important a factor as technological superiority. Without sufficient production volume, even the most advanced weapons systems cannot ensure long-term military superiority.
While the change affects production lines, creating space for innovation is even more important. “If allies manufacture U.S.-origin weapons directly in their own countries, they can also adapt them to their own needs,” explained Brian Schimpf. This model aligns with current battlefield trends, where new technologies are adapted through short development cycles and freely available components, software, and autonomous systems are becoming increasingly important. However, current ITAR regulations still subject many of these projects to a regime established during the Cold War, which, according to manufacturers, prolongs approval processes and complicates joint development with allies.
Nevertheless, Anduril is not seeking to eliminate export controls. Schimpf emphasizes that state-of-the-art systems, such as the F-35 fighter jets, will continue to be subject to the traditional licensing regime. However, he argues that modern warfare requires a different approach to technologies originating in the civilian sector and to systems intended for mass production. “It is unclear whether the goals of technology protection are currently set correctly,” he stated, adding that at the political level, he perceives openness on the part of President Donald Trump’s administration to seek a new model for export controls. The debate is thus focusing less and less on the question of whether to protect sensitive technologies and increasingly on how to reconcile this protection with the need to develop defense cooperation more rapidly between the United States and its closest allies.
Schimpf’s proposals also reflect a broader transformation of Anduril itself. The company, which made its name primarily through the production of autonomous systems and surveillance technologies, is no longer focused solely on developing new weapons. It is also building manufacturing capabilities suited to the demands of modern conflicts. In the U.S. state of Ohio, it has begun construction of its first plant, Arsenal-1, where it plans to mass-produce unmanned aerial vehicles and other weapons systems. This sends a clear signal: future competition among defense companies is moving out of research laboratories and increasingly into production facilities.
According to Anduril’s CEO, however, simply expanding production within the United States will not be sufficient in the long term. Brian Schimpf acknowledges that the company is considering manufacturing directly in Europe, including the construction of a large-capacity Arsenal-2 plant. In his view, the continent possesses significant manufacturing potential that can be harnessed for the production of modern defense technologies. “From the very beginning, we designed our systems so that their production could be localized,” he explains. Thanks to this, the company can relatively easily integrate local supply chains and adapt production to the conditions of individual countries.
This approach is already being reflected in specific projects. Last year, Anduril entered into a partnership with the German company Rheinmetall, aimed at developing and manufacturing European versions of the Barracuda guided missile and the Fury autonomous aircraft. “Work is still ongoing,” confirms Brian Schimpf. This is precisely where the debate over ITAR reform takes on a concrete dimension. According to Anduril, if such projects are to emerge in greater numbers, they will require more flexible rules for sharing technology, technical data, and manufacturing documentation. Export controls thus cease to be merely a regulatory issue and instead become one of the factors that can determine the pace of building a transatlantic defense industrial base.
Meanwhile, a diplomatic and economic rivalry is unfolding among European countries over where Anduril will ultimately build its planned massive Arsenal-2 plant. Central Europe, including the Czech Republic, can draw on a strong industrial tradition and world-class infrastructure for software development and the integration of civilian technologies – which form the very core of Anduril’s products – in this tug-of-war. The American startup’s motivation to expand into Europe is driven by a massive influx of capital. In May 2026, the company raised an additional $5 billion from investors, nearly doubling its valuation to $61 billion, and it expects revenues to exceed $4.3 billion in 2026. Despite the fact that the company remains unprofitable and its CEO has ruled out an IPO this year, its massive financial cushion allows it to build factories where it can achieve the best synergies with the local supply chain.
A recommendation from the Defense Innovation Board, an advisory body to the U.S. Department of Defense, also points toward relaxing U.S. export regulations. Its analysis highlights the need for closer industrial cooperation between the United States and its close partners. Administrative barriers that slow down technology sharing or joint development reduce the pace at which innovations are incorporated into military equipment and complicate the establishment of sufficient production capacity. The study therefore recommends simplifying licensing processes, expanding opportunities for joint development, and strengthening industrial integration among alliance members.
The AUKUS trilateral military pact already partially reflects this approach. The United States has expanded licensing exemptions for Australia and the United Kingdom to facilitate the sharing of defense technologies, technical data, and manufacturing processes. At the same time, it has retained strict control over the most advanced technologies through the Excluded Technology List. This model suggests the direction in which U.S. export policy may evolve. Instead of a uniform regime for all foreign partners, Washington is beginning to distinguish more consistently between strategic allies and other friendly nations that share only some of the United States’ security interests.
For European countries, including the Czech Republic, a potential relaxation of ITAR rules represents a unique opportunity. If Washington were to adopt a more flexible licensing approach for U.S. defense technologies, it would open the door for deeper involvement of domestic companies in global supply chains while significantly reducing the administrative burden.
For Central Europe and the Czech Republic, a key advantage within this emerging alliance architecture remains the ability to offer an effective infrastructure for cutting-edge software development, data analytics, and the integration of civilian technologies. These capabilities today form the very core of modern weapons systems, which rely on artificial intelligence and autonomous control more than on traditional heavy engineering. This opens up an opportunity for the domestic defense industry to participate in high-value-added production chains. The potential success of the ITAR export control reform therefore has the potential to fundamentally reshape the transatlantic alliance. It could definitively transform Europe from a mere passive purchaser of finished American technology into a full-fledged, flexible manufacturing partner. In an era of escalating global threats, such a shift would mean a radical increase in overall industrial capacity as well as a tangible strengthening of the operational capabilities and deterrent power of the entire Western alliance.
