Naval Arms Exports - How Europe & Asia overtook the US & Russia

With the next update on the Ukraine war delayed on account of the the Kharkiv counter-offensive, I thought it would be good to return to some defence economics with a study of global military ship and submarine exports.

When we think of major naval powers, we usually think of the big players. The USA, the USSR/Russia & the PRC - but surprisingly enough, in recent times all of them have sold relatively few of their ships and submarines abroad.

How can it be that major naval powers, with significant military shipbuilding capacity, find themselves in this position? Well thanks to the results of the recent topic votes here and on my Patreon, you get to spend the next 56 minutes finding out.

Maximum possible credit to the Stockholm International Peace Research Institute for making their data freely and publicly available in easy to manipulate formats - it makes covering topics like these much, much easier by providing good, open-source data.

Next week we'll return to Ukraine, but for now, enjoy another dive into defence economics and the arms market.

Caveats:
As always - this video includes only my own personal opinions and does not represent financial advice.

SIPRI data is used as the basis for identifying trends in arms exports, and specific trade register data is also used. As discussed, tracking arms sales, and valuing them all in terms of Trend Indicator Value (TIV) to allow more like-for-like comparisons is difficult. SIPRI data may not be complete (not capturing all transactions) and valuations and national attributions may be made more complicated or difficult based on the structure of a particular deal. As such, it should be treated as informative, but not unambiguously authoritative.

Sources:
Primary data analysis based on Stockholm International Peace Research Institute Export TIV Registers:

US fleet figures sourced from Navy History and Heritage Command:

Commentary on US shipyard capacity

Patreon:

Timestamps:
00:00 -- Opening Words
02:28 -- What Am I Covering?
04:09 -- Congratulations Mr. President!
05:24 -- Military Ship/Submarine Exports
06:15 -- What is a Competitive Advantage?
08:10 -- The Competitors
08:16 -- The Soviet Union
10:45 -- Meet Sergey
11:33 -- Ship & Submarine Arms Exports - USSR & USA 1970-89
12:10 -- Collapse of the USSR
13:27 -- Renaissance
14:33 -- The Golden Years
15:24 -- Re-collapse & Modern Offering
16:37 -- What do the Russians offer?
18:16 -- What about the Americans?
20:15 -- Market Decline?
20:38 -- Product Problem
23:30 -- The Shipbuilding Challenge
26:31 -- Détente, Not Decay
28:21 -- Second-Hand Dealer
30:53 -- What do the Americans offer?
31:58 -- Made in Europe?
33:24 -- The EU 5
34:54 -- Germany
36:30 -- France
39:36 -- Spain
40:14 -- Italy
41:55 -- The Netherlands
43:25 -- Integrated Offerings
45:09 -- What do the Europeans offer?
46:47 -- Let's Travel to Asia
46:55 -- Korea's Rise
48:01 -- Naval Tradition in Korea
49:26 -- Meet the Big 3
50:54 -- Growing Export Provider
52:54 -- Conclusions
54:42 -- Channel Update

[PerunAU]

There's one notable correction in this video (which is just a case of me misspeaking).

At one point I say the PLAN is bigger than the USN in both hull count and tonnage. It isn't, it's smaller by tonnage (significantly) and is only larger by hull count. My brain wanted to say it was larger by hull count and was building more tonange but I flubbed the sentence and missed it in editing.

The perils of doing these things without a script... Apologies for any confusion.

[TACTICALPEPE]

Ah yes, my weekly dose of 1 hour slide presentations on youtube

[evilmountain]

I find it equally ironic, hilarious, and impressive that you have essentially shifted a *YouTube channel* from civilian production (video games) to wartime industry....

[DDR]

Perun is so polite and apologizes so often for non-issues that he’s going to be given honorary Canadian citizenship.

[janeharrison]

No need to apologies for delaying the Ukraine update - no-one expected the excellent developments of the last few days! Hopefully the Ukrainians can consolidate and strengthen their gains, and maybe repeat the process in Kherson :)

[arseneken]

A fun idea for a future video: “Elbonian military procurement - horrible purchasing decisions do’s and don’ts”

[prxZen]

"Imagine the fun passengers could have if one of the activities is _you throw target bouys over the side _*_and occationally passengers for a little bit of extra_* could take turns trying to pop the targets with the 76-mil."

Remember back in school, when your teacher told you that punctuation is really important? - This is why 😅

[GG-yrix]

There are strategic terms that come into play here also. US Navy is a Blue Water navy, and it's ship building concentration is on Large Combatant and Logistics shipping (Destroyers and Larger class ships, plus Nuclear power). Most Navies are Green Water (Sticking closer to shore). Smaller navies do not need Nuclear Powered subs, Carriers, etc. Germany and Italy really are good at making Corvette and Frigate type shipping, and conventional powered subs.

[Wildcat]

You have quickly become one of my favorite youtubers.

I started watching when you made the first Ukrainian video and have stayed with you through it all.

Incredibly great content! I absolutely love it all!

[markwarburton]

"It's fragrantly illegal, but I stand by the concept!" 🤣😂

[armandosreis]

Hi Perun. I just wanted to thank you for these videos. I know close to nothing of the topics you cover, so I can only imagine the amount of work you put in researching, compiling and comparing all these values. Every video of yours that I watch is filled with quality data, unlike many others out there. Thank you for your efforts. We appreciate them.

[c_lakindick]

I’ve got my break at work and watching a lecture on the naval export market is all I need in my life

[aikurin]

I think you're missing a trick, Japan is the ONLY nation that can produce a destroyer capable of operating F-35s, I mean, that's got to be a unique selling point 😇

[behaviorshelf]

The feeling one gets here when our host says "that will be in another video" is quite remarkable. Thank you for yet another great learning opportunity.

[hwktr]

Excellent work. Highights include: the bit when line was going up, then went down again, casinos and pools on warships, 76mm guns on cruise ships, clarifying the location of the ROK.

[JulianSildenLanglo]

I wonder what the export graph would look like if the EU countries were considered a single unit. I.e. Not counting a sale from France to Spain as export.

[quietlistener]

Came for ships, got a Tropico tutorial. Not disappointed in any way! Great video and very insightful, El Presidente congratulates you!

[andreas]

42:00 "is that flagrantly illegal? Yes, but I stant by the concept." lmao

[cronochaos]

I'm a South Korean but the future of our ship building industry doesn't seem that promising. After about decade long recession because you can't get as cost competitive as China they let go a lot of welders and they felt betrayed and found work somewhere else. Now orders are coming back in that gives the industry hope but no one is willing to return to the dockyards because past feelings and the pay is meager compared to the intensity and danger involved. And can't say a lot of people are willing to start working there when entrance level pay will be similar working at convenience store but with bigger chances of injury and death. The manpower shortage had the government recently loosen restriction for foreign works for the shipbuilding industry that isn't a fundamental solution .

[haisheauspforte]

As a guy from Kiel, Germany, the place where all the German submarines are built, I found that video really interesting! Made me a bit proud of my indepted home city :) Ship building is still on decline though because of several businesses in the commercial ship building sector going bankrupt in 2008 and ThyssenKrupp selling off their commercial capacities