Trump orders review to strengthen U.S. defence industry

By Mike Stone and Ayesha Rascoe

WASHINGTON (Reuters) - President Donald Trump signed an executive order on Friday initiating a government-wide review of the U.S. defence industry and suggest changes to strengthen it.

The review is intended to identify and address potential weak points in the defence manufacturing base including companies that could go out of business and leave gaps in the supply chain for U.S. weapons systems, said Peter Navarro, the White House National Trade Council director.

The executive order asked for recommendations on possible legislative, regulatory and policy changes that would improve and support the defence industry, calling it a "significant national priority".

"America's defence industrial base is now facing increasing gaps in its capabilities," Navarro said. "There's just one company in the U.S. that can repair propellers for Navy submarines," he added in a briefing with reporters.

Defence analyst Howard Rubel of the investment bank Jefferies & Co said the free market has so far done a reasonably good job. "We don't want to invest in buggy whip suppliers just because there is only one (supplier)." He added that it is important to recognise that the United States can sometimes buy more cheaply from its allies.

The review mandated by the executive order will be led by the Pentagon and conducted in concert with the Department of Labor and the Department of Homeland Security as well as other government agencies.

Skilled labour is also a big part of the huge military buildup Trump has promised to project American power. Industry has already shown initiative in addressing the skilled labour shortage, including in the metals trades, Navarro said in his remarks.

(Reporting by Mike Stone and Ayesha Rascoe in Washington; Editing by Chris Sanders and James Dalgleish)