U.S. Defense: Is Trump’s Golden Dome the ’perfect system’?

Investing.com -- President Donald Trump’s “Golden Dome” missile defense plan, unveiled May 21, promises near-total protection for the United States from a wide range of airborne threats. 

The $175 billion initiative, intended to span three years, aims to defend against ICBMs, cruise missiles, hypersonic weapons and drones.

Trump also said Canada has expressed interest in joining. The proposal builds on his earlier “Iron Dome for America” concept announced in January.

Bernstein analysts said the program resembles past efforts like Reagan’s Strategic Defense Initiative, which failed due to insurmountable technical hurdles, and the Missile Defense Agency’s layered architecture from the 2000s. 

Existing U.S. systems such as THAAD, Patriot, GMD and SM-3 are expected to form the early backbone of Golden Dome. 

However, Bernstein noted that efforts to intercept missiles in the boost phase, the most desirable but technically difficult layer, have repeatedly failed.

The initiative begins with $25 billion from the pending Senate reconciliation bill. However, the Congressional Budget Office estimates the full cost could exceed $500 billion. 

Bernstein analysts see “little fidelity” in these estimates but believe the initial $175 billion will be spent across traditional and non-traditional contractors, including firms like SpaceX and Anduril. A planned kickoff conference in Huntsville, Alabama, was canceled with no new date.

General Michael Gutlein, former Vice Chief of Space Operations, will lead the program. 

Defense industry CEOs expressed confidence in Gutlein at Bernstein’s Strategic Decisions Conference but highlighted the absence of a clear acquisition or integration strategy. Past large defense programs such as FCS, Deepwater and JTRS failed under similar structural ambiguities.

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Bernstein stressed the mismatch between the ambitions of policymakers and the capabilities of engineers. 

“Technology has advanced,” the brokerage said, “but so has the complexity of the threat.”

Defending all 346 U.S. cities with over 100,000 people using terminal interceptors would cost far more than the CBO projection. 

For comparison, the U.S. Missile Defense Agency is spending $8 billion to defend Guam, an island smaller than Kansas City.

Space-based interceptors, central to Trump’s vision, remain a technical and financial challenge. 

While tracking systems like HBTSS and Next Gen OPIR are in development, deploying interceptors in orbit would require hundreds of satellites to address even a single launch scenario, especially from submarine-based threats. Bernstein warned this portion of the program could become prohibitively expensive.

Analysts also questioned the premise of missile defense as a deterrent. Offensive systems, including Columbia Class submarines, the B-21 bomber and the Sentinel ICBM, remain more effective and cost-efficient. 

Defense is more expensive than offense, especially against adversaries that can adapt quickly and more cheaply.

While success is uncertain, Bernstein expects substantial industry participation. Lockheed Martin (NYSE:LMT), RTX, Northrop Grumman (NYSE:NOC), L3Harris, Boeing (NYSE:BA) and BAE Systems (LON:BAES) are among the likely beneficiaries. 

Even if the full system never materializes, analysts expect portions to advance and spending to rise beyond initial projections.

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