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Friday, October 30, 2020

US formalizes F-16 jet sale to Taiwan with China tensions high

Taiwan’s purchase of the F-16s marks the first sale of advanced fighter jets to the island since President George H.W. Bush announced approval for 150 F-16s in 1992.

By: Bloomberg | Updated: August 16, 2020 10:53:57 am
US China tensions, US China war, US China trade war, F-16 jets, US F-16 jets, World news, Indian ExpressTaiwan has complained of repeated incidents of Chinese aircraft near the island this year, and has regularly had to scramble its F-16s and other jets to intercept them. (REUTERS/Tyrone Siu/Representational)

Taiwan formally signed an agreement to buy 66 of the latest model F-16 jets built by Lockheed Martin Corp., a move likely to further inflame tensions between the U.S. and China.

Taiwan’s purchase of the F-16s marks the first sale of advanced fighter jets to the island since President George H.W. Bush announced approval for 150 F-16s in 1992. A $62 billion figure announced by the Pentagon on Friday is the upper limit of numerous contracts if all potential foreign customers placed their maximum desired number over the decade.

The move is likely to be denounced by Beijing, even though the U.S. first signaled its plans to approve the sale a year ago in an informal notification to Congress and it could still be years before the jets are delivered.

The announcement said that work on the 90 jets potentially to be sold under Friday’s announcement would be complete by late 2026.

Company officials have previously said they project a market for as many as 400 of the new F-16s.

When the planned sale was announced in August last year, a spokeswoman for China’s Foreign Ministry told reporters that “U.S. arms sales to Taiwan severely violate the one-China principle.”

The spokeswoman, Hua Chunying, said at the time that her government was urging the U.S. to “refrain” from selling the “fighter jets to Taiwan and stop arms sales to, and military contact with, Taiwan. Otherwise, the Chinese side will surely make strong reactions, and the U.S. will have to bear all the consequences.”

Since then, ties with the U.S. have only frayed further, with the two nations in a series of disputes ranging from the origins of the Covid-19 pandemic to 5G technology and Beijing’s tightening grip over Hong Kong. The Trump administration last month rejected China’s expansive maritime claims in the South China Sea, reversing a previous policy of not taking sides in such disputes. The U.S. Navy sent an aircraft carrier strike group to the South China Sea on Friday to conduct maritime air defense operations.

In addition to Taiwan, Morocco is buying 24 F-16s jets in the first tranche of 90 aircraft that the Pentagon said was valued at $4.9 billion. The Pentagon announcement didn’t name Taiwan or Morocco, but they have been identified in a previous statement and were confirmed Friday by a person familiar with the contract.

The new F-16s are being assembled at Lockheed’s new facility in Greenville, South Carolina, which opened in April 2019. The contracting mechanism used by the Pentagon “will facilitate faster contract awards and greater pricing clarity for our foreign military partners,” Brian Brackens, an Air Force spokesman, said in a statement to Bloomberg News before the contract announcement.

“Taiwan and Morocco are expected to be the first two partner nations that will utilize this contract,” Brackens said.

The Taiwan F-16s will be equipped with a top-line fire control radar made by Northrop Grumman Corp. Called the APG-83, it would allow precision-guided munitions to be fired at greater distances, said an official familiar with the details.

Lockheed Chief Financial Officer Kenneth Possenriede told analysts on a July 21 earnings call that the company was anticipating a “quite large” F-16 order “that should get announced sometime this quarter” in which “the marquee customer is Taiwan.”

The additional 90 F-16s would add to Lockheed’s current 38-aircraft backlog.

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