The New York Times reported on July 7, 2026, that former President Donald Trump plans to restore Turkey’s full membership in the F-35 Joint Strike Fighter program if elected. The policy shift would reverse a 2019 expulsion triggered by Turkey’s acquisition of the Russian S-400 missile system. Reinstatement would immediately unlock over $1.4 billion in suspended Turkish payments to program prime contractor Lockheed Martin. Turkish aerospace firms would resume manufacturing over 900 specialized parts for the fifth-generation stealth fighter.
Context — [why this matters now]
The F-35 program expulsion on July 17, 2019, created a significant rift within NATO and cost Turkish defense firms an estimated $10 billion in long-term revenue. Turkey had been a Level 3 program partner, investing $1.25 billion in development costs since 2002. The current geopolitical landscape includes heightened tensions with Russia and ongoing conflicts in Ukraine and the Middle East, increasing the strategic value of a fully integrated NATO. The reported policy shift aligns with Trump's stated priorities of strengthening bilateral alliances over multilateral frameworks. This move would materially alter defense contracting flows and diplomatic relationships in a critical election year.
Data — [what the numbers show]
Lockheed Martin's F-35 program represents 27% of its $66.6 billion annual revenue. Turkey’s original procurement plan included 100 F-35A conventional takeoff models at a program cost of $9.2 billion. The United States Air Force unit flyaway cost for the F-35A is $82.5 million in 2026 dollars. Turkish aerospace firms manufactured 937 parts for the global F-35 supply chain, including critical cockpit displays and landing gear components. Before expulsion, Turkish companies stood to gain an estimated $12 billion in industrial participation work over the life of the program. The program currently has over 3,300 aircraft operating across 17 global partners and foreign military sales customers.
| Metric | Pre-2019 Expulsion | Post-Reinstatement |
|---|
| Turkish Industrial Participation | $12B projected | $9.5B projected |
| Lockheed Receivables from Turkey | $1.4B suspended | $1.4B unlocked |
| Turkish Parts Manufacturing | 937 components | 700+ components |
Analysis — [what it means for markets / sectors / tickers]
Defense prime contractors Lockheed Martin (LMT) and Northrop Grumman (NOC) stand as direct beneficiaries through unlocked payments and restored supply chain efficiency. Turkish aerospace firms Turkish Aerospace Industries (TAI) and Tusas Engine Industries (TEI) would experience significant revenue acceleration. The iShares U.S. Aerospace & Defense ETF (ITA) holds 22% weight in LMT and NOC combined. The primary counter-argument involves continued congressional opposition based on the Countering America's Adversaries Through Sanctions Act (CAATSA), which mandates sanctions for significant Russian defense purchases. Institutional flows are likely accumulating out-of-favor Turkish assets and defense primes with high F-35 exposure ahead of potential policy realization.
Outlook — [what to watch next]
The November 5, 2026, U.S. election outcome remains the primary catalyst for this policy shift. Key resistance levels include the Turkish lira's 32.50 level against the U.S. dollar and Lockheed Martin's $525 share price, representing its 2026 high. Watch for the Senate Armed Services Committee markup of the 2027 National Defense Authorization Act, due by September 30, 2026, for any language restricting presidential authority on F-35 reinstatements. The NATO Summit in Washington D.C. on July 9-11, 2026, may provide early signals on alliance positioning regarding Turkish reintegration. A confirmed Trump victory would likely trigger immediate sector rotation into defense and Turkish assets.
Frequently Asked Questions
What does F-35 reinstatement mean for the Turkish lira?
Reinstatement would provide a substantial positive shock to Turkey’s current account balance through defense export revenues and strengthened investor confidence. Aerospace manufacturing is a high-value export sector that generates foreign currency earnings. Analysts at JPMorgan estimate potential lira appreciation of 8-12% against the dollar basket on execution of this policy, reversing part of its 41% decline since the 2019 expulsion. This would also reduce pressure on Turkey’s central bank to maintain its current 45% policy rate.
How does this affect other F-35 partner nations?
Reintegrating Turkey introduces supply chain complexities but strengthens NATO interoperability. Partner nations like Norway and the Netherlands expressed operational concerns about maintaining two separate supply chains. The program office would need to requalify Turkish-manufactured components, a process estimated to take 18-24 months. Geopolitically, it reduces reliance on alternative fighter platforms like the Eurofighter Typhoon and Dassault Rafale that gained consideration during Turkey’s exclusion.
What is the timeline for Turkey receiving operational F-35 jets?
Even with immediate policy reversal, delivery of operational aircraft would likely not begin before 2029. The process requires requalification of Turkish pilots and maintenance crews, reestablishment of secure logistics chains, and congressional notification periods. The first squadron of Turkish F-35s would likely achieve initial operating capability in 2030-2031, assuming no legislative blocks. This timeline contrasts with Turkey’s potential receipt of Russian Su-35 fighters, which could occur within 12 months under existing agreements.
Bottom Line
Trump's planned F-35 policy reversal represents a $10 billion defense market reorientation contingent on election victory.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
