Firearm Stocks Gain on Trump Reversal of Export Restrictions
Policy change rolls back Biden-era controls, expected to unlock hundreds of millions in annual revenue for U.S. gunmakers.
The U.S. firearms and ammunition sector received a significant boost after the Trump administration announced it was implemented by the Biden administration. The policy shift is expected to unleash what industry experts predict could be 'hundreds of millions of dollars' in annual revenue for American manufacturers like Sturm Ruger & Co (RGR) and Smith & Wesson Brands (SWBI).
The move scraps a set of controls put in place in April 2024, which included a 'presumption of denial' for export licenses to 36 countries deemed high-risk for illicit weapon diversion. Those rules, which also shortened the validity of export licenses from four years to one, were in lost business, according to the National Shooting Sports Foundation (NSSF).
The reversal, enacted by the Department of Commerce, aims to restore American competitiveness in the global market. Key among the changes is the move back to a four-year validity period for export licenses, providing greater certainty and stability for manufacturers. The NSSF hailed the decision as a critical step that allows U.S. companies to regain access to foreign markets while maintaining robust controls to prevent illegal trafficking. This decision effectively ends the case-by-case license review process that prioritized human rights concerns, a policy that gun control advocates had supported but the industry argued was overly restrictive and damaging to business.
Investors reacted positively to the news, with stocks across the sector showing elevated trading volume. The policy change is seen as a major tailwind for an industry that has faced significant regulatory headwinds in recent years, potentially reshaping the competitive landscape for firearm exports and providing a substantial revenue channel for domestic producers.