Kremlin spokesman Dmitry Peskov arrives for the meeting with officials of Rostec high-technology state corporation at the Novo-Ogaryovo state residence outside Moscow, Russia December 7, 2017. REUTERS/Sergei Karpukhin

MOSCOW (Reuters) - The Kremlin said on Wednesday that “everything is fine” in the Russian defense sector, responding to an assertion by the U.S. State Department that sanctions had cost Russia $3 billion in lost defense contracts.

“I can just say that everything is fine, everything is fine,” Kremlin spokesman Dmitry Peskov said in a phone call with reporters on Wednesday.

Peskov said Russia was “trying to hedge risks related to instances of unfair competition on the part of the United States in the market of military-technical cooperation.”