US President Donald Trump wants to lift US defence spending to $2.6 trillion. Photo / Getty Images
US President Donald Trump wants to lift US defence spending to $2.6 trillion. Photo / Getty Images
US President Donald Trump has said he wanted to increase the US defence budget by half next year to a giant US$1.5 trillion ($2.5 trillion) to deal with “troubled and dangerous times”.
Trump has frequently employed the US military – which is currently funded at record spending levels – sincereturning to office, including strikes on Yemeni rebels, Iranian nuclear sites and alleged drug-smuggling boats, as well as a brazen special forces raid to seize Venezuelan leader Nicolas Maduro.
“I have determined that, for the Good of our Country, especially in these very troubled and dangerous times, our Military Budget for the year 2027 should not be $1 Trillion Dollars, but rather $1.5 Trillion Dollars,” Trump said on Truth Social.
“This will allow us to build the ‘Dream Military’ that we have long been entitled to and, more importantly, that will keep us SAFE and SECURE, regardless of foe,” the President said.
Trump said the increase is possible because of revenue from the sweeping tariffs he has imposed on friend and foe alike.
The United States is already by far the world’s biggest military spender, and an increase to US$1.5 trillion would push Washington’s financial outlay on its armed forces even further ahead of its rivals China and Russia, though it could also spark an arms race with such countries.
Donald Trump's proposed military budget would push US spending far ahead of China and Russia. Photo / Getty Images
Trump slams defence companies
Trump’s announcement on boosting the US military budget comes after Nato allies committed last year to increase their defence spending to 5% of GDP by 2035 in response to pressure from the US President.
Even as he announced a budget goal that would be a major boon to defence contractors, Trump took aim at them in posts on Truth Social.
Defence contractors are “issuing massive Dividends to their Shareholders and massive Stock Buybacks, at the expense and detriment of investing in Plants and Equipment” while pay packages for defence executives are “exorbitant and unjustifiable”, Trump said.
The President said salaries should be capped at US$5 million and that he would prohibit stock buybacks and dividends “until such time as these problems are rectified”, without specifying how he would do so.
The announcement took the markets by surprise, sending US companies in the defence sector – such as Lockheed Martin and General Dynamics – more than 4% lower. Northrop Grumman lost more than 5%.
Trump took aim at Raytheon specifically, saying the Defence Department told him the company was the “least responsive” to its needs and the “slowest in increasing their volume”.
Raytheon must boost its investments in plants and equipment, Trump said, threatening it with a loss of US government business if it does not comply.
