President Donald Trump has called for a significant increase in U.S. defense spending, proposing a $1.5 trillion budget for 2027 amid what he described as “very troubled and dangerous times.” The proposed budget is more than 50% higher than the $901 billion approved by Congress in December of this year.
Trump Proposes Increased Defense Spending
Trump stated the increased spending would allow the U.S. to build a “Dream Military” and ensure national safety and security. He made the announcement on social media Wednesday.
Alongside the call for increased funding, Trump indicated he would scrutinize payouts to executives and shareholders of major U.S. defense contractors, demanding faster deliveries of armaments and the construction of new manufacturing facilities.
Shares in Lockheed Martin, Northrop Grumman, and Raytheon experienced gains of over 5% in extended trading following Trump’s announcements.
Economists have previously cautioned that the disparity between U.S. spending and income has reached unsustainable levels. However, Trump asserted that Washington can “easily hit” the proposed $1.5 trillion defense budget, citing revenue generated from tariffs.
Criticism of Defense Contractors
Trump has consistently advocated for higher defense spending by the U.S. and its allies, dating back to his first term in office. He criticized the pace of military equipment production, urging companies to invest in new and modern plants.
He accused defense companies of prioritizing shareholder payouts and stock buybacks over investments in production, and labeled executive compensation packages as “exorbitant.” Trump suggested limiting executive pay to a maximum of $5 million.
In a specific post, Trump singled out Raytheon as the “least responsive” to America’s defense needs and the slowest to increase production. He warned that Raytheon could lose future business with the Department of Defense if it does not increase investment in plants and equipment.
The BBC has reached out to Raytheon for comment.
Trump’s call for increased defense spending comes as geopolitical tensions rise globally. Recent events include the U.S. military capturing a Russian-flagged oil tanker suspected of violating U.S. sanctions, the seizure of Venezuelan leader Nicolás Maduro and his transport to the U.S. to face drug trafficking charges, and military drills conducted by China around Taiwan simulating a potential blockade of the island.
Taiwan’s efforts to bolster its defense capabilities have also drawn criticism from Beijing, which claims Taiwan as its territory.
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