Thu, 08 Jan 2026

Thu, 08 Jan 2026 Trump calls for US military spending to rise more than 50% to $1.5tn

The president also called on defence firms to increase production or face a crackdown on payouts.
US President Donald Trump has called for a significant increase in defense spending, aiming for $1.5tn by 2027, a rise of over 50% from this year's budget. This move comes as tensions escalate globally, with Trump citing "these very troubled and dangerous times" as justification. To achieve the increased spending, Trump plans to crack down on defense contractors who fail to deliver equipment and build new manufacturing plants quickly enough. He also intends to reduce payouts to bosses and shareholders unless they speed up production. Shares in major US defense companies rose by over 5% after Trump's announcement, while economists have warned about the unsustainable gap between US spending and income. To fund the increased budget, Trump relies on tariffs bringing in revenue. The President has been pushing for higher defense spending since his first term, arguing that military equipment is not being produced quickly enough. Trump criticized the "exorbitant" pay packages of executives at arms manufacturers, suggesting no executive should earn over $5 million per year. He also singled out Raytheon as the "least responsive" to America's defense needs and slowest to increase production, threatening to end business with them unless they invest more in plants and equipment. The call for increased defense spending comes amidst rising geo-political tensions worldwide, including US military actions against Russian and Venezuelan targets.
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