Trump Calls For Over 50% Increase To US Military Budget
President Donald Trump has called for a huge increase in US defence spending, saying the military budget should rise to $1.5tn (£1.1tn) in 2027 as global tensions grow. The proposal would mark a jump of more than 50% from this year’s already record $901bn budget.
Posting on social media, Trump said the boost was needed for “these very troubled and dangerous times” and would help create what he described as a “Dream Military”. “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,” he wrote.
The comments immediately rippled through financial markets. Shares in major US defence firms including Lockheed Martin, Northrop Grumman and Raytheon climbed more than 5% in after-hours and premarket trading. European arms makers also surged, with stocks in the sector hitting fresh record highs. Britain’s BAE Systems jumped around 6%, while Germany’s Rheinmetall and Italy’s Leonardo also made strong gains. A basket of European defence stocks tracked by Goldman Sachs rose nearly 4% on Thursday and is up roughly 13% for the week.
Trump argued the US could “easily hit” the $1.5tn target thanks to revenue from tariffs, brushing aside warnings from economists that federal spending is already outpacing income at an unsustainable rate.
Alongside the spending push, the president took aim at the defence industry itself. He accused arms manufacturers of prioritising shareholder payouts and executive pay over building weapons quickly enough, saying production delays were hurting US security. “No Executive should be allowed to make in excess of $5 Million Dollars which, as high as it sounds, is a mere fraction of what they are making now,” he wrote.
Trump also threatened consequences for companies that fail to expand manufacturing capacity, urging them to build new and modern plants. In one post, he singled out Raytheon as the “least responsive” to US defence needs, warning: “Either Raytheon steps up and starts investing in more upfront Investment like Plants and Equipment, or they will no longer be doing business with the Department of War.”
The president’s renewed focus on defence comes amid a flurry of international flashpoints. This week, US forces captured a Russian-flagged oil tanker suspected of breaking sanctions, days after Venezuelan leader Nicolás Maduro was seized and taken to the US to face drug trafficking charges. Meanwhile, China recently carried out military drills around Taiwan, and Beijing has reacted angrily to Taiwan’s plans to ramp up its own defence spending.
With geopolitics driving policy and markets alike, investors appear to be betting that higher military budgets — in the US and beyond — are here to stay.
