Citing “troubled and dangerous times,” the US President Donald Trump today proposed a massive increase in defence sector spending in 2027, taking the annual budget to $1.5 trillion. For the year 2026, the approved military budget stands at $901 billion.
The announcement comes just days after the United States carried out a military operation in Venezuela to capture Nicolás Maduro on drug trafficking charges.
Trump says the hike in military spending feels comfortable as the country is generating higher revenue through raised tariffs on other countries worldwide.
According to the data from the Bipartisan Policy Centre, the United States’ gross revenue from tariffs and other excise taxes stood at $288.5 billion for 2025. This marked a major surge from the total revenue of $98.3 billion in 2024.
Defence contractors on radar
Meanwhile, Trump isn’t putting an end to issuing threats and warnings. In the most recent social media post, Trump warned defence contractors of the United States against the disproportionate dividends, huge stock buybacks, and extravagant executive compensation.
“Defence contractors are currently issuing massive dividends to their shareholders and massive stock buybacks, at the expense and detriment of investing in plants and equipment. This situation will no longer be allowed or tolerated! Also, executive pay packages in the defence industry are exorbitant and unjustifiable, given how slowly these companies are delivering vital equipment to our military and our allies. Salaries, stock options, and every other form of Compensation are far too high for these executives,” said Trump.
Moreover, he has threatened to suspend deals with Raytheon, one of the biggest U.S. defence contractors. He stated that the company must end the practice of stock buybacks and make greater investments in increasing the output volume of weapons production.
“Either Raytheon steps up and starts investing in more upfront investments like plants and equipment, or they will no longer be doing business with the Department of War,” Trump said on social media.
“Also, if Raytheon wants further business with the United States Government, under no circumstances will they be allowed to do any additional Stock Buybacks, where they have spent tens of billions of dollars, until they can get their act together.”
Earlier, Trump had issued an executive order to initiate an assessment of defence contractors, listing out those who failed to meet the terms and conditions of contracts.