Overview
- The request represents roughly a 50% jump from the $901 billion authorized for 2026, a scale analysts say could push defense outlays above 5% of GDP in peacetime.
- Defense shares rallied on the announcement, with Lockheed Martin up about 5.1%, Northrop Grumman up 3.6%, General Dynamics higher, and the iShares U.S. Aerospace & Defense ETF also gaining.
- Trump says higher tariff revenues would finance the expansion, while independent estimates highlight competing pledges and doubt that receipts can cover the increase.
- The White House signaled tougher contractor oversight, with Trump threatening Raytheon over production pace, floating a $5 million cap on executive pay, and a reported decree directing the Pentagon to review contracts and curb buybacks and dividends during underperformance.
- The proposal comes days after a U.S. operation in Venezuela that reports say led to Nicolás Maduro’s detention, as tensions extend to disputes involving Greenland and sanctions enforcement.