The US will increase its defence budget by $100 billion: for the first time in history, the amount will reach $1 trillion
Donald Trump has announced the White House administration's intention to include a record amount of about $1 trillion in the next US defence budget. He made this statement during a meeting with Israeli Prime Minister Benjamin Netanyahu.
Here's What We Know
We are talking about the draft defence budget for the 2026 fiscal year, which will begin in October 2025. So far, this is only a White House initiative - the final decision must be made by Congress. However, given that Republicans currently control both houses of parliament, the chances of approval are high.
The announced spending means an increase in the defence budget by about $100 billion - this year's spending is $876 billion, while the draft budget for 2025 was $850 billion.
US defence budgets. Illustration: US DoD Fiscal Year 2025
At the same time, Trump's announcement is in stark contrast to his previous intentions to cut defence spending by $50 billion. Those plans have already begun to be implemented, with personnel cuts and reassessment of certain weapons programmes with possible cancellation.
Even with the increase to $1 trillion, US defence spending will still amount to about 3% of GDP. This is less than Trump's own requirement for NATO countries to spend at least 5% of GDP on defence. For comparison, during the wars in Iraq and Afghanistan, this figure reached 4.5%, and during the Cold War, spending ranged from 4.5% to a record 11.4% during the Korean War.
The situation is further complicated by the fact that the US currently has no approved budget and continues to work on last year's spending items.
Source: Bloomberg
