Donald Trump calls for 50% increase in US defence spending by 2027

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Donald Trump is set to ask US lawmakers to allocate $1.5 trillion for defense spending, an increase of more than 50 percent from this year’s record budget of $901 billion.

The president said Wednesday in a social media post that the significant increase will enable the United States to build a “dream army” and will be funded through tariffs.

“I have decided that for the good of our country, especially in these very turbulent and dangerous times, our 2027 military budget should not be $1 trillion, but $1.5 trillion,” Trump wrote.

He added: “Because of the tariffs and the enormous income they bring, we are easily able to reach the $1.5 trillion figure.”

The proposed massive increase in defense spending comes as Trump increasingly uses the military to achieve his foreign policy goals during his second term.

US forces on Wednesday seized a Russian oil tanker in the Atlantic Ocean over alleged sanctions violations, days after a large-scale operation to capture powerful Venezuelan President Nicolas Maduro.

On Tuesday, the White House intensified its rhetoric on taking control of Greenland, saying that “using the US military” was among the options the president was considering.

Trump also said Wednesday that he “will not allow” US defense companies to issue stock buybacks or pay dividends until they heed his call to produce military equipment faster and more reliably.

He singled out contractor Raytheon, saying: “Either Raytheon will step up and start making more upfront investments such as plants and equipment, or it will no longer deal with the War Department.”

Trump later issued an executive order directing the Department of Defense to add provisions to contracts with military suppliers prohibiting them from tying “executive incentive compensation” to “short-term financial metrics.”

The order also called for provisions preventing stock buybacks and dividends “during a period of poor performance… inadequate investment, or inadequate speed of production,” as defined by Defense Secretary Pete Hegseth.

Trump said the $1.5 trillion budget figure was reached after negotiations with lawmakers and other political representatives.

A 50 percent increase in defense spending is likely to raise concerns about the sustainability of the government’s finances.

The Congressional Budget Office, congress’s fiscal watchdog, estimates the budget deficit will be 5.5 percent this year — a level lower than in recent years, but which many economists believe is unsustainable.

While Trump’s tariffs helped reduce the deficit in 2025, the Congressional Budget Office projected in November that they would raise only $2.5 trillion over 11 years — about $230 billion annually — far less than the expected $500 billion increase in defense spending.

The president claimed that trade tariff revenues covered the increase and enabled the United States to reduce the national debt and pay “large dividends” to middle-income Americans.

Additional reporting by Christian Davies