Trump announces end to $4B annual aid to Israel in 2027

President Donald Trump announced on Tuesday that the United States will stop providing $4 billion in annual aid to Israel starting in 2027. The decision comes as the two nations transition toward a model based on direct arms sales rather than direct funding. Trump made the announcement during a phone interview with Fox News Channel on Election Day for the midterms.

The president stated that Israeli Prime Minister Benjamin Netanyahu first raised the idea with him. Trump said the two leaders had discussed the shift for approximately two years. He characterized the new arrangement as a form of barter, noting that the United States would continue to sell weapons to its closest ally in the Middle East.

Trump argued that the financial outlay was too high for the American public. He also pointed to domestic political dynamics, saying the aid had become a frequent topic for Democratic candidates. He specifically named Abdul El-Sayed, a U.S. Senate candidate from Michigan, as a vocal critic who uses the funding as a talking point. Trump added that even conservative commentators, including Tucker Carlson, have recently questioned the value of the relationship.

“You can consider it barter. You can consider military aid or cash,” Trump said. “Look, we give them $4 billion of things and money, and they don’t need it. And I was approached by Bibi Netanyahu, and we’ve been talking about it for a couple of years because it’s a lot of money.”

Netanyahu and his office had not issued a formal comment as of Tuesday evening in Israel. The prime minister posted twice on social media during the day, but both posts focused on allegations of foreign interference in Israeli elections rather than the U.S. aid change. Several Israeli opposition leaders reacted with criticism. Gadi Eisenkot, a former military chief and Netanyahu’s chief rival, said the fact that the defense establishment learned of the shift through the media showed the danger of the prime minister’s conduct.

Yair Golan, a leader in Israel’s opposition bloc, warned that ending U.S. military aid would deal a severe blow to Israel’s security. Golan, a former deputy military chief, stated in a written statement that the burden of funding defense needs would fall entirely on the Israeli public at a time when the country is fighting on multiple fronts.

The current aid structure stems from a security agreement signed by President Barack Obama in 2016. That deal provided Israel with $38 billion over 10 years, or $3.8 billion annually. The agreement required Israel to spend the funds on U.S. military industries. Netanyahu has previously expressed a desire to taper off this aid, telling The Economist in January that such a change was in the works for the next decade.

Experts note that an abrupt halt to the aid by the end of 2026 is unlikely. Congress will play a major role in the final outcome, and the current memorandum of understanding does not expire until 2028. David Schenker, who served as Trump’s top Middle East diplomat in his first term, said the timing raises questions about whether the announcement was a political maneuver to sway midterm votes. Schenker, now with the Washington Institute for Near East Policy, said the move likely will not change votes among either Republican or Democratic partisans.

Behind the scenes, officials have discussed restructuring the relationship into a partnership focused on defense technology and weapons manufacturing. The 2027 National Defense Authorization Act includes a provision to expand U.S. and Israeli cooperation on new defense technology. The bill has not yet been approved by Congress. Rep. Ro Khanna, a California Democrat on the House Armed Services Committee, criticized the provision, arguing that such integration would lead to a loss of U.S. sovereignty.

The shift affects how U.S. defense contractors receive payment. Currently, much of the aid is foreign military financing, which requires Israel to spend the money on American-made weaponry. This structure returns funds to the U.S. economy. If Israel stops buying American materiel at the same rate, contractors may see a financial impact. Schenker noted that the real question is whether weapons deliveries will be affected and whether Israel will remain a priority for the U.S. defense industry.