Trump proposes massive increase in 2027 defence spending to US$1.5T, citing ‘dangerous times’

President Donald Trump speaks to House Republican lawmakers during their annual policy retreat, Tuesday, Jan. 6, 2026, in Washington.

WASHINGTON — U.S. President Donald Trump on Wednesday proposed setting U.S. military spending at $1.5 trillion in 2027, citing “troubled and dangerous times.”

Trump called for the massive surge in spending days after he ordered a U.S. military operation to capture Venezuelan leader Nicolas Maduro and spirit him out of the country to face drug trafficking charges in the United States. U.S. forces continue to mass in the Caribbean Sea.

The 2026 military budget is set at $901 billion.

Trump in recent days has also called for taking over the Danish territory of Greenland for national security reasons and has suggested he’s open to carrying out military operations in Colombia. Secretary of State Marco Rubio has ominously warned that longtime adversary Cuba “is in trouble.”

“This will allow us to build the `Dream Military’ that we have long been entitled to and, more importantly, that will keep us SAFE and SECURE, regardless of foe,” Trump said in a posting on Truth Social announcing his proposal.

The military just received a large boost of some $175 billion in the GOP’s “big, beautiful bill” of tax breaks and spending reductions that Trump signed into law last year.

Insisting on more funding for the Pentagon is almost certain to run into resistance from Democrats who work to maintain parity between changes in defence and non-defence spending. But it’s also sure to draw objections from the GOP’s deficit hawks who have pushed back against larger military spending.

But Trump said he feels comfortable surging spending on the military because of increased revenue created by his administration through tariffs imposed on friends and foes around the globe since his return to office.

The U.S. government collected gross revenues of $288.5 billion last year from tariffs and other excise taxes, up from $98.3 billion in 2024, according to the Bipartisan Policy Center. That’s a meaningful increase in revenues from taxing imports. But it’s not enough to cover the various promises made by Trump, who has said the tariffs can also cover dividends to taxpayers, pay down the national debt and, now, cover increased spending on the military.

Meanwhile, Trump on Wednesday also threatened to cut off Pentagon purchases from Raytheon, one of the biggest U.S. defence contractors, if the company did not end the practice of stock buybacks and invest more profits into building out its weapons manufacturing capacity.

“Either Raytheon steps up, and starts investing in more upfront Investment like Plants and Equipment, or they will no longer be doing business with 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 are able to get their act together.”

The threat came as the president issued an executive order calling on the Pentagon to begin a review to spot defence contractors who are underperforming on fulfilling contracts and insufficiently investing in building manufacturing but are still engaging in stock buybacks or distributing dividends to shareholders.

The order also calls for the Pentagon to take steps to ensure future contracts with any new or existing defence contractor contain a provision prohibiting stock buybacks during a period of underperformance on U.S. government contracts. The order also calls for the Pentagon to stipulate in future contracts that executive incentive compensation is not tied to short-term financial metrics.

Trump in recent months has repeatedly complained broadly that defence companies have been woefully behind on deliveries of critical weaponry, yet continue to mete out dividends and stock buybacks to investors and offering eye-popping salaries to top executives.

The criticism of Raytheon, however, was the most pointed to date of a particular contractor.

The company is responsible for making some of the military’s most widely used and notable missiles, including the Tomahawk cruise missile, the shoulder-launched Javelin and Stinger missiles, and the Sidewinder air-to-air missile.

Raytheon also owns Pratt and Whitney, a company that is responsible for manufacturing a host of jet engines that power aircraft for all the military branches, including the newest F-35 Joint Strike Fighter.

On Wall Street, shares of defence contractors fell, with Northrop Grumman dropping 5.5%, Lockheed Martin declining 4.8% and RTX Corp., the parent company of Raytheon, slipping 2.5%.

Raytheon did not immediately respond to a request for comment.

Aamer Madhani, The Associated Press