US President Donald Trump has said Washington will stop providing Israel with approximately $4 billion in annual assistance from 2027, while continuing to sell weapons to its closest ally in the Middle East.
Trump announced the proposed change during a phone interview with a news agency, saying he had discussed the arrangement with Israeli Prime Minister Benjamin Netanyahu over the past two years.
According to the US President, Netanyahu had approached him about ending the assistance, arguing that Israel no longer needed the financial support.
Trump described the annual payments as a significant expense for the United States, suggesting that continued assistance was no longer necessary given Israel’s financial and military position.
“You can consider it barter. You can consider military aid or cash. 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.”
Donald Trump
Trump also suggested that the arrangement had become politically difficult for Republicans, particularly as Democratic candidates increasingly question the scale of American support for Israel.
Israel Aid Becomes US Political Issue
Trump specifically criticised the use of US assistance to Israel as a campaign issue, referring to Michigan Democratic Senate candidate Abdul El-Sayed, a vocal critic of Israel.
He argued that the annual assistance had become an easy target for Democratic candidates seeking to challenge Republican positions on foreign policy and public spending.
“The left uses the $4 billion payment — that everybody knows about, it’s no secret — as a signal of unfairness. And we can’t allow that to happen.”
Donald Trump
He added that he did not want Republicans to face criticism over the payments when, in his view, Israel no longer required the assistance.
Trump questioned why Republicans should “suffer the slings” of political attacks over the funding, particularly when other countries did not receive comparable levels of American support.
“It’s a bad talking point because when you say, ‘Why don’t we give everybody $4 billion?’ Israel’s our number one; we give them more than anybody else, and they no longer need it.”
Donald Trump
However, Trump indicated that the United States could reconsider the decision if Israel required financial assistance in the future.
He also emphasised that ending direct aid would not mean ending defence cooperation, as Washington would continue selling weapons and military equipment to Israel.
Decades-Long Security Agreement Under Review
The United States has provided Israel with tens of billions of dollars in military assistance over several decades, with much of the funding structured through long-term security agreements.
In 2016, former President Barack Obama signed a 10-year memorandum of understanding with Israel committing Washington to provide $38 billion in security assistance between 2019 and 2028.
The agreement provides approximately $3.8 billion annually, comprising foreign military financing and funding for missile defence programmes.
Under the arrangement, Israel receives foreign military financing to purchase American-made defence equipment. The agreement also provides for the gradual elimination of provisions that previously allowed Israel to spend part of the funding on its domestic defence industry.
Much of the assistance therefore supports American defence manufacturers, as Israel is required to use the funding to purchase eligible US-produced military equipment.
A reduction or termination of the assistance could consequently affect American defence contractors if Israel does not replace the funding with direct purchases of comparable value.
The implications would depend on the terms of any new arrangement and the extent to which Israel continues to procure American military equipment.
Netanyahu has previously spoken about reducing Israel’s dependence on American military assistance, although his earlier proposals envisaged a longer transition period.
In an interview with The Economist in January, the Israeli prime minister said he wanted to “taper off” US military aid over the following 10 years, describing the process as already being considered.
His remarks reflected a broader debate in Israel over the country’s long-term reliance on American financial and military support.
In May, the United States and Israel began formal discussions on a new security agreement to replace the existing memorandum of understanding. However, it remains unclear whether the two governments have reached a framework for the proposed arrangement.
Trump’s announcement signals a possible shift in the structure of the longstanding security relationship, moving away from direct financial assistance towards greater reliance on commercial arms purchases.
Although the President has presented the proposed change as an acknowledgement that Israel can finance more of its own defence needs, the future of US-Israel military cooperation will depend on the details of any replacement agreement.
The decision could also have consequences for American defence companies, which benefit from the requirement that much of the existing assistance be spent on US-manufactured military equipment.
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