Trump Touts 'Dream Military' With Massive 50% Defence Budget Boost In 202As Colombia, Mexico And Greenland Tensions Grow

(MENAFN- Live Mint) US President Donald Trump has proposed a dramatic expansion of American defence spending, unveiling plans to raise the military budget to $1.5 trillion in 2027 - a 50 per cent increase from earlier projections - as Washington confronts escalating tensions across the Western Hemisphere and the Arctic.

Writing on Truth Social, Trump framed the proposal as a response to what he described as an increasingly perilous global landscape, arguing that the expanded funding would underpin a vastly strengthened armed force capable of deterring any adversary.

A 'Dream Military' amid rising geopolitical strain

Trump said the higher budget would allow the United States to build what he called a“Dream Military”, asserting that it would keep the country“SAFE and SECURE, regardless of foe”. He acknowledged that he had previously favoured a $1 trillion defence budget, but said economic conditions had shifted decisively in favour of a more ambitious plan.

The announcement comes as the administration pursues a more confrontational foreign policy posture, including the recent US operation to seize Venezuelan leader Nicolás Maduro and transfer him to the United States to face drug trafficking charges. US military assets continue to gather in the Caribbean, while Trump has also spoken openly about asserting control over Greenland and suggested military action could be considered in Colombia.

Secretary of State Marco Rubio has further fuelled unease among regional observers by warning that long-time adversary Cuba“is in trouble”.

Tariffs cited as key funding source

Trump credited sharply higher tariff revenues for enabling the expanded defence outlay, claiming the income generated would have been“unthinkable in the past”, particularly during the previous administration. He said the increased funds would make it possible not only to strengthen US military power, but also to reduce national debt and deliver what he described as a dividend to moderate-income Americans.

According to data from the Bipartisan Policy Center, the US government collected $288.5 billion in gross revenue last year from tariffs and excise taxes, up from $98.3 billion in 2024 - a substantial rise, though still well short of covering all of the administration's stated fiscal ambitions.

The proposed increase would come on top of an estimated $175 billion boost to defence spending already enacted under last year's Republican-backed tax and spending legislation. The current military budget for 2026 stands at $901 billion.

Political resistance likely in Congress

Despite Republican control of the White House, the proposal is expected to face resistance on Capitol Hill. Democrats have traditionally pushed to maintain parity between defence and non-defence spending, while fiscal conservatives within Trump's own party have warned against further widening the federal deficit.

Trump, however, insisted he was comfortable pursuing the surge in military spending, citing the revenue generated through tariffs imposed on both allies and rivals since his return to office.

Warning shot at defence contractors

Alongside the budget proposal, Trump issued a stark warning to major defence firms, singling out Raytheon over its use of stock buybacks. He threatened to cut off Pentagon business unless the company invested more heavily in manufacturing capacity and curtailed shareholder payouts.

“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 wrote.“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 president also signed an executive order directing the Pentagon to review defence contractors' performance and to restrict stock buybacks and executive incentive pay where companies fall short on government contracts.

Market reaction and industry scrutiny

The comments rattled defence stocks, with shares of major contractors falling sharply. Raytheon's parent company RTX Corp. slipped 2.5 per cent, while rivals Northrop Grumman and Lockheed Martin recorded steeper losses.

Raytheon is a cornerstone of the US defence industrial base, producing key weapons systems including the Tomahawk cruise missile, Javelin and Stinger missiles, and the Sidewinder air-to-air missile, as well as jet engines through its subsidiary Pratt & Whitney.

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