Trump Claims Deal With Netanyahu to End US Aid to Israel

U.S. President Donald Trump stated Tuesday that he had agreed with Prime Minister Benjamin Netanyahu several months ago to halt American military aid to Israel. The annual aid package amounts to $3.8 billion and funds the procurement of fighter jets, helicopters, and other key weapon systems for the Israel Defense Forces (IDF). The current aid agreement, signed in 2016 during the Obama administration, is set to expire in 2028. Trump's remarks came as a surprise to Israel's defense establishment, which had already begun discussions with U.S. representatives, led by Ministry of Defense Director General Amir Baram, on a new aid framework for the decade starting in 2029. These future discussions were intended to focus on strengthening technological and research cooperation between U.S. and Israeli industries and gradually reducing aid amounts. Trump, however, claims Netanyahu initiated the idea of ending aid, quoting him as saying, "I think it would be appropriate if we didn't receive aid."

While changes to the aid format were anticipated, the IDF and Ministry of Defense appear unprepared for a complete halt. Israel's defense spending has reportedly spiraled out of control in recent years, leading to a budget deficit of approximately 25 billion shekels, a shortfall the Treasury is struggling to address. The U.S. aid has been seen by some in Israel, including Prime Minister Netanyahu and his right-wing coalition partners, as a tool for the U.S. to exert political pressure. This perspective was amplified when former President Joe Biden restricted the delivery of heavy bombs to Israel during the Gaza conflict, citing concerns over civilian casualties. Netanyahu and his allies strongly criticized Biden's move, accusing him of imposing an arms embargo.

The potential cessation of U.S. aid, which constitutes about 15% of Israel's defense budget, would necessitate significant and potentially difficult budget adjustments. Avishai Ben Shoshan-Gordis, a senior researcher at the Institute for National Security Studies (INSS), noted that U.S. aid is often tied to political demands and that its termination could occur as early as the next budget year, pending Congressional approval. Furthermore, Israel has already committed billions of dollars for future purchases under the assumption of continued aid, potentially requiring the country to fund these orders from its own budget or cancel them, leading to significant financial strain and the need to find alternative funding sources.

Despite the potential end of U.S. financial assistance, Israel's strategic reliance on American defense industries is expected to continue, albeit at a higher cost. The integration of U.S. systems into the IDF's core operations means Israel will likely still need to procure advanced weaponry from American manufacturers, but without the benefit of subsidized funding.