Donald Trump has launched a rare attack on America’s biggest defense contractors, threatening to block allocations and share purchases unless they speed up arms production, as he prepares for a dramatic increase in US military spending.
In a post on his Truth Social platform, the US president warned defense companies that he could no longer tolerate what he described as a buildup of military supplies in “difficult and dangerous” times. His comments came ahead of plans to increase the US defense budget for 2027 by 50 percent, taking annual military spending to $1.5 trillion.
Trump accused the defense administration of prioritizing shareholder returns and personal pay over national security, describing pay packages across the sector as “hundreds and unjustifiable”. He suggested that executive compensation should reach $5 million and said that companies should redirect money used for dividends and share purchases to increase production capacity.
“Military equipment is not done fast enough,” Trump wrote. “It must be built now through dividends, buybacks and excessive executive compensation, rather than borrowing from financial institutions or getting money from your government.”
The remarks marked the president’s rare and direct intervention in Wall Street’s capital allocation decisions. US defense stocks initially fell sharply in response. Shares in Lockheed Martin, Northrop Grumman, RTX and General Dynamics all fell during afternoon trading. The losses were reversed after Trump confirmed his intention to significantly increase defense spending.
Trump singled out Raytheon, a subsidiary of RTX, accusing it of being “less responsive to the needs of the Department of Defense”. He warned that if the company wants future government contracts, it will be barred from making any further share purchases.
The president did not specify how such restrictions would be implemented, raising questions about the legal and regulatory mechanisms available at the White House. Analysts noted that acquisitions and shareholdings are central to the financial strategies of established defense companies, many of which rely on consistent shareholder returns to support their valuations.
Lockheed Martin, for example, raised its dividend for the 23rd consecutive year in October to $3.45 per share, while also authorizing up to $2 billion in share repurchases, bringing its share buyback obligation to more than $9 billion.
Trump’s criticism comes amid long-standing concerns about delays and cost overruns in major US defense programs. Lockheed’s F-35 fighter jet, one of the most expensive weapons systems ever built, has faced schedule delays and rising costs. Meanwhile, Northrop Grumman’s Sentinel intercontinental ballistic missile program, intended to replace the aging Minuteman III system, is now 81 percent over budget, according to the US military.
Neither Lockheed Martin nor Northrop Grumman responded to requests for comment.
For defense investors and contractors alike, Trump’s intervention underscores the growing political risks surrounding the sector, as government spending is set to rise significantly. While a large military budget promises long-term revenue growth, tighter scrutiny of executive pay, capital returns and delivery times could reshape the way defense firms operate in the coming years.
