President Donald Trump announced on Tuesday that the United States will end its $4 billion annual financial aid to Israel after 2026. Speaking to Fox News during a phone call on the day of the U.S. midterm elections, Trump stated that he reached a deal with Israeli Prime Minister Benjamin Netanyahu to phase out the funding. Despite the planned cessation of direct aid, Trump said the U.S. would continue to sell weapons to Israel, describing the transition as a move toward a "barter" or arms-sale relationship.
The announcement comes while the U.S. and Israel are engaged in an ongoing conflict with Iran and more than eight months after a joint attack on the Islamic Republic. Trump attributed the decision to a belief that Israel no longer requires the financial support and a desire to remove a "talking point" used by critics. He specifically cited Abdul El-Sayed, a Democratic Senate candidate in Michigan who has opposed unconditional aid to Israel. Netanyahu had previously stated in an October interview that Israel should prepare for a reduction in U.S. aid as the American political landscape changes.
There is currently a Memorandum of Understanding in place that provides Israel with $3.8 billion in annual military aid through September 2028. Trump did not provide specific details on the mechanism he would use to stop the funding by the end of 2026, two years before the agreement is set to expire. While Congress authorized this funding in 2020, the Senate and House of Representatives must still pass yearly appropriations bills to release the money. Neither the White House nor Netanyahu’s office responded to immediate requests for comment following the president's Tuesday remarks.
The impact will be most visible in the legislative process, where Michigan Senate candidate Abdul El-Sayed and other lawmakers have increasingly challenged the terms of Middle East security assistance. If implemented, Israel would transition from receiving billions in military grants to purchasing equipment directly, a change that Netanyahu previously indicated would require a significant adjustment to Israel's defense budget. The move also follows the House's passage of Section 219 of the 2027 National Defense Authorization Act, which seeks to deepen U.S.-Israeli military technology cooperation.
What happens next depends on the outcome of the 2026 midterm elections and subsequent congressional appropriations cycles. While Trump signaled the aid will stop at the end of 2026, the current funding agreement legally extends to September 2028. Israeli domestic politics also remain in flux following an October 27 election that left Netanyahu without a clear governing majority, leading to protracted negotiations over a new government. Future defense spending will likely be shaped by the final version of the 2027 National Defense Authorization Act and upcoming votes on the yearly bills required to release authorized funds.