Trump Says US Will Stop Paying Israel From 2027, But Arms Sales Can Continue

US President Donald Trump has announced that the United States will stop providing annual financial assistance to Israel after the end of 2026, claiming that he and Israeli Prime Minister Benjamin Netanyahu had agreed to end the payments months ago.

Speaking to Fox News on Tuesday, Trump said Washington currently provides Israel approximately $4 billion annually but would discontinue the funding from January 2027.

“We’ve already agreed that by the end of this year we won’t be paying Israel. Now we’ll help Israel if they need it,” Trump said.

He argued that Israel had become a successful country and no longer needed American financial assistance. Trump added that Israel could purchase US weapons directly, suggesting that Washington’s military relationship with its ally could continue through commercial arms sales rather than annual financial assistance.

However, the announcement has not been accompanied by a formal White House directive, executive order or publicly disclosed agreement with Netanyahu. The precise funding arrangements Trump intends to discontinue also remain unclear.

What Is The Existing Aid Agreement?

The announcement raises questions about the future of the existing US-Israel security assistance arrangement, established through a 10-year memorandum of understanding (MOU) signed in September 2016.

Under the agreement, covering fiscal years 2019 to 2028, Washington committed $38 billion in military assistance to Israel. This comprises $3.3 billion annually in Foreign Military Financing (FMF) and $500 million for joint missile defence programmes, taking the annual total to $3.8 billion.

The FMF programme allows Israel to purchase American defence equipment, services and training, while the missile defence allocation supports joint programmes, including systems designed to counter rockets and other aerial threats.

Trump's reference to $4 billion is therefore a rounded figure rather than the precise annual amount specified under the MOU.

The Congressional Research Service (CRS) notes that the arrangement is subject to congressional appropriations. The agreement is not a legally binding treaty, and Congress retains authority over the allocation of federal funds.

Netanyahu Had Earlier Proposed Ending Aid

Netanyahu had previously expressed interest in reducing Israel's dependence on American military assistance.

During a 2026 briefing to the Knesset's Foreign Affairs and Defence Committee, he said Israel needed to develop greater independence in defence production and indicated that he wanted to phase out US military aid over the following decade.

Trump's latest announcement appears to bring forward that broader objective, although Netanyahu's earlier remarks do not independently establish an agreement to terminate the assistance by December 2026.

What Changes For US-Israel Ties?

The proposed shift could alter the financial structure of Washington's military relationship with Israel, moving away from direct assistance towards arms purchases and other forms of defence cooperation.

Trump has maintained that the US would continue helping Israel if necessary, even after annual payments end. His remarks also leave open the possibility of continued cooperation through military technology, weapons sales and joint defence programmes.

However, it remains unclear whether the announcement covers the entire $3.8-billion annual MOU arrangement, including joint missile defence funding, or only certain categories of military assistance.

The immediate question is whether Washington and Jerusalem will formally revise the existing agreement ahead of its scheduled expiry in 2028, and what role Congress will play in determining future assistance.