Ending US military aid as a national opportunity

Current trends in Washington point to an inward turn and the adoption of a more isolationist policy—an outlook now shared by broad segments of both political parties and enjoying growing support in American public opinion. Under these circumstances, it would be better for Israel to get ahead of the curve and manage the process proactively, rather than wait for the growing impatience of the U.S. administration—and particularly President Trump—toward foreign aid in general, and aid to Israel in particular.

Netanyahu’s remarks should therefore be taken seriously, as this is not an empty statement but a direct continuation of a consistent and well‑developed doctrine. As early as 1996, in his first address to the US Congress, Netanyahu pledged to bring about the termination of US civilian‑economic aid to Israel—a promise he fulfilled.

Just as he understood then that a strong Israel does not need to rely on civilian “crutches,” he now recognizes the capability and maturity of Israel’s economy and security establishment to advance to the next stage: a gradual weaning from military aid in favor of full strategic independence.

That said, translating declarations into action requires an in‑depth examination of three core questions: Is Israel’s economy mature enough to bear the budgetary burden? What are the implications for the IDF’s force‑building process? And how would the special relationship with Washington be affected?

Critics on both the right and the left warn that this is a reckless move that could crack Israel’s security wall and destabilize the economy. However, a deeper look reveals that it is in fact the status quo that is more dangerous. Chronic dependence on external aid weakens diplomatic freedom of maneuver and perpetuates the dependence on American defense industries at the expense of Israeli ones.

The question is not whether Israel can withstand such a move, but how it can leverage it to strengthen national resilience and transform itself from a junior partner into an independent and essential ally.

While this figure reflects current market prices rather than purchasing‑power parity (PPP), that is precisely why it accurately reflects the real volume of resources Israel can allocate to its defense.

When examining the annual scope of the aid—about USD 3.8 billion—it becomes clear that it constitutes only around 0.57% of national GDP. Without downplaying this amount, in macroeconomic terms it is a manageable burden. Against the fiscal cost one must weigh the strategic gain: on the one hand, alignment with the growing isolationist sentiment in the United States, and on the other, the strengthening of Israeli independence in a reality where the American public no longer views foreign aid as sacrosanct.

Beyond the dry numbers, this move would grant Israel a priceless strategic asset: freedom of action. Greater diplomatic and military independence would allow Israel to make fateful decisions without dependence on external dictates arising from aid‑related constraints.

From an even broader perspective, proper leveraging of this move could bring about a historic shift in the Israeli economy. Today, the vast majority of the aid is “earmarked” and tied to procurement from American companies within the United States—a restriction that limits the Ministry of Defense’s purchasing power vis‑à‑vis local suppliers. This dependency has already led in the past to the closure of Israeli production lines and factories that could not compete with the subsidized competition of American defense giants. Freeing Israel from this dependency would make it possible to redirect demand back to domestic industry.

The result would be not only greater security resilience but also the creation of thousands of new, high‑quality jobs, particularly in high‑tech and traditional manufacturing plants in the Negev and the Galilee. This is a move in which national security and Israel’s periphery both stand to gain.

It is important to understand the strategic trap Israel currently faces: the existing Memorandum of Understanding (MoU), signed during the Obama administration, set a gradual phase‑out of Off‑Shore Procurement (OSP)—the privilege that allowed Israel to convert part of the aid into shekels for procurement from local industry. When the agreement expires in 2028, this option will disappear entirely. This reality is likely to worsen under a Trump administration focused on promoting American industries.

This dependency not only undermines political sovereignty; it poses a direct threat to employment in the periphery and to the innovative capacity of Israeli talent. Instead of channeling demand as a “captive customer” to production lines in Ohio or the Carolinas, Israel should be directing demand to Kiryat Shmona, Sderot, and Be’er Sheva. Liberation from aid dependency would serve as a powerful stimulus for the domestic defense industry, restore purchasing power to Israeli hands, and ensure the preservation of Israel’s technological edge on its own merits.

Moreover, events of the past two years have clearly demonstrated that dependence on military aid can become an obstacle—and even a constraint—on the IDF’s freedom of action. In times of emergency, when Israel requires a rapid and decisive resolution, any supply delays or political conditions attached to the use of American munitions undermine our ability to defend ourselves independently.

Drawing lessons from recent conflicts obliges Israel to strive for independence not only in production and stockpiles, but also in decision‑making. Ending dependence on aid would ensure that the only consideration guiding political and security leadership is the national interest of the State of Israel, without the need to glance sideways at foreign interests or internal American political constraints.

Opponents of changing the aid model argue that Israel lacks the deep pockets of Gulf states that entice U.S. administrations with massive investment promises. This, however, is an optical illusion. The value Israel provides to the United States is not measured solely in dollars, but in technological and operational superiority that has no substitute.

For Washington, Israel is a “live battle laboratory.” Take the F‑35 project as an example: Israel is the only country authorized to integrate indigenous systems into the aircraft’s “brain.” Insights from thousands of combat sorties against Russian and Iranian air‑defense systems flow directly to the Pentagon, improve the aircraft’s reliability for customers worldwide, and serve as a living advertisement that has transformed a product once burdened by a problematic reputation into the most sought‑after fighter jet on the planet.

This partnership deepens further in missile‑defense systems. Projects such as Arrow and David’s Sling serve as live testing grounds for the United States in intercepting long‑range ballistic threats. Real‑time operational interceptions provide Americans with invaluable data on sensors, radars, and connectivity—assets they require in confronting threats from China, North Korea, and Iran. In this sense, aid funds are not an expense but an investment that accelerates the development of interception systems that the U.S. military itself deploys worldwide.

Iron Dome is another clear example of mutual benefit. The system, proven under thousands of launches, has become a commercial and reputational engine for American industry (such as Raytheon), which now manufactures a significant portion of its components. The United States not only markets Israel’s success to the world but also procures the system for the protection of its own forces. In this equation, Israel is not merely an aid recipient—it is a development partner in combat‑proven products that generate jobs in the U.S. and strengthen American security.

Ultimately, Israel serves as a critical “beta site” for the American defense industry. The unique intelligence and operational knowledge flowing to manufacturers in Texas and Maryland is a strategic asset whose economic value can be quantified in billions of dollars. In a renewed relationship no longer anchored in the traditional aid model, Israel can and should offer a model of trade in knowledge and performance—payment for development services, operational testing, and real‑world data—to replace traditional aid and establish a partnership of equals.

Redesigning the security relationship with the United States is not merely a political necessity but a reality imposed by the 21st century. Instead of the outdated aid model, Israel must formulate strategic alternatives: a defense treaty ensuring free access to advanced weapons procurement, alongside the establishment of a joint defense R&D fund—similar to the proven success of BIRD or BSF funds in science and industry. Such a fund would allow both sides to benefit from breakthrough developments while preserving a partnership of equals rather than a donor‑recipient relationship.

However, the termination of military aid should not be viewed as an end in itself. It must be an integral part of a new economic vision for Israel—an economy based on technological innovation whose benefits permeate all layers of society. This is where the momentum of defense development must intersect with the periphery. It is in the Negev and the Galilee that future defense industries should be established, integrated into a broader technological ecosystem that provides high‑quality employment and regional growth engines.

Like other leading countries, the government must take direct responsibility and invest massively in future domains—artificial intelligence (AI), the semiconductor industry, and quantum computing. Channeling resources toward these technological infrastructures will ensure that Israel’s economy leaps forward as an independent, pioneering technological power.

As Prime Minister Netanyahu recently noted, Israel plans to invest approximately USD 350 billion over the coming decades in its defense industry, aimed at achieving munitions independence, reducing reliance on allies, and transforming Israel into a major defense exporter. These vast resources must be wisely directed toward the geographic and social periphery. Achieving defense independence is Israel’s greatest opportunity to strengthen national resilience from within and to ensure that Israel of 2026 and beyond is not only stronger and more fortified, but also more just and prosperous for all its citizens.

The special relationship with the United States is undoubtedly one of the greatest achievements of modern Zionism. Throughout history, the mainstream of the Zionist movement wisely relied on a global power to establish the national home: Weizmann and Jabotinsky on Britain, Ben‑Gurion on France, and since 1967—from Eshkol to Netanyahu—the strategic alliance with the United States. This support was a vital asset amid regional hostility and encirclement. However, in the 21st century, the global order is changing, and Israel must adapt to the new reality.

Today’s United States, as reflected in the national security policy document recently presented by the administration, is redefining itself—not as a global power but as a regional one. Among broad segments of the American public, both the isolationist right and the liberal left, the special relationship with Israel is sometimes perceived as a historical anomaly that no longer aligns with new priorities.

Israel must understand the forces shaping our world. The global center of gravity is shifting from control over physical assets to control over what may be termed knowledge‑based capital—algorithms, data, and digital infrastructure. In a reality where the status of the dollar is eroding and the influence of China and India is growing (with India having recently surpassed Japan to become the world’s fourth‑largest economy), Israel cannot afford to remain frozen in the patterns of the previous century.

In other words, beyond security independence, ending U.S. military aid would grant Israel greater freedom of maneuver vis‑à‑vis the rising powers of the East, transforming it from a supported partner into a senior technological partner with real influence in the emerging multipolar global arena.

Ending military aid is the first and necessary step toward building a model of digital and security independence. It represents a transition from reliance on the goodwill of a changing superpower to the construction of a partnership based on shared interests between two strong, technological, and independent states. This is not a renunciation of the alliance with the United States—it is its adaptation to the future.