Trump threatens defence giants, demands faster weapons and capped executive pay

United States President Donald Trump has issued a blunt warning to defence contractors supplying the US military, accusing them of profiteering while failing to deliver weapons and equipment fast enough.

In a lengthy Truth Social post on Wednesday, Trump threatened action against the industry unless companies cap executive pay, reinvest profits into factory construction and sharply accelerate production.

“MILITARY EQUIPMENT IS NOT BEING MADE FAST ENOUGH,” Trump wrote in the 322-word message. “It must be built now with the Dividends, Stock Buybacks, and Over Compensation of Executives, rather than borrowing from Financial Institutions, or getting the money from your Government.”

Trump singled out Raytheon, now operating as RTX, accusing the company of dragging its feet while prioritising shareholders.

“I have been informed by the Department of War that Defense Contractor, Raytheon, has been the least responsive to the needs of the Department of War, the slowest in increasing their volume, and the most aggressive spending on their Shareholders rather than the needs and demands of the United States Military,” Trump wrote in a follow-up post.

He warned that government ties with RTX could be severed altogether. The company earns billions from defence work and, as recently as last August, received a $50bn contract from the US Department of Defense, the maximum possible under a 20-year framework agreement covering equipment, services and repairs.

“Our Country comes FIRST, and they’re going to have to learn that, the hard way,” Trump said.

Defence spending is a significant pillar of the US economy. As of 2024, Pentagon spending accounted for roughly 2.7 percent of US GDP, with the annual defence budget typically hovering around $1 trillion.

On Wednesday evening, Trump said he would push congressional Republicans to raise that figure to a record $1.5 trillion for fiscal year 2027.

“This will allow us to build the ‘Dream Military’ that we have long been entitled to and, more importantly, that will keep us SAFE and SECURE, regardless of foe,” he wrote.

Markets reacted nervously. Shares in major defence contractors fell amid uncertainty over how far Trump might go and what legal tools he could use to enforce his demands.

Since beginning his second term, Trump has taken an unusually hands-on approach toward private companies linked to national security. In June, the administration secured a so-called “golden share” in US Steel as part of its approval of the company’s merger with Japan’s Nippon Steel, giving Washington veto power over major corporate decisions.

In August, Intel agreed to sell the US government a 10 percent stake following pressure from Trump, and the administration has since pursued stakes in other firms, particularly mining companies tied to rare earths and critical materials.

It remains unclear how Trump would legally compel defence contractors to comply with his latest demands. But his grievances were explicit, particularly when it came to executive compensation.

“Executive Pay Packages in the Defense Industry are exorbitant and unjustifiable given how slowly these Companies are delivering vital Equipment to our Military, and our Allies,” he wrote.

He also renewed his push for domestic industrial expansion, urging companies to build new factories rather than rely on overseas supply chains.

“From this moment forward, these Executives must build NEW and MODERN Production Plants, both for delivering and maintaining this important Equipment, and for building the latest Models of future Military Equipment,” Trump said. “Until they do so, no Executive should be allowed to make in excess of $5 Million Dollars which, as high as it sounds, is a mere fraction of what they are making now.”

Trump also accused defence firms of being “far too slow” when it comes to repairing and maintaining existing systems. Contractors provide everything from software and training to missiles and armoured vehicles. RTX, for example, produces the Patriot missile system and supplies spare parts and upgrades across the US military.

The Virginia-based company reported more than $80bn in sales in 2024 and this week secured a $438m contract from the Federal Aviation Administration to modernise radar systems.

Trump argued that too much of that revenue is being funnelled into shareholder payouts and stock buybacks.

“Defense Contractors are currently issuing massive Dividends to their Shareholders and massive Stock Buybacks, at the expense and detriment of investing in Plants and Equipment,” he wrote. “This situation will no longer be allowed or tolerated!”