The new Trump administration, which recently took office, is leading a transformation in U.S. foreign and defense policy, with potential implications that could serve as a significant springboard for Israel’s defense industries. In early February 2025, U.S. Secretary of Defense Pete Hegseth issued a key memorandum directing the Department of Defense to reallocate approximately $50 billion—about 8% of the 2026 budget—toward President Donald Trump’s policy priorities.

The budgetary shift, aimed at strengthening border security, upgrading nuclear capabilities, and investing in advanced technologies, could open new doors for Israeli companies in the defense and cybersecurity sectors.

The memorandum outlines key investment areas that will be exempt from budget cuts, including security along the southwestern border with Mexico, missile defense within the U.S., autonomous strike systems, counter-drone initiatives, and critical cybersecurity. These fields present clear opportunities for Israel, which has gained a global reputation for its advanced technologies and proven operational experience, particularly since the “Iron Swords” war.

One of the most prominent areas is border security. With extensive experience in securing complex borders, Israel has previously supported similar efforts along the U.S.-Mexico border. Israeli companies specializing in intrusion detection and identification technologies are expected to see renewed demand from the Trump administration, which is emphasizing the prevention of illegal immigration.

Israel may also play a central role in missile defense. Senior U.S. officials have recently expressed interest in developing an “Iron Dome” for the United States—a direct reference to the Israeli system that has repeatedly demonstrated its effectiveness. With its unique multi-layered defense system, Israel could become a leading partner in such a project if it moves forward.

Israel also stands out in the field of drones and autonomous systems. Local companies have developed advanced counter-drone solutions that have been tested in combat and have gained experience in producing one-way attack munitions. While Russia and Ukraine have made strides in these areas, their ability to collaborate with the U.S. remains limited—giving Israel a clear advantage.

Another area where Israel may shine is cybersecurity. The Trump administration, aware of vulnerabilities in critical U.S. infrastructure, plans to allocate substantial resources to this domain. Israeli companies, which lead in solutions such as Zero Trust and cyber intelligence, are already well-positioned to seize the opportunity.

Additionally, the fight against transnational criminal organizations—including drug cartels and human trafficking networks—could create further opportunities for Israeli companies specializing in intelligence and homeland security. Although a comprehensive security strategy has yet to be released, the Trump administration is expected to move quickly on procurement and equipping efforts to deliver tangible results.

For Israeli defense industries, which benefit from a technological edge and unique operational experience, this presents a golden opportunity to expand in the U.S. market and reinforce Israel’s standing as a global defense powerhouse.

Image - Reuters