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.