How Netanyahu Lost His Bet on Trump

Foreign Policy | Azriel Bermant

U.S. President Donald Trump announced on Fox News during the November 2026 midterm elections that Washington will end military assistance to Israel by the end of the year. The decision followed statements claiming Israeli Prime Minister Benjamin Netanyahu agreed to terminate the aid package. Israeli opposition leaders Ehud Barak and Gadi Eisenkot immediately condemned Netanyahu for endangering national security without consulting defense officials.

U.S. Vice President J.D. Vance attributed Republican midterm losses directly to public opposition over the war with Iran. American voters blamed the conflict for inflation. Netanyahu's rhetoric regarding Iranian nuclear threats previously triggered friction with Israel Defense Forces Chief of Staff Eyal Zamir. Netanyahu now operates as a caretaker leader following inconclusive October elections while Eisenkot attempts coalition building. Loyalists like Shin Bet chief David Zini targeted Arab lawmakers with investigations. Netanyahu remains politically exposed across the American legislative spectrum.

Comment

The abrupt termination of foreign military financing undermines long-term procurement cycles tied to foreign military sales contracts. Israel's defence procurement relies heavily on multi-year commitments under the bilateral 10-year memorandum of understanding to finance capital-intensive platforms like the Lockheed Martin F-35 Lightning II. Converting offshore procurement funds into domestic shekel allocations immediately creates severe fiscal pressure on the Israeli Ministry of Defence budget.

This sudden fiscal deficit forces defence planners to reduce capital expenditure for next-generation research programmes in favour of immediate ordnance stockpiling. Domestic arms manufacturers like Elbit Systems and Rafael Advanced Defence Systems face intense competition against foreign suppliers for reduced state procurement funds. Consequently, the Israeli Air Force faces diminished acquisition rates for precision-guided munitions manufactured on Boeing production lines.

Strategic Question for Discussion

Which carries more weight when absorbing sudden reductions in foreign military financing — sustaining capital platform deliveries like the Lockheed Martin F-35 Lightning II or preserving domestic production lines at Elbit Systems — and what determines that trade-off?

The available evidence points toward air force fleet modernisation taking immediate precedence over domestic industrial subsidies during active regional hostilities. My assessment is that long-term commitments for complex systems like the F-35 Lightning II will be preserved at the direct expense of local procurement contracts for suppliers such as Elbit Systems. This choice reflects an operational imperative for advanced strike capabilities over broader industrial self-reliance.

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