The US President Donald Trump is in the Oval Office of the White House in Washington on 13 February 2025.
Kevin Lamarque | Reuters
Defense stocks fell sharply on Thursday afternoon after President Donald Trump suggested that the US could lower defense expenditure.
Trump said in the White House on Thursday that the US could lower defense expenditure at some point in the future. The comments came in the context of Trump that discussed a potential conference on defense expenditure with China and Russia.
“At one point, when things settle, I will meet China and I will meet Russia, especially those two, and I will say that there is no reason for us to spend almost $ 1 trillion on the army. and I will say that we can spend this on other things, “Trump said.
“When we all rectify it, then one of the first meetings I want, President Xi of China and President Putin van Russia, and I want to say let's lower our military budget in two. And we can do that, and me I think we can do that, “he added.
Defense shares that had been higher earlier in the day fell rapidly. Shares of Lockheed Martin dropped 1.6%, Northrop Grumman sank 3.4% and General dynamics lost 2.1%.
Trump has sent mixed messages about military expenditure during his 2024 campaign and in the early days of his presidency.
On the one hand, Trump called Elon Musk and the so -called Ministry of Efficiency of the Government to find places to save costs in the government. Trump has also insisted on a rapid resolution of the war in Ukraine, with many American weapons being purchased.
On the other hand, he has advertised the importance of having a strong army and signed an executive order to explore an “iron dome of America” rocket -cutting weather system. Trump also said on Thursday that the US has the 'greatest military equipment in the world'.
“At the moment, people are confused by a number of different cross -currencies” about Defense spending, TD Cowen policy analyst Roman Schweizer told DailyExpertNews last week.
