The U.S. Massive Defense Spending Makes Arms Dealers Profiteer from War

Reference News Network, April 28 According to a report by the U.S. magazine Fortune on April 25, there are relatively few winners in the Iran war. The warring parties are at a stalemate, and fuel-consuming countries around the world remain mired in difficulties, while business leaders hold their breath, watching whether the economy can avoid recession. However, one area is thriving. The business of U.S. defense companies is skyrocketing, not just because of the Middle East war. In addition to responding to conflicts, the Department of Defense is also trying to replenish its dwindling stockpiles of weapons and ammunition. Many weapons and ammunition were used up during the U.S.'s initial strike against Iran, and of course, significant amounts were also consumed in military aid to other countries, including Ukraine.

As a result, the Pentagon has issued orders worth hundreds of billions of dollars, and defense contractors have long been prepared to seize this wealth.

Lockheed Martin CEO Jim Taiclet said during the earnings call on the 23rd, "The government's prioritization of investment in the defense industry and defense modernization provides a favorable premise for our company's operations."

He stated, "This is a once-in-a-lifetime opportunity, depending on who is in power, their experience, and their willingness to change product demands."

The Pentagon under Trump has been the most extravagant in recent years.

In 2026, Congress agreed to allocate a record $901 billion to the Department of Defense led by Hegseth. Earlier this year, Trump submitted a defense spending budget for 2027—an enormous war budget of up to $1.5 trillion. Trump himself indicated that the increased 40% defense budget might have to be achieved by cutting federally funded domestic programs, including cuts to Medicaid and Medicare.

Of this massive funding, hundreds of billions will be used to purchase new warships and jets, as well as the $18 billion for the "Iron Dome" missile defense system announced by Trump last year, not including the substantial military expenditures resulting from the U.S. war against Iran. The defense budget was finalized before the conflict began, but as the war extended from days to weeks, costs have escalated. Reports indicate that last month, the Pentagon requested an additional $200 billion from the White House.

When asked about this additional funding, Hegseth said that the figure "may still change."

All these new defense expenditures are a windfall for defense contractors. Since World War II, the budget allocated by the Department of Defense to defense contractors has been steadily increasing, but this spending has surged in recent decades.

A study released last year by the Quincy Institute for Responsible Statecraft and Brown University found that in the 1990s, only 41% of military spending went to private military contractors. However, between 2020 and 2024, this figure jumped to 54%, meaning that approximately $2.4 trillion of the Pentagon's $4.4 trillion budget during this period flowed to military contractors. The five largest defense companies—Lockheed Martin, RTX (formerly Raytheon), Boeing, General Dynamics, and Northrop Grumman—received $771 billion.

During Trump's second term, these companies received a large number of orders to help replenish military stockpiles. Last month, executives from defense companies met with Trump to discuss the issue of tripling production targets to fulfill order commitments. Other large and small U.S. defense companies also hold hundreds of billions of dollars in product orders, ranging from "Patriot" interceptors to F-35 fighter jets. As of 2025, RTX has $107 billion in defense orders to fulfill. Lockheed Martin stated that it expects to secure orders totaling a record $194 billion. (Translated by Pan Xiaoyan)