Netanyahu Signals Intent to Gradually End US Military Aid to Israel by 2038

Netanyahu's Vision for Israeli Self-Reliance

In a significant policy statement, Israeli Prime Minister Benjamin Netanyahu announced in an interview with The Economist, published on January 9, 2026, that Israel aims to gradually reduce its dependence on American military aid over the next decade, with the goal of eventually reaching 'zero' aid. This declaration signals a potential shift in the long-standing financial relationship between the two allies, particularly concerning the $3.8 billion annual military assistance package currently in place.

Netanyahu articulated that Israel has 'come of age' and developed 'incredible capacities,' suggesting that the nation's growing economic strength and advanced military capabilities underpin this strategic re-evaluation. The Prime Minister indicated that Israel may not seek a full renewal of the existing aid package when it is up for renegotiation in 2028.

The Current US Aid Package and Its History

The current military assistance to Israel is governed by a 10-year Memorandum of Understanding (MOU), signed in 2016 under the Obama administration, which covers fiscal years 2019 through 2028. This agreement provides Israel with $3.8 billion annually, comprising $3.3 billion in Foreign Military Financing (FMF) grants and an additional $500 million for missile defense systems.

Historically, Israel has been the largest cumulative recipient of U.S. foreign assistance since World War II, receiving over $174 billion in bilateral assistance and missile defense funding (non-inflation-adjusted dollars), or over $300 billion when adjusted for inflation. The vast majority of this aid has been military in nature. The aid package offers Israel unique flexibility, including receiving its annual allocation in a lump sum at the beginning of the fiscal year and the ability to make direct commercial purchases from U.S. defense firms.

Reactions and Strategic Context

The announcement has drawn attention from U.S. officials. U.S. Senator Lindsey Graham, who chairs a Senate subcommittee overseeing military aid, welcomed Netanyahu's stated commitment to reduce reliance on U.S. assistance. Graham expressed his intent to propose measures to 'dramatically expedite the timetable' for ending the aid.

Netanyahu's statement contrasts with earlier reports from November 2025, which suggested Israel was seeking to renew and even expand the aid package for an additional 20 years. The Prime Minister had previously denied these reports, asserting that his direction was 'the exact opposite.' Analysts suggest this pivot could be a strategic move by Israel to assert greater independence and adapt to a changing geopolitical landscape, potentially allowing Israel to stimulate its own defense industry with military spending that would otherwise be tied to U.S. procurement.

Looking Ahead

As the current MOU approaches its expiration in 2028, the coming years will likely see intensified discussions and negotiations between Israel and the United States regarding the future of their military assistance relationship. Netanyahu's stated goal of achieving complete independence from U.S. military aid within a decade marks a significant aspiration for Israel's long-term defense and economic strategy.