Donald Trump has ordered a freeze on dividends and share buybacks across the US defence industry until companies dramatically speed up weapons production, marking one of the most aggressive interventions by a president into the military-industrial sector in decades.
In an executive order issued on Wednesday, Trump accused major contractors of prioritising shareholders over soldiers, arguing that delays and cost overruns have left the US and its allies short of critical military equipment. The directive bars payouts unless firms deliver weapons on time and on budget, with the Pentagon tasked with identifying underperforming suppliers within 30 days.
The move jolted markets, sending shares of leading defence companies lower as investors digested the prospect of tighter government control. Trump singled out Raytheon as an example of slow responsiveness, despite its central role in producing Patriot missile systems and other high-demand weapons.
Beyond financial restrictions, the order signals a broader shake-up. Executive bonuses are set to be tied to production speed rather than earnings, and companies may be pushed to build new factories to expand capacity. Trump has also floated limits on executive pay, calling current compensation levels excessive.
The crackdown comes as Washington ramps up military spending amid rising global tensions, with the White House making clear that future defence dollars will be awarded not for balance-sheet performance, but for how quickly weapons reach the battlefield.