GeopoliticsMarket noteFriday 6 November 2026, 09:05 UTC
US aid to Israel runs at $3.8bn a year under a deal to 2028. Trump says it stops when 2026 ends, but Congress sets the money and a law says at least $3.3bn.
US aid to Israel will stop at the end of this year, President Donald Trump said on Tuesday, the day of the midterm elections. “We’ve already agreed that by the end of this year we won’t be paying Israel,” he told Fox News, Al Jazeera reported. He said the idea came from Prime Minister Benjamin Netanyahu, and added: “Now, we’ll help Israel if they need it.”
The money is real and the date is early. The United States gives Israel $3.8bn a year in military aid under an agreement signed in 2016 that runs until 2028. But the president does not write the cheque on his own: Congress sets the money each year, and a law already in force says Israel should get at least $3.3bn a year until 2028.
The current deal is a memorandum of understanding worth $38bn over the ten fiscal years from 2019 to 2028: $33bn in Foreign Military Financing grants and $5bn for missile defence, paid in equal parts of $3.3bn and $500m a year, the 2016 White House fact sheet says. The deal also phases out Israel’s right to spend part of the grants at home, and ends its use of them to buy fuel.
Trump put the figure at $4bn and said Israel did not need it. “Israel’s our No. 1. We give them more than anybody else,” he said, Stars and Stripes reported.
He is right that Israel is the biggest recipient. Since 1946 the United States has given Israel about $174bn, or an estimated $298bn in 2024 dollars, the Congressional Research Service calculates. The annual grants now pay for about 14% of Israel’s defence budget, a much smaller share than in earlier decades.
Not by himself, and not by announcement. The grants are paid out of money Congress appropriates. Since 1991 Congress has required Israel’s grants to be paid in a lump sum in the first month of the fiscal year, into an interest-bearing account at the Federal Reserve, the research service notes. The defence act that became law on 1 January 2021 authorises “not less than” $3.3bn a year in grants through 2028.
That makes Congress the place where this is decided, as our explainer on the power of the purse set out on Wednesday. The fiscal year that started on 1 October is the second-to-last of the agreement. Congress could cut the money, keep it, or pass it and let the administration try to hold it back. An analyst at the Atlantic Council, Thomas Warrick, told Al Jazeera he expects the aid to be phased out during 2027 rather than by the end of 2026, because missile-defence and counter-drone programmes are still running.
The timing ties the aid to the election. Trump named the Michigan Democrat Abdul El-Sayed, who has campaigned to end aid to Israel, and called the subject “a bad talking point”. The vote that day was a Democratic sweep that will give the party both houses of Congress in January.
Opinion has moved. In a Quinnipiac poll in June, 48% of voters said the United States was too supportive of Israel, up from 16% in 2017, and 66% of Democrats said so, against 20%, Al Jazeera reported. In July, the House rejected an amendment on the aid by 314 votes to 104. Neither Netanyahu’s office nor the State Department had commented, Al Jazeera said.
For Israel’s finances, $3.8bn is large but not decisive: it is about one shekel in seven of the defence budget. The bigger question is politics at home. Israel’s own election on 28 October left no bloc with a majority, and coalition talks are still going on.
The currency has weakened. The dollar cost NIS 3.167 on 5 November, up from NIS 3.078 on 26 October, the Bank of Israel’s representative rate shows: the shekel lost 2.8% in eight trading days, to its weakest level since 30 March. Most of the fall came in the days after Israel’s own election.
Three things will show whether the aid really stops. First, the spending bills for the fiscal year: whether Congress funds the grants at $3.3bn, and whether the White House asks it not to. Second, any written change to the 2016 agreement, which only the two governments can make. Third, the new Congress in January, where members on both sides have argued for and against the aid for years. Until then the law, and the money already paid, stand.
This is analysis and opinion, not investment advice.
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