United States President Donald Trump has issued a sharp warning to defense contractors, demanding immediate reforms to executive pay, factory investments, and military production timelines. The President’s comments, posted on his social media platform Truth Social on January 8, 2026, highlight growing tension between the federal government and private defense companies supplying the US military.

Trump Criticizes Defense Contractors for Profit Over Production

In a detailed 322-word post, Trump accused defense companies of prioritizing shareholder dividends, stock buybacks, and executive compensation over the urgent needs of the military.

“MILITARY EQUIPMENT IS NOT BEING MADE FAST ENOUGH. It must be built now with the Dividends, Stock Buybacks, and Over Compensation of Executives, rather than borrowing from Financial Institutions, or getting the money from your Government,” Trump wrote.

The President singled out Raytheon, now RTX, as the worst offender. According to Trump, the company has been slow to increase production volumes and overly focused on shareholder payouts.

“I have been informed by the Department of War that Defense Contractor, Raytheon, has been the least responsive to the needs of the Department of War, the slowest in increasing their volume, and the most aggressive spending on their Shareholders rather than the needs and demands of the United States Military,” Trump stated.

He also threatened to sever government contracts with RTX, which had earned a $50 billion, 20-year contract from the Department of Defense in August 2025 to supply military equipment, services, and repairs.

Calls for Executive Pay Caps and Factory Expansion

Trump demanded that executives in defense firms limit their compensation until new production plants are built.

“From this moment forward, no Executive should be allowed to make in excess of $5 Million Dollars which, as high as it sounds, is a mere fraction of what they are making now,” Trump said.

He also urged private companies to invest in constructing modern facilities for producing and maintaining military equipment, including future-generation weapons systems.

Defense Budget Expansion

As part of his message, Trump announced plans to increase the US defense budget to $1.5 trillion for fiscal year 2027, a record high, up from the current $1 trillion. The goal, he said, is to build the “Dream Military” and ensure national security regardless of adversaries.

“This will allow us to build the ‘Dream Military’ that we have long been entitled to and, more importantly, that will keep us SAFE and SECURE, regardless of foe,” Trump wrote.

Stock Market Impact and Industry Repercussions

Following Trump’s posts, shares of major defense contractors, including RTX, saw significant declines amid investor uncertainty. Analysts warn that the President’s threats could create long-term instability in the defense sector if enforced.

Since his second-term inauguration in 2025, Trump has adopted a hands-on approach toward private companies with national security relevance. Recent examples include acquiring a “golden share” in US Steel and a 10% government stake in Intel, granting the administration veto power over major corporate decisions. Similar pressure has been applied to mining companies producing rare earth minerals and other strategic resources.

Concerns About Legal Authority

While Trump has issued stern demands, questions remain about whether the President has the legal authority to enforce executive pay caps or mandate private factory construction. Experts note that defense contracts are typically negotiated under federal law and company boards, potentially limiting unilateral presidential action.

Industry Responsibilities

Defense contractors provide a wide range of critical services, including weapons systems, software, and military training. RTX, for example, manufactures the Patriot Missile and supplies spare parts for ongoing maintenance. With annual sales exceeding $80 billion in 2024, Trump argued that companies should prioritize reinvesting profits into production rather than shareholder returns.

“Defense Contractors are currently issuing massive Dividends to their Shareholders and massive Stock Buybacks, at the expense and detriment of investing in Plants and Equipment. This situation will no longer be allowed or tolerated!” Trump wrote.

Conclusion

President Trump’s latest actions underscore a growing conflict between the US government and defense contractors, with potential consequences for military readiness, corporate governance, and stock markets. The administration’s insistence on prioritizing production over profits reflects an aggressive approach to national security procurement that is likely to continue shaping the defense industry in 2026 and beyond.