The 2016 U.S.–Israel memorandum of understanding (MOU) provides $38 billion in assistance for fiscal years 2019 through 2028: $3.3 billion annually in Foreign Military Financing (FMF) grants and $500 million for cooperative missile-defense programs. The agreement is a political commitment rather than a treaty, and Congress controls appropriations. Moreover, ordinary assistance under the memorandum differs from supplemental wartime funding. Trump’s announcement alone does not establish whether already appropriated money, existing arms contracts, or jointly funded programs would be affected. Ending financial grants, reducing cooperative defense appropriations, and suspending weapons sales are three different policies.
Consider the American defense industry. FMF largely finances Israeli purchases of U.S.-made military equipment and services, from aircraft to precision weapons. The existing agreement also phases out Israel’s exceptional ability to spend part of those grants on its domestic defense industry by 2028. The result is a predictable stream of demand for American suppliers and a procurement relationship built around U.S. platforms, maintenance, and components.
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