Trump claims deal with Netanyahu to stop Israel aid by year end

What Trump said and what is at stake

Trump said he and the Israeli prime minister reached an understanding to halt US funding. "Bibi Netanyahu and I have made a deal," he said in a Tuesday Fox News interview. He said the US gives Israel $4 billion a year and that they agreed months ago to stop, and added Israel is a very successful country that doesn't need the money.

He said the funds would stop by year end and also said the US would keep selling weapons to Israel. "They can buy whatever they want," he said. Trump said Netanyahu suggested the shift and that Washington signaled aid could resume later if needed.

Today's baseline is $3.8 billion a year in US military assistance under a 10-year arrangement negotiated during the Obama administration that runs through 2028. Bringing it to an early close would likely hinge on Congress.

Israel's responses and the election backdrop

Last week, Netanyahu said the era of decades-long US military assistance would come to a close, meaning Israel would fund its own defense. "That is because America has changed, not because Israel has changed," he told Channel 10, adding, "It will end. It is only a matter of time."

Two Israeli foreign ministry officials, speaking anonymously, said they had no knowledge of any move to accelerate the timeline. A finance ministry official likewise said they knew of no plan to cut off US aid by year's end and only learned of the claim from television.

Support for Israel has turned into a major point of contention before Tuesday's Midterm elections that will decide control of Congress. Criticism tied to Israel's military campaign in Gaza after the Oct. 7, 2023 Hamas attacks has helped drive the shift and is being used by Democrats on the trail. In Michigan, Democratic Senate candidate Abdul El-Sayed has argued the funds should be spent at home. Over the past four weeks, Trump has attacked El-Sayed at campaign stops and asserted that the $4 billion payment is being portrayed by the left as a marker of unfairness.

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Reactions, Congress's role, and the wider conflict

Some strategists saw Trump's timing as a final-hour move. Michael Singh - once the White House National Security Council's senior director for the Middle East under George W. Bush - said the timing looked defensive.

Congress writes the legislation that carries out US military and economic aid commitments, and divisions have deepened this year. In July of this year, the House voted down a largely symbolic effort to halt all military aid to Israel.

Israeli opposition leader Gadi Eisenkot criticized Netanyahu, posting on X that discovering via the press a change to the strategic relationship framework "highlights just how much Benjamin Netanyahu's conduct poses a genuine danger." He added, "We can no longer rely on him and must replace him."

Trump's comments arrive as the US and Israel wage a war against Iran that began in late February. The conflict is now in its ninth month, even though Trump and other US officials had said it would be over within weeks, a drag on energy prices and global inflation that has weighed on Republicans in Midterms centered on the cost of living. The US and Iran have intensified diplomacy to avoid another round of all out war, while Axios reported Netanyahu has pressed Trump to resume strikes after the US Midterms and has lately emphasized the necessity of regime change in Iran.

The economic picture and why investors care

Despite three years of war, Israel's economy has remained resilient. Last year, FDI hit an all-time high of $26 billion; this year, growth driven by tech is still forecast to outpace peers. Trump tied the proposed aid halt to that strength and said the US would provide assistance later if Israel needed it.

In plain English: any change to the 2028 aid framework likely runs through Congress, and the politics around Israel, Gaza, and Iran are now intertwined with the Midterms. That mix can sway defense stocks, energy prices, and risk appetite in your portfolio.

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