Will The US Presidential Election Impact Defense Spending?

We are getting closer to the election of the new President of the USA. Historically, from policy to budget shifts, each U.S. president brings a unique approach to defense spending, impacting technology and military sectors. With 40% of global trade involving the U.S. and Europe, a potential strain in relations could harm America's security, trade, and economic policy.

In general, we see that Republicans seem more inclined to increase defense budgets, while Democrats seem more prone to redirecting these funds toward civil programs. How has that historically affected aerospace and defense, let's discuss below.

Historical Spending

Even for different applications, the USA tends to maintain and reinforce its technological leadership (military or not). However, American presidents from both parties have long criticized the lack of burden-sharing within NATO. Having pointed out that many member countries do not match the 2% of GDP defense spending agreement. The following list contains a few examples of how presidents shaped and influenced defense investments. 

Ronald Reagan (1981-1989) 

Still in the Cold War, to counterbalance Soviet Union influence, he launched the 1983 Strategic Defense Initiative, extending for the first time the defense budget to Space, focusing on building advanced missile defense systems using space-based technology. During Reagan’s administration, initiatives also boosted the development of stealth aircraft and nuclear submarines, placing the U.S. at the forefront of military technology. 

George W. Bush (2001-2009) 

After the infamous attack on 09/11, Bush prioritized defense funding to support military operations in Iraq and Afghanistan, modernizing U.S. intelligence and military tech with increased spending on drones and surveillance systems. The 2001 Patriot Act expanded intelligence capabilities, funneling investments into cybersecurity and surveillance tech that would become central to national security. 

Barack Obama (2009-2017) 

Obama sought a balanced defense budget, reducing foreign engagements while bolstering cybersecurity and intelligence initiatives. The funding saw a shift towards advanced technology, including drone programs and cybersecurity protections for critical infrastructure, essential for evolving defense needs in a digital age. 

Donald Trump (2017-2021) 

Trump continued to increase defense budgets, signing the National Defense Authorization Act (NDAA) with a record $738 billion in 2019. Priorities included the creation of the Space Force and the modernization of nuclear capabilities. His "Buy American" emphasis aimed to reduce reliance on foreign supplies, boosting domestic defense industries.  

Joe Biden (2021-2025)

 
Biden’s administration has maintained high defense spending focusing on modernization, cybersecurity, and renewable energy initiatives in the defense sector. His support for advanced tech, such as AI and data protection, has strengthened the defense response to emerging threats. Additionally, the administration has allocated funds to support security in Europe, particularly amidst the Ukraine-Russia conflict.

The Outcome of the 2025 Election

Both Democrats and Republicans have made vague commitments regarding strengthening the army, but neither has provided many specifics. Furthermore, because funding the armed services is one of the few remaining bipartisan traditions in American politics, presidential elections rarely provoke discussions on defense spending. Under Republicans, we could anticipate greater US pressure on European defense spending levels than Democrats and a quicker cutback in US assistance to Ukraine. A potential sweeping tariff on EU exports to the US would be a significant shock to the European economy, particularly Germany's, and we expect the EU to respond in kind.