DOD officially launches new Economic Defense Unit to mesh military aims with global financial sway

Deputy Defense Secretary Steve Feinberg set up a new unit to lead all the Pentagon’s work that involves fusing economic leverage and requirements into joint U.S. military planning and operations, according to a memorandum obtained by DefenseScoop.

The two-page memo formally establishes the Economic Defense Unit and the position of EDU director, who will oversee the new hub and report to Feinberg as the deputy secretary’s principal advisor for economic competition across the Defense Department.

“Economic Competition is the coordinated and deliberate application of economic tools including capital, procurement, policy, trade, tariffs, regulatory authorities, export controls, and other potential economic activities to expand the United States’ economic advantage by deterring, denying, disrupting, and helping to defeat adversaries through economic means,” Feinberg wrote to Pentagon leadership, combatant commanders, and Defense agency and field activity directors.

Broadly, EDU appears to be a new specialized division within the DOD that’s designed to employ methods and private-sector financial expertise to counter adversaries’ economic influence across the globe.

Three officials familiar with the new unit suggested to DefenseScoop this week that it’s been operating for more than a month.

Its launch comes as the Pentagon is overhauling its procurement approaches to prioritize speed via contract incentives, direct-to-supplier strategies, and expanding its use of commercial technologies — among other moves that align with the second Trump administration’s whole-of-government priorities to accelerate federal business.

Defense Secretary Pete Hegseth briefly mentioned the EDU in a November 2025 memorandum with a range of provisions that aimed to modernize the Pentagon’s purchasing processes and vision. He instructed the team to work with the undersecretariat of defense for acquisition and sustainment to create a “Wartime Production Unit” and a playbook for “deploying capital in various forms [that is] tied to pre-agreed performance metrics.”

Feinberg’s new guidance on the EDU states that it will be “administratively aligned” within A&S.

In the memo, the deputy secretary outlines several specific mandates for the unit to accomplish, in coordination with relevant principal staff assistants and component heads.

He directs the EDU to develop “requirements for Economic Competition activities that may include access, basing, and overflight; countering mobilization of adversaries; countering defense industrial base activities by adversaries; and ensuring access of the United States to critical materials and capabilities.” 

The unit will support the DOD’s National Defense Strategy, National Military Strategy, and National Defense Industrial Strategy, and partner with relevant stakeholders to develop a department-wide strategic plan and implementation roadmap that positions the U.S. to maximize economic leverage and advance its national interests “while countering adversarial objectives through economic means,” the directive states.

Feinberg also instructed the EDU to “sponsor and conduct regular tabletop exercises and activities to assess the economic impacts of decisions” the DOD makes during crises and conflicts; evaluate economic tools available to the U.S. government that can be applied to augment the military’s capabilities; and assess planning scenarios or concept development for economic competition activities that might be used by the department.

Officials in the new hub will advise Pentagon leadership on modern contracting and commercial approaches. 

They’ll also “support the use of economic, commercial, financial, pricing, data and analytical tools, capital and capital markets, regulatory, legal, risk-management, and other economic capabilities in furtherance of U.S. military advantage and to counter adversaries’ coercive leverage,” the memo notes.

In order to “advance a more integrated public-private approach” to economic competition, Feinberg also directs personnel within EDU to work with officials in the Office of Strategic Capital, Office of the Assistant Secretary of Defense for Industrial Base Policy, Strategic and Critical Materials Board of Directors, National Defense Economic Defense Research Council, and the National Security Capital Forum. 

Reports emerged in March that DOD was recruiting from multiple Wall Street players to staff “investment teams” at its new EDU. Some experts warned that that structure could allow for the department to hire financiers involved with the private-equity community poised to possibly gain from the efforts. 

Feinberg, a billionaire, co-founded the global investment firm Cerberus Capital Management in the early 1990s.

The Pentagon’s budget request for fiscal year 2027 included $593 million in research, development, test and evaluation funding for the EDU. Allotments were also approved in the 2026 budget to fund the unit.

The Pentagon declined to comment on the EDU in response to questions from DefenseScoop this week.

Feinberg’s memo did not identify the official who will be leading the unit. However, as of Friday the agenda for this year’s SOF Week conference includes an official named George Kollitides with the title of EDU director, who is slated to speak at the premier annual gathering for the international Special Operations Forces community in Florida next month.