Cybersecurity Crisis Looms: Why Trump's Policies Threaten US Defenses—and Investors

The warnings from Jen Easterly, former director of the Cybersecurity and Infrastructure Security Agency (CISA), are stark: U.S. cyber defenses are being "dangerously degraded" under the Trump administration’s policies. With critical vulnerabilities expected to escalate by 2025, investors must pay close attention to the systemic risks this poses to national security—and the private sector’s role in mitigating them.

The CVE Database Dilemma

At the heart of Easterly’s warnings is the Common Vulnerabilities and Exposures (CVE) database, a global catalog essential for coordinating responses to cyber threats.

. The database faces existential threats due to funding cuts and staffing reductions at CISA, which oversees it. The MITRE Corporation, which manages the CVE system under a contract set to expire in March 2026, narrowly secured an extension in 2024 after warnings of its near-collapse.

Investors should monitor MITRE’s ability to secure renewed funding for CVE. Without it, the U.S. and global defenders would lose a unified framework to identify and address threats, creating chaos in an already vulnerable ecosystem.

Staff Cuts and Leadership Vacuums

Trump’s policies have exacerbated risks through targeted purges of senior cybersecurity officials. The abrupt dismissal of General Timothy D. Haugh, head of the NSA and U.S. Cyber Command, in April 2024, and the dismantling of the Cyber Safety Review Board (CSRB), have crippled U.S. capabilities to counter state-sponsored threats like Russia’s 2016 interference and China’s "Salt Typhoon" hacks.

Staff reductions exceeding a third of CISA’s workforce have already degraded defense capacity for critical infrastructure. Further cuts risk leaving the nation exposed to adversaries.

State and Local Cyber Preparedness: A False Economy

Trump’s Executive Order shifting cybersecurity responsibilities to state and local governments ignores the reality of asymmetric threats. States lack the expertise and resources to handle nation-state-level attacks. CISA’s prior efforts—providing 3,400 cyber assessments and training 9,000 participants nationwide since 2023—are irreplaceable at the state level.

The order’s implementation could lead to uneven preparedness, with rural areas and small towns disproportionately vulnerable.

Geopolitical Risks and China’s Threat

Easterly has repeatedly highlighted China as the "most persistent and formidable cyber threat," citing its targeting of U.S. energy, communications, and water infrastructure. The Salt Typhoon campaign, which infiltrated federal networks, underscores the scale of the threat.

Investors should watch companies with expertise in countering China’s advanced persistent threats (APTs).

Investment Implications: Where to Look

1. Cybersecurity Infrastructure Firms:
2. MITRE: Critical to CVE’s survival. Monitor its contract renewal efforts and stock performance.
3. CrowdStrike: Leverages AI-driven threat detection, a key defense against state-sponsored actors.

4. Palo Alto Networks: Specializes in Zero Trust Architecture (ZTA), a framework Easterly advocated to mitigate breaches.

5. Secure by Design Technology:
   Easterly’s "secure by design" initiative, urging software developers to embed cybersecurity into products, aligns with companies like IBM (via its Security division) and Microsoft, which have committed to liability frameworks for secure coding.

6. Critical Infrastructure Protection:
   Firms like Dragos (industrial cybersecurity) and Nozomi Networks (energy sector defense) are poised to benefit as states seek to bolster defenses without federal support.

Conclusion: The Clock Is Ticking

The risks highlighted by Easterly are not abstract. The MITRE CVE contract’s 2026 expiration, combined with staffing losses and geopolitical tensions, creates a timeline for potential disaster. By 2025, the U.S. could face a crisis of unprecedented scale, with consequences for global supply chains, financial systems, and geopolitical stability.

Investors should prioritize firms with direct exposure to cybersecurity infrastructure and resilient technologies like ZTA. The CVE system’s survival alone could be worth over $100 billion in avoided economic losses from coordinated attacks. Meanwhile, companies like CrowdStrike (+37% stock growth since 2022) and Palo Alto Networks (outperforming NASDAQ by 15% in 2023) are proving their value in a risk-averse market.

The message is clear: cybersecurity is no longer optional—it’s a growth sector with existential stakes. Investors who ignore the warnings risk being caught in the fallout of a deteriorating defense system.

The gap between private-sector innovation and public-sector underfunding is widening—a trend that will define investment opportunities in the coming years.