Donald Trump’s approach to policy is often described as transactional: he is a tough New York dealmaker, not a politician from the Washington swamp.
Yet the president’s rhetoric thus far when it comes to international economic relationships – from Mexico to the EU – has come across as more narrowly focused than supportive of mutually beneficial agreements.
Robert Mogielnicki, a scholar at the Arab Gulf States Institute in Washington, says that the second coming of Trump’s “Make America Great Again” platform leaves no doubt about the only country in focus. That country is the US.
“Global governments either understand this or are learning it pretty quickly,” Mogielnicki said.
Saudi Arabia is a case in point.
In the two months since his inauguration, Trump has asked the kingdom for $1 trillion worth of investments into the US in the next four years, lower oil prices and normalisation of its relationship with Israel to expand the Abraham Accords, among other things.
These demands come at perhaps the worst possible time for Saudi officials, who need higher oil prices and inbound investment to sustain the massively expensive Vision 2030 development push.
The optics of a Saudi-Israeli rapprochement are also bad as Israel’s war against Hamas in Gaza rages on.
So what exactly is Trump offering Saudi Arabia in return for these painful commitments?
That part is not entirely clear, unless Riyadh’s goal is to stay out of the US president’s vindictive sights. It is good not to be Canada these days.
To be sure, Trump has chosen Saudi Arabia to host peace talks with Russia and Ukraine, raising the kingdom’s global profile as a geopolitical player.
Trump also spoke at the Saudi-backed Future Investment Initiative forum in Miami, the first-ever US president to do so, and heaped praise on the Saudi officials in attendance.
Earlier this month the US president pledged to visit Saudi Arabia before the end of April, in what could be the first foreign trip of his second term and a repeat of 2017.
“This time, they’ve gotten richer, we’ve all gotten older,” Trump told reporters on March 7. “So I’m going to be going there, and I have a great relationship with them, and they’ve been very nice.”
“It matters for Bin Salman’s global standing and importantly his domestic legitimacy. A public fight with the White House would complicate this
Steven Wright, Hamad Bin Khalifa University in Qatar
US recognition is among the objectives Crown Prince Mohammed Bin Salman is seeking while he solidifies his position as Saudi heir apparent, according to Steven Wright, a GCC-focused political economist at Hamad Bin Khalifa University in Qatar.
“It matters for his [Bin Salman’s] global standing and importantly his domestic legitimacy,” Wright told AGBI. “While he is regarded as secure, a public fight with the White House would complicate this during this transitional period.”
Saudi Arabia has other goals, in line with what it sought during the Joe Biden administration.
They boil down to security guarantees and sales of military equipment under a Nato-like defence pact, according to Wright.
The framework ideally includes the transfer of civil nuclear technology and enrichment rights and public US support for Vision 2030 to spur investor interest. The nuclear technology transfer issue is on hold as the kingdom refuses to allow spot checks of any nuclear facilities.
“I think Saudi Arabia would still be after the same from the US and Trump might try to offer these, but congressional approval is less certain,” Wright noted.
The main roadblock for Riyadh in dealing with Trump is that its interests and those of the US on certain core issues diverge.
Mogielnicki, for instance, foresees a “strong likelihood of increasing friction” in the energy policy domain – starting with the impact of Trump’s “drill, baby, drill” mantra.
“Any steps taken by the US that raise the regional temperature in the Middle East would also run counter to the de-escalatory regional foreign policies of Gulf countries that have taken hold in recent years,” Mogielnicki said.
Complicating matters further is growing economic and market volatility in the US and globally amid Trump’s erratic choices around tariffs.
Would an eventual US recession make the president more or less aggressive in his demands to allies and partners? This is as hard to predict as the likelihood of recession.
Ultimately Saudi Arabia is doing the right thing in engaging in a two-step dance with Trump, who seems to enjoy the process for its own sake. In courting him it is always a good idea to embrace boasting about the top line without sweating the details. And senior Saudi officials seem to understand this.
The likelihood is that both parties will get less than they want from each other. The $1 trillion in Saudi investments in America, for example, is likely to materialise as closer to $100 to $200 billion.
The UAE offers an interesting playbook for transactional politics in the age of Trump.
Emirati officials have settled on a straightforward but laser-focused strategy of offering investment and other concessions in exchange for one thing and one thing only: access to more US AI microchips and expertise.
When negotiating with a US president with a long memory but a short fuse and attention span, simplicity may rule the day.
Valentina Pasquali is a senior editor at AGBI
Leave a Reply