Donald Trump prizes extra Gulf funding within the US | EUROtoday

With US President Donald Trump resulting from go to Gulf states this week, a key focus shall be securing important new funding for the US economic system.

“President Trump wants the announcement [of more Gulf money for the US],” says economist Karen Young, a senior fellow on the Middle East Institute suppose tank.

“He wants to have a big poster in a meeting that describes where these investments might go. And some estimation of what they will do to the American economy in terms of job creation or his big push, of course, on domestic manufacturing.”

Trump is because of arrive within the Saudi capital, Riyadh, on Tuesday 13 May, to satisfy the nation’s de facto chief Crown Prince Mohammed bin Salman.

Trump is then anticipated to attend a summit of Gulf leaders within the metropolis on 14 May, earlier than travelling to Qatar that very same day, after which ending his three-day journey within the United Arab Emirates (UAE) on 15 May.

The financial significance of the area to Trump is highlighted by the truth that the go to to Saudi Arabia was resulting from be the primary abroad journey of his second time period within the White House. That was earlier than the dying of Pope Francis necessitated Trump attending his funeral in Rome in the direction of the tip of April.

Saudi Arabia was additionally the primary nation that Trump visited throughout his first time period of workplace, going in opposition to the trendy practise of US presidents to begin with the UK, Canada or Mexico.

Securing new investments within the US from Gulf states, and significantly from their state-backed sovereign wealth funds, will assist Trump to sign again residence that his “America First” agenda is delivering outcomes.

The presidential go to is drawing high Wall Street and Silicon Valley leaders to Saudi Arabia. A Saudi-US funding discussion board on 13 May in Riyadh will function CEOs from BlackRock, Palantir, Citigroup, IBM, Qualcomm, Alphabet, and Franklin Templeton.

The push comes amid financial headwinds, as President Trump’s new import tariffs have considerably disrupted international commerce, confidence, and the US economic system itself. US financial output fell within the first three months of this 12 months, its first fall in three years.

Back in January, Prince Mohammed stated that Saudi Arabia would make investments $600bn (£450bn) within the US over the subsequent years. However, Trump has already stated that he’d like that to rise to $1tn, together with purchases of extra US navy gear.

According to Ali Shihabi – a Saudi commentator and creator, with shut ties to the Saudi authorities – quite a few financial agreements shall be signed in the course of the journey.

“These deals will further integrate the Saudi and US economies together, joint ventures in the kingdom, in the United States, procurements of American weapons and goods,” says Mr Shihabi.

Saudi Arabia’s sovereign wealth fund, the Public Investment fund (PIF), which controls belongings value $925bn, already has quite a few investments within the US. These embody Uber, gaming agency Electronic Arts, and electrical automotive agency Lucid.

Meanwhile, the UAE has already dedicated to investing $1.4tn within the US over the subsequent 10 years, in sectors corresponding to AI, semiconductors, vitality and manufacturing. This was introduced by the White House in March after the UAE’s nationwide safety advisor, Sheikh Tahnoon bin Zayed Al Nahyan, met President Trump in Washington.

Yet Ms Young from the Middle East Institute says that the dimensions of those investments isn’t lifelike within the brief time period. She as a substitute says that they’re long-term strategic strikes, and that the figures ought to be taken “with a little bit of a grain of salt”.

Regarding particular offers that may very well be introduced throughout Trump’s go to, it’s extensively reported that Saudi Arabia will agree to purchase greater than $100bn of US arms and different navy gadgets.

These are stated to incorporate missiles, radar programs and transport plane.

The US has been a longstanding arms provider to Saudi Arabia, however in 2021 the then Biden administration stopped promoting Riyadh offensive weapons, citing issues concerning the nation’s function within the struggle in neighbouring Yemen.

The 2018 killing of Saudi journalist Jamal Khashoggi was additionally extensively reported to be an element. A US report stated that Prince Mohammed had permitted the homicide.

The Biden White House resumed the sale of those weapons final 12 months. While it cited that the Saudis had stopped bombing Yemen, some commentators stated that the US was in search of Saudi help to assist finish the battle in Gaza and help its future reconstruction.

Mr Shihabi says Saudi Arabia shall be in search of assurances from the White House that the US will implement a “more efficient procurement system”, enabling the Gulf state to entry ammunition and navy gear way more shortly and simply.

“The Trump administration is initiating procedures to facilitate those deals. So, it’s expected that this process will improve immediately,” he provides.

Artificial intelligence is the opposite subject that may dominate the agenda throughout Mr Trump’s go to. Talks are anticipated to centre on attracting larger Gulf funding into US tech corporations, and boosting the area’s entry to cutting-edge American semiconductors.

The UAE and Saudi Arabia have been investing billions of {dollars} into tech and AI sectors as attempt to diversify their economies away from oil.

The Emiratis, particularly, are eager to ascertain themselves as a worldwide AI hub.

Last week, the Trump administration scrapped the Biden-era chip laws that positioned restrictions on exports of superior US chips to greater than 120 nations together with the Gulf states.

The White House is anticipated to draft new guidelines that will probably contain direct negotiations with nations just like the UAE.

“For the UAE, this is absolutely essential,” says Ms Young. “They are aggressively building out their AI capacity. So, for them getting access to US technology is imperative to be the best.”

While a lot consideration shall be on Trump courting Gulf capital for the US, Saudi Arabia is equally targeted on drawing American funding into its bold Vision 2030 program.

Led by big development tasks, such because the constructing of a linear metropolis known as The Line, Vision 2030 is central to the Saudi authorities’s persevering with efforts to diversify the nation’s economic system away from oil.

It additionally includes pouring sources into leisure, tourism, mining and sports activities.

However, international direct funding into Saudi Arabia declined for a 3rd straight 12 months in 2024, reflecting persistent challenges in attracting abroad capital.

The fall in international oil costs because the begin of the 12 months has additional strained Riyadh’s funds, growing strain to both increase debt or lower spending to maintain its improvement objectives.

Oil costs tumbled to a four-year low amid rising issues {that a} commerce struggle might dampen international financial development.

The decline was additional fuelled by the group of oil producing nations, Opec+, asserting plans to extend output.

Saudi Arabia is a part of that group, and a few commentators stated that the rise was partially a want to please Trump, who has known as for decrease oil costs.

Other analysts stated the rationale was extra that Opec+ stays assured that the worldwide economic system is rising.

The US-Saudi Business Council, is an organisation that goals to spice up commerce ties between the 2 nations.

It is hoping that Trump’s go to will push American companies to discover extra alternatives in Saudi Arabia, particularly in sectors like AI, healthcare and training.

“The Saudi government is looking heavily to invest in these sectors. There is a very big appetite for Saudi companies to collaborate with American companies,” Huthaim Al Jalal, who heads the Riyadh workplace for the organisation, tells the BBC.

Saudi officers are stated to be assured that some offers in these sectors shall be secured throughout Trump’s go to.

For Saudi Arabia, Trump’s go to is about strengthening ties with their longest-standing Western ally – a relationship that grew strained in the course of the Biden years. For President Trump, it’s about touchdown funding offers that may be framed as a win for his financial agenda.

“President Trump is looking for a headline of big investments in America, and he will get that from this trip,” provides Mr Shihabi.