 "US President Donald Trump and Saudi Crown Prince and Prime Minister Mohammed Bin Salman shake hands during a Memorandum of Understanding (MOU) signing ceremony at the Royal Court in Riyadh, Saudi Arabia, on Tuesday. Reuters")
In a major boost to US-Saudi ties, President Donald Trump secured a $600 billion investment pledge from Riyadh and agreed on a $142 billion arms deal — touted as Washington’s largest-ever defence agreement
Trump is on a three-nation tour that began in Saudi Arabia on Wednesday. He will also be travelling to United Arab Emirates and Qatar. It is the first major foreign trip of his second term.
Trump emerged from Air Force One punching in the air as he was welcomed by Saudi Crown Prince Mohammed bin Salman. The two later signed a sweeping agreement in Riyadh covering energy, defence, mining, and other sectors.
As part of the visit, Trump also finalised a nearly $142 billion arms package for Saudi Arabia, which the White House described as the largest defence cooperation deal in US history.
The package includes contracts with over a dozen American defence firms in key areas such as air and missile defence, aerospace, maritime security, and military communications.
“Today we hope for investment opportunities worth $600 billion, including deals worth $300 billion that were signed during this forum,” Reuters quoted the Saudi crown prince as saying in a speech during a US-Saudi Investment Forum session held in Riyadh on the occasion of Trump’s visit.
“We will work in the coming months on the second phase to complete deals and raise it to $1 trillion,” he added.
Saudi Arabia ranks among the top buyers of US weaponry. In April, Reuters reported that Washington was preparing to offer the kingdom an arms package exceeding $100 billion in value.
“I really believe we like each other a lot,” Reuters quoted Trump as saying during a meeting with the crown prince, Saudi Arabia’s de facto ruler.
The US and Saudi Arabia have held talks on Riyadh’s possible acquisition of Lockheed Martin’s F-35 fighter jets, Reuters quoted sources familiar with the discussions, a deal long sought by the kingdom. However, it remains unclear if the F-35s are part of the package announced Tuesday.
Impact Shorts
View AllPresident Trump, joined by US business leaders including Elon Musk, will continue his Gulf tour with stops in Qatar on Wednesday and the United Arab Emirates on Thursday.
Interestingly, Israel is not on the itinerary, prompting speculation about its current standing in US foreign policy priorities. The focus of Trump’s visit is centered on economic investment rather than regional security.
“While energy remains a cornerstone of our relationship, the investments and business opportunities in the kingdom have expanded and multiplied many, many times over,” Saudi Investment Minister Khalid al-Falih told the investment forum.
“As a result … when Saudis and Americans join forces very good things happen, more often than not great things happen when those joint ventures happen,” he said before Trump’s arrival.
Trump told the investment forum that relations with Saudi Arabia will be even stronger.
He was shown speaking with Riyadh’s sovereign wealth fund governor Yaser al-Rumayyan, Aramco CEO Amin Nasser, and Falih as he toured a hall that showed off models for the kingdom’s flashy, multi-billion-dollar development projects.
Trump called the Saudi crown prince a friend and said they have a good relationship, according to a pool report from the Wall Street Journal, adding that Saudi investment would help create jobs in the U.S.
Big investments
Business leaders at the investment forum included Larry Fink, the CEO of asset management firm BlackRock; Stephen A. Schwartzman, CEO of asset manager Blackstone; and Treasury Secretary Scott Bessent.
Musk chatted briefly with both Trump and the crown prince, who is otherwise known as MbS, during a palace reception for the U.S. president. And joining Trump for a lunch with MbS were top US businessmen including Musk, the Tesla and SpaceX chief, and OpenAI CEO Sam Altman.
MbS has focused on diversifying the Saudi economy in a major reform programme dubbed Vision 2030 that includes “Giga-projects” such as NEOM, a futuristic city the size of Belgium. Oil generated 62% of Saudi government revenue last year.
The kingdom has scaled back some of its ambitions as rising costs and falling oil prices weigh.
Saudi Arabia and the U.S. have maintained strong ties for decades based on an ironclad arrangement in which the kingdom delivers oil and the superpower provides security in exchange.
Trump left Israel off his schedule although he wants Israeli Prime Minister Benjamin Netanyahu to agree to a new ceasefire deal in the 19-month-old Gaza war.
Israel’s military operations against Hamas in Gaza and Hezbollah in Lebanon, and its assassinations of the two Iran-allied groups’ leaders, have at the same time given Trump more leverage by weakening Tehran and its regional allies.
U.S. and Iranian negotiators met in Oman at the weekend to discuss a potential deal to curb Tehran’s nuclear program. Trump has threatened military action against Iran if diplomacy fails.
Trump told the investment forum he wants to offer Iran a new and better path toward a more helpful future. If no new nuclear deal is reached, he said, Tehran will face maximum pressure.
Trump’s Middle East envoy, Steve Witkoff, said last week he expected progress imminently on expanding accords brokered by Trump in his 2017-21 first term under which Arab states including the UAE, Bahrain and Morocco recognised Israel.
Trump said it was his “fervent hope” that Saudi Arabia would soon sign its own normalization agreement with Israel, adding, “But you’ll do it in your own time.”
Still, Netanyahu’s opposition to a permanent stop to the war in Gaza or to the creation of a Palestinian state makes progress on similar talks with the Saudis unlikely, sources told Reuters.
With inputs from agencies