After MBS-Trump call, Saudi Arabia pledges $600 bn investment in US

Following talks between US President Donald Trump and Saudi Crown Prince Mohammed bin Salman, the Kingdom of Saudi Arabia  announced it would increase investment and trade with the United States by $600 billion over the next four years.

In Trump’s second term, the call with Salman, popularly called as MBS, is understood to be the first with any foreign leader. Trump has had a close relationship with Saudi Arabia and MBS, the de facto ruler of Saudi Arabia, over the years.

The Saudi investment pledge has followed similar pledges by businesses that are essentially public displays of fealty to Trump. Last month, Softbank pledged to invest $100 billion in the United States in the next four years. Just yesterday, OpenAI, SoftBank, and Oracle announced a Trump-endorsed joint initiative called ‘Stargate’ under which they would invest up to $500 billion in artificial intelligence (AI) infrastructure, such as data centres, over next four years.

The Saudi state media quoted MBS as telling Trump that he had the ability to create “unprecedented economic prosperity” in the United States and that Saudi Arabia wanted to participate in that.

While reports did not clarify where these pledged investments would go, but it is believed that investments may go into sports, weapons, or technology sectors.

While Saudi energy exports to the United States were central to the relationship for decades, the United States has consistently reduced the dependence on Saudi energy imports in recent years. However, the Saudi Arabia continues to rely on the United States for weapons and, as MBS has been diversifying Saudi business portfolio lately and investing extensively in sports, it is expected that pledged investments may go into arms, sports, or tech industries.

Taking part in the U.S prosperity

On his part, Trump said that he would work with the Saudi Arabia “on all that benefits the interests of both countries”, according to Saudi state media.

In a break with tradition in 2017 in his first term, Trump made his first foreign visit to Saudi Arabia.

In remarks on Monday, Trump said that the visit to Saudi Arabia in 2017 came after Saudis pledged to invest $450 billion. He said that he would make his first foreign visit to Saudi Arabia if similar investments would be promised again.

“The first foreign trip typically has been with the U.K. but … I did it with Saudi Arabia last time because they agreed to buy $450 billion worth of our products. If Saudi Arabia wanted to buy another $450 billion or $500 — we’ll up it for all the inflation — I think I’d probably go,” said Trump on Monday.