Tour of Middle East by President Trump: Evaluating US-Gulf Investments

Fresh Take:

President Donald Trump embarks on a Middle East adventure, setting foot in Riyadh, Saudi Arabia, around 10am local time on the 2nd of May, greeted with warmth by Crown Prince Mohammed bin Salman (MBS).

Over the upcoming three days, the globe-trotting leader will touch down in Qatar and the United Arab Emirates (UAE), with a financial focus on penning economic accords with these oil-rich nations.

The agenda for each country visit

Trump's itinerary for May 2nd includes attending a Saudi-US investment forum featuring key players such as BlackRock, Citigroup, Palantir, Qualcomm, and Alphabet in Riyadh.

The next day, the 3rd, he will participate in a Gulf summit in Riyadh before jetting off to Qatar in the evening. His journey concludes in the UAE on May 4th.

A historic first visit

Trump's 2021 presidential term marked his initial international foray into the Middle East, a departure from the traditional approach of visiting North American counterparts first.

During this 2021 tour, he visited Saudi Arabia from May 20 to 22. The high-profile trip aimed to strengthen defense ties and clinch significant arms deals. The visit also took him to Israel and Palestine.

Although Qatar and the UAE did not receive Trump's presence during his 2021 stay, he had met Qatar's Emir Sheikh Tamim bin Hamad Al Thani, Bahrain's King Hamad bin Isa Al Khalifa, and Egyptian President Abdel Fattah el-Sisi at the Riyadh Summit.

During the summit, Trump and Saudi King Salman bin Abdul Aziz Al Saud inked a monumental $110 billion arms deal, comprising missile defense systems, tanks, combat ships, and cybersecurity technology, with an expected $350 billion worth of arms over the next ten years.

An unforgettable moment from Trump's 2021 Saudi Arabia visit was the global-wide sensation generated by the inauguration of the Global Center for Combating Extremist Ideology in Riyadh. In a peculiar photo op that quickly went viral, Trump stood alongside King Salman and President el-Sisi, their hands resting on a glowing orb.

Gulf investments: A goldmine

Sami al-Arian, director of the Center for Islam and Global Affairs at Istanbul Zaim University, revealed to Al Jazeera that Trump's primary objective for this three-nation tour is investments.

The Trump administration is reportedly discussing expediting investments by Saudi Arabia, Qatar, and the UAE before the trip to the region.

"He's trying to siphon trillions of dollars from these countries," al-Arian told Al Jazeera.

"He's already expressed that he hopes to secure $1 trillion from Saudi Arabia in terms of arms sales and commercial deals," he added.

Investments by Country

According to the US Department of Commerce, the total US foreign direct investment (FDI) in Saudi Arabia reached $11.3 billion in 2023. Conversely, Saudi Arabia's FDI stock in the US stood at $9.6 billion, mainly in transport, real estate, plastics, automotive, financial services, and communications.

In 2023, the total US FDI in Qatar was estimated at $2.5 billion. US companies primarily channeled investments into the energy, petrochemicals, construction, engineering, and communications technology sectors in Qatar. Conversely, Qatari FDI stock in the US reached $3.3 billion in 2023, with investments centered on financial services, energy, and real estate.

For the UAE, the total US FDI reached $16.1 billion in 2023. The Reuters news agency identified the manufacturing, finance and insurance, construction, and wholesale and retail trade sectors as the primary drivers for FDI in 2023. Meanwhile, UAE FDI stock in the US totaled $35 billion in 2023, with investments primarily directed at financial services, transport, food and beverages, aerospace, and business services.

In March, UAE National Security Adviser Tahnoon bin Zayed Al Nahyan sealed a $1.4 trillion investment promise to the US over the next 10 years in sectors such as artificial intelligence, semiconductors, energy, and manufacturing.

Arms Trade: Global power players

The U.S. is the world's top arms exporter and a leading supplier to Gulf countries.

Qatar and Saudi Arabia each accounted for 6.8 percent of the world's total arms imports for 2020-24, making them the third and fourth largest importers globally.

The UAE ranks as the 11th largest importer of arms, accounting for 2.6 percent of global imports for the same period.

Saudi Arabia is the primary recipient of US arms, accounting for 74 percent of its imports in the 2020-24 period, according to the Stockholm International Peace Research Institute (SIPRI).

Trump is set to offer Saudi Arabia an arms package worth over $100 billion during his trip, as reported by Reuters. It remains unclear how these allocations will be split among the countries.

In the 2020-24 period, the US was the top supplier of arms to Qatar, accounting for 48 percent of its imports. The US Department of State approved a weapons package valued at $2 billion for Qatar in March, including long-range maritime surveillance drones and hundreds of missiles and bombs.

During the same period, the US was also the top supplier of arms to the UAE, accounting for 42 percent of the country's arms imports.

The upcoming three-day visit by President Trump to the Middle East, starting in Saudi Arabia on May 2nd, intends to focus on business and economy, with the aim of securing lucrative investment opportunities and striking economic accords.
Some analysts suggest that President Trump may persuade Gulf states to scale back oil prices as part of the trade talks during his Middle East trip, which also involves visits to Qatar and the United Arab Emirates.
The Trump administration is reportedly discussing expediting investments from Saudi Arabia, Qatar, and the UAE, with the President aiming to secure trillions of dollars in commercial deals and arms sales during his three-nation tour.