Trump signs economic partnership agreement with Saudi Arabia

RIYADH - US President Donald Trump signed a strategic economic agreement with Saudi Arabia on May 13 as the oil power rolled out the red carpet for him at the

start of a tour of Gulf states

aimed at drumming up trillions of dollars in investments.

Mr Trump punched the air as he emerged from Air Force One to be greeted by Prince Mohammed Bin Salman, who later signed an agreement with the President which Saudi state television said covered energy, defence, mining and other areas.

The White House said Saudi Arabia was set to invest US$600 billion (S$783 billion) in the United States, including the largest defence agreement between the allies, worth nearly US$142 billion.

“I really believe we like each other a lot,” Mr Trump said during a meeting in Riyadh with the crown prince, Saudi Arabia’s de facto ruler.

Mr Trump, who is accompanied by a host of American business leaders, including billionaire Elon Musk, will go from Riyadh to Qatar on May 14 and the United Arab Emirates (UAE) on May 15.

He has not scheduled a stop in Israel, a decision that has raised questions about where the close ally stands in Washington’s priorities, and the focus of the trip is on investment rather than security matters in the Middle East.

“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 said as he opened a Saudi-US 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 Mr Trump’s arrival.

In a meeting at the Royal Court, Mr 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.

Mr Trump recalled travelling to the kingdom in 2017 and said Saudi investment would help create jobs in the US.

He said jokingly that a US$600 billion investment pledge by Saudi Arabia could be US$1 trillion, repeating a figure he has cited before as he seeks investment from an important strategic partner.

Big investments

Attendees at the investment forum hosted by Riyadh included Mr Larry Fink, chief executive of BlackRock, Blackstone’s CEO Stephen Schwarzman and US Treasury Secretary Scott Bessent.

Mr Musk, the Tesla and SpaceX chief, chatted briefly with both Mr Trump and the crown prince, who is otherwise known as MbS, during a palace reception for the US President. And joining Mr Trump for lunch with the crown prince were Mr Musk and OpenAI CEO Sam Altman.

Prince Mohammed has focused on diversifying the kingdom’s 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 per cent of Saudi government revenue in 2024.

“About a billion dollars of investment is being made in frontier technologies and obviously it is no surprise that the lion’s share of these investments has gone into US companies,” Neom deputy CEO Rayan Fayez told the forum.

The kingdom has scaled back some of its ambitions, however, amid rising costs and falling oil prices.

Saudi Arabia and the US have maintained strong ties for decades based on an ironclad arrangement in which the kingdom delivers oil and the superpower provides security in exchange.

Prince Mohammed’s ties with Mr Trump have been smoother than with his predecessor, Mr Joe Biden. Their relations were strained by the 2018 killing of Saudi commentator Jamal Khashoggi by Riyadh’s agents in the Saudi consulate in Istanbul. US intelligence believed the killing was ordered by Prince Mohammed. He denied involvement.

Although Mr Trump has not included Israel on his schedule, he wants Israeli Prime Minister Benjamin Netanyahu to agree to a new ceasefire deal in the Gaza war.

Israeli officials have put a brave face on Mr Trump’s decision not to visit, but there are

growing doubts in Israel about its position

in his priorities as frustration mounts in Washington over the failure to end the war.

However, 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 Mr Trump more leverage by weakening Tehran and its regional allies.

US and Iranian negotiators met in Oman at the weekend to discuss a potential deal to curb Tehran’s nuclear programme. Mr Trump has threatened military action against Iran if diplomacy fails.

Mr Trump is expected to offer Saudi Arabia, Iran’s regional rival, an arms package worth more than US$100 billion, sources told Reuters. This could include a range of advanced weapons.

Mr Trump’s Middle East envoy, Mr Steve Witkoff, said last week he expected progress imminently on expanding accords brokered by Mr Trump in his first term under which Arab states including the UAE, Bahrain and Morocco recognised Israel.

But opposition by Mr Netanyahu to a permanent stop to the war in Gaza or to the creation of a Palestinian state makes progress on similar talks with Riyadh unlikely, sources told Reuters. REUTERS