U.S.-Saudi Investments in 2025
U.S. President Donald Trump visited Saudi Arabia. During this visit, the U.S. and Saudi Arabia signed the largest defense cooperation agreement in U.S. history, worth $142 billion. The focus of the visit was on encouraging economic ties rather than security issues, reflecting a shift in priorities.
Investment Commitments
Saudi Arabia committed to investing $600 billion in the U.S.
Of this, $300 billion worth of deals were signed during the U.S.-Saudi Investment Forum in Riyadh.
Plans to scale up the investment to $1 trillion in a second phase.
This investment is part of Saudi Arabia’s broader strategy to diversify its economy beyond oil.
Defence Agreements
The U.S. agreed to sell Saudi Arabia an extensive arms package. The deal includes purchases from over a dozen U.S. defense firms in areas such as:
- Air and missile defense
- Air force and space technology
- Maritime security
- Communications systems
Discussions also took place on Saudi Arabia’s potential acquisition of Lockheed Martin’s F-35 fighter jets, though not confirmed in the final deal.
Vision 2030 and Economic Diversification
Saudi Arabia’s Vision 2030 aims to transform the kingdom’s economy. This includes ambitious projects, such as NEOM, a futuristic city that is planned to be as large as Belgium. The economic diversification efforts are crucial as oil revenue accounted for 62% of government income last year. The kingdom is working to reduce its reliance on oil, especially in light of fluctuating prices and rising costs.
Regional Dynamics
Trump’s visit occurred amid complex geopolitical tensions in the Middle East. The U.S. has maintained strong ties with Saudi Arabia, rooted in an agreement where the kingdom supplies oil in exchange for security. However, relations have been strained due to past incidents, such as the Khashoggi killing. Trump’s current administration aims to boost these ties while addressing regional security concerns.
Israel and Middle East Peace Efforts
Notably, Trump did not include Israel in his itinerary, raising questions about its significance in U.S. foreign policy. Ongoing military operations in Gaza and Lebanon have complicated the peace process. The U.S. is also engaged in discussions with Iran regarding its nuclear programme. However, the prospects for a Palestinian state remain uncertain, impacting potential agreements with Saudi Arabia.
| Related | |
|---|---|
