Trump requests trillion dollar investment after $600bn offer from Saudi crown prince

U.S. President Donald Trump, speaking via video conference at the World Economic Forum in Davos, Switzerland on Thursday, stated that he saw reports in "newspapers" that Saudi Arabia planned to invest $600 billion in the U.S. economy, but he felt that was not enough.

Trump said, "I’m going to ask the Crown Prince, who is a great guy, to take that number up to about a trillion dollars. I think they’ll do it because we’ve been very good to them.”

In fact, the Saudi Press Agency announced the kingdom's $600 billion investment based on the royal interpretation of a call between Trump and Saudi Crown Prince Mohammed bin Salman on Wednesday. It was Trump’s first call with a foreign leader since he took office earlier this week. The Saudi Press Agency stated: “The Crown Prince confirmed the Kingdom’s intention to expand its investments and trade in the United States over the next four years, to the tune of $600 billion, with the possibility of exceeding that number.” The White House’s readout of the call did not mention such specifics.

The White House readout stated: “The two leaders discussed efforts to bring stability to the Middle East, strengthen regional security, and combat terrorism. They also discussed the Kingdom of Saudi Arabia’s international economic ambitions for the next four years, as well as trade and other opportunities to increase mutual prosperity for the United States and the Kingdom of Saudi Arabia.” In his remarks in Davos, Trump also said that he planned to ask Saudi Arabia to “lower oil prices,” which could lead to a breakthrough to end Russia’s war in Ukraine, as the war has had a devastating impact on energy markets.

Trump said, "You have to bring down the price of oil, and frankly, I'm surprised they didn't do it before the election. They didn't show much love by not doing that. I'm a little surprised by that. If the price goes down, the war between Russia and Ukraine ends immediately. Right now, the price is high enough to keep that war going.” He stated that the Saudi kingdom was “actually responsible in some ways for what’s happening. Millions of lives are being lost.”

What Trump did not take into account is that Saudi Arabia needs to complete mega-projects like Neom, which is the cornerstone of Crown Prince Mohammed bin Salman’s efforts to wean the kingdom’s economy off its reliance on oil revenues. Until that goal is achieved, the Saudi kingdom needs oil dollars to complete projects like Neom. The International Monetary Fund estimates that Saudi Arabia needs an oil price of $96 a barrel to balance its budget, which is about $24 lower than the current price.

In his remarks, Trump stated that with oil prices coming down, he would also “ask for interest rates to go down immediately, and likewise, they should be going down all over the world. Interest rates should be following us.” In 2017, during his first term, Trump’s first foreign trip was to Saudi Arabia. The most memorable part of that visit was the president participating in a traditional Saudi sword dance.

On Monday, Trump said he might make Saudi Arabia his first overseas visit again, but only if the price was right. “The last time I did it with Saudi Arabia because they agreed to buy $450 billion worth of our products. I said I’ll go, but you have to buy American products, and they agreed to do that,” he added that he “would go there again” if the Saudi kingdom agreed to buy more products. “Well, I don’t know. If Saudi Arabia wants to buy another 450 or 500 billion, we’ll raise the price for inflation. I think I might go there.”

Neither the administration nor the Saudi kingdom have said where the upcoming Saudi investment in the U.S. will go, but the Crown Prince made a multi-week visit to the U.S. in March 2018, which led to substantial investments in almost every major tech company, including ride-hailing apps like Uber and Lyft.