Northwest Arkansas Democrat-Gazette
Arms agreement signed
Saudis also commit funds for U.S. projects
The first day of President Donald Trump’s inaugural trip abroad yielded a bonanza of agreements, including a $110 billion arms deal with Saudi Arabia aimed at bolstering Saudi security.
“Tremendous investments,” Trump said Saturday as he headed into a meeting with Saudi Crown Prince Mohammed bin Nayef. “Hundreds of billions of dollars of investments into the United States and jobs, jobs, jobs.”
Commerce Secretary Wilbur Ross, interviewed in the Saudi capital, Riyadh, said, “I can’t imagine another business day that’s been as good for the United States or for the kingdom.” And National Economic Council Director Gary Cohn, when asked earlier by reporters about what deals would be agreed to, said, “a lot of money, big dollars.”
At one point, senior adviser Jared Kushner, Trump’s son-in-law, was seen high-fiving national security adviser H.R. McMaster. Trump’s entourage also included Secretary of State Rex Tillerson;
chief strategist Stephen Bannon; and daughter Ivanka Trump, who will meet today with Saudi women’s groups.
The most tangible agreement was the $110 billion sale of military equipment to Saudi Arabia, which is effective immediately and could expand to $350 billion over 10 years. The deal includes tanks, combat ships, missile-defense systems, radar and communications, and cybersecurity technology.
The White House said the agreement is the largest single arms deal in U.S. history.
While initial details were scant, the signed agreements included a U.S. letter of intent to “support Saudi Arabia’s defense needs” with sales of a number of items, such as the ships and tanks, that were the subject of agreements under earlier administrations, as well as some new items that had never passed the discussion stage, such as sophisticated Terminal High Altitude Area Defense missile systems.
Other items are intended to modernize Saudi Arabia’s cyberdefense and its airborne intelligence-gathering, and to secure its borders.
The deal for defense equipment and services is designed to bolster Saudi Arabia as it counters threats from nearby Iran and fights terrorism, while reducing the burden on the U.S. military.
Altogether, the package would support “tens of thousands of new jobs in the U.S. defense industry,” the White House said in a statement. Boosting manufacturing employment is a major policy goal of the Trump administration.
Trump and Saudi King Salman signed the agreement in a ceremony late Saturday after lunch and a series of meetings on the president’s first day in Riyadh.
Human Rights Watch urged Trump not to accept the arms deal, saying actions by the Saudi-led coalition, militarily supported by the
United States, in the war in Yemen have led to “serious violations of the laws of war.”
“Coalition aircraft have bombed crowded markets and funerals, maimed countless children, and attacked a boat filled with refugees, often using U.S.-made weapons in unlawful attacks,” said Andrea Prasow, deputy Washington director at Human Rights Watch. “Seven million people face starvation in Yemen. If the Trump administration wants to curtail U.S. support for abuses in the Muslim world, it should immediately end arms sales to Saudi Arabia and demand credible investigations of alleged laws-of-war violations.”
BUSINESS DEALS
In addition to the security agreements, Saudi Foreign Minister Adel al-Jubeir said, U.S. business leaders at an economic forum designed to coincide with Trump’s visit signed deals potentially worth more than $200 billion over the next 10 years.
General Electric Co. secured $15 billion in deals to provide technical support across different sectors of the kingdom, including the oil and gas industry. Lockheed Martin Corp., with Chief Executive Officer Marillyn Hewson on hand, has announced, among other deals, a $6 billion commitment to the assembly of 150 S-70 Black Hawk helicopters in Saudi
Arabia. And Saudi Arabian Oil Co. Chief Executive Officer Amin Nasser said the kingdom would enter into deals with the U.S. valued at about $50 billion.
Al-Jubeir also praised Exxon Mobil, the energy behemoth that Tillerson ran until retiring to join the administration, as “the largest investor” in Saudi Arabia.
Also on Saturday, the New York-based Blackstone investment firm and the Public Investment Fund of Saudi Arabia signed a memo of understanding for a new vehicle to invest in U.S. infrastructure assets. Stephen Schwarzman, Blackstone’s chairman and chief executive, is close to Trump and leads the White House’s economic advisory council of CEOs.
Blackstone said Saturday that Saudi Arabia’s sovereign wealth fund had committed $20 billion to a new investment fund aimed at infrastructure projects, primarily in the United States.
The commitment is about half of the capital Blackstone plans to raise for the fund. All told, including potential borrowed money, the new fund could invest more than $100 billion in infrastructure projects, the company said in a statement.
Blackstone said it began discussions with Saudi Arabia about a year ago. The U.S. investment company said it has already invested in over $40 billion worth of projects tied to infrastructure over the past 15 years.
Investing in U.S. infrastructure has been advocated by lawmakers and business leaders for some time, with both Trump and former Democratic presidential candidate Hillary Clinton endorsing the modernization of aging airports, bridges and energy systems through public-private partnerships.
Yasir Al Rumayyan, the managing director of Saudi Arabia’s Public Investment Fund, added: “This potential investment reflects our positive views around the ambitious infrastructure initiatives being undertaken in the United States as announced by President Trump, and the
strategic opportunity for the Public Investment Fund to achieve long-term returns given historical investment shortfalls.”
For Saudi Arabia, the new fund is yet another step toward diversifying its oilbased economy. The kingdom has already announced what it calls its Vision 2030 plan, under which the country has prepared to list its stateowned oil producer, Saudi Aramco, on the public markets.
Getting U.S. companies more involved with Saudi Arabian economic diversification “ends up creating jobs in the kingdom and also back in the United States,” said Khush Choksy, a senior vice president at the U.S. Chamber of Commerce.
Trump selected Saudi Arabia for the first leg of his journey after being told that the kingdom would make significant investments in the U.S., including the purchases of hundreds of billions of dollars’ worth of military equipment in the next decade and $40 billion from its sovereign wealth fund, a White House official said.