SAUDI ARABIA
TRUMP: “After my heavily negotiated trip to Saudi Arabia last year, the Kingdom agreed to spend and invest $450 billion in the United States. This is a record amount of money. It will create hundreds of thousands of jobs, tremendous economic development, and much additional wealth for the United States. Of the $450 billion, $110 billion will be spent on the purchase of military equipment from Boeing, Lockheed Martin, Raytheon and many other great U.S. defense contractors. If we foolishly cancel these contracts, Russia and China would be the enormous beneficiaries — and very happy to acquire all of this newfound business.” — statement Tuesday.
THE FACTS: He’s greatly overstating the value of expected Saudi investments in the U.S.
The arms package, partly negotiated under the Obama administration, mixes old deals, some new business and prospective purchases that have not been worked out.
The Pentagon said last month that Saudi Arabia had signed “letters of offer and acceptance” for only $14.5 billion in military purchases and confirmed Tuesday that nothing further has reached that stage.
Those letters, issued after the U.S. government approves a proposed arms sale, specify its terms. Much of that $14.5 billion involves a missile defense system, a contract that appears to have advanced more than other significant investments but not been completed.
Moreover, the State Department estimated last year that if the full $110 billion in prospective arms business is fulfilled, it could end up “potentially supporting tens of thousands of new jobs in the United States.” That’s a far cry from the 500,000 to 600,000 jobs that Trump has said the arms deal is worth.
Details of the package have been sketchy, with no public breakdown of exactly what was being offered for sale and for how much. The government’s Congressional Research Service has described the package as a combination of sales that were proposed by President Barack Obama and discussed with Congress and new sales still being developed.
Meanwhile, there has been no verification from either country that “the Kingdom agreed to spend and invest $450 billion in the United States,” as Trump put it in his statement. White House spokeswoman Lindsay Walters did not respond to a request to explain the figure.
TRUMP: “Oil prices getting lower. Great! Like a big Tax Cut for America and the World. Enjoy! $54, was just $82. Thank you to Saudi Arabia, but let’s go lower!” — tweet Wednesday.
THE FACTS: Merely thanking Saudi Arabia for lower oil prices is a gross oversimplification. Oil prices, which peaked Oct. 3, have been falling on the realization that U.S. sanctions against Iran would not create a shortage and on fear that slower economic growth internationally will depress energy demand.
Although the U.S. is now the world’s biggest oil producer, Saudi Arabia remains the biggest exporter, and as a so-called swing producer with the ability to adjust production up or down relatively quickly, it can indeed influence the price of crude. But the market is far more complex than Trump suggests. Canada is actually the leading source of U.S. oil imports, for example, with Saudi Arabia second.
TRUMP: “Saudi Arabia would gladly withdraw from Yemen if the Iranians would agree to leave. They would immediately provide desperately needed humanitarian assistance.” — statement Tuesday.
THE FACTS: This seemingly benign view of Saudi intentions in Yemen does not square with reality on the ground. A Saudi-led blockade is at least partly responsible for widespread starvation in a country where three quarters of the population needs life-saving assistance. It’s the world’s worst humanitarian crisis. The U.S. has scaled back support for the Saudi-led coalition fighting Iranianbacked rebels and is pressing for a cease-fire.
The international aid group Save the Children estimated Wednesday that 85,000 Yemeni children younger than 5 have died of hunger and disease since civil war broke out in 2015. The United Nations says more than 1.3 million Yemeni children have suffered from severe acute malnutrition since the coalition went to war against Houthi rebels.