Saudi Crown Prince Mohammed bin Salman's announcement of the kingdom's intention to boost its investments and trade relations in the United States over the next four years to an impressive $600 billion marks the culmination of nearly a century of close relations between these two global powerhouses. This enduring partnership is rooted in political alliances, mutual investments, and extensive economic interests.
The strategic relationship between Riyadh and Washington traces its origins back to the discovery of oil in Saudi Arabia in 1933, a milestone not only in the history of the two nations but also in the global economy. Oil, thanks to this Saudi-American partnership, became the linchpin of modern life. A defining moment in this relationship was the historic meeting between King Abdulaziz Al-Saud and US President Franklin Roosevelt in 1945 aboard the destroyer USS Quincy. This iconic meeting, one of the most significant post-World War II, laid the groundwork for a deep and enduring relationship that continues to thrive to this day.
The next significant development occurred in 1974 when Prince Fahd bin Abdulaziz, who later became king, established the United States-Saudi Arabian Joint Commission. This landmark framework agreement aimed at bolstering economic and commercial activity between the two nations materialized during his visit to the United States. Prince Fahd's meeting with Secretary of State Henry Kissinger culminated in an economic agreement focusing on cooperation in manufacturing, education, technology, and agricultural development.
Further strengthening this alliance, the inaugural meeting of the United States-Saudi Arabian Joint Commission occurred during President Nixon's 1974 visit to the Kingdom of Saudi Arabia, reaffirming the profound economic and investment ties between the two countries.
Fast forward to the present, the third phase is spearheaded by Saudi Crown Prince Mohammed bin Salman. He has unveiled ambitious investment plans following a conversation with US President Donald Trump after his inauguration. The crown prince articulated the kingdom's intent to expand its investments and trade ties in the United States to the remarkable sum of $600 billion over the coming years. These planned investments continue the economic and trade partnerships initiated during President Trump's first term in 2017, offering opportunities in promising sectors that directly impact the transfer and localization of technology, job creation, and capitalizing on Saudi Arabia's rapid economic growth as one of the fastest-growing economies among the G20 countries.
The crown prince's announcement aligns with SoftBank's declaration -- an entity in which the kingdom holds shares -- to allocate $500 billion in artificial intelligence investments. Over the next four years, Saudi investments in the United States seek to yield significant benefits through joint cooperation, particularly in key areas such as military industries, space exploration, artificial intelligence development, and nuclear energy advancement.
The United States is far from an ordinary partner; it stands as one of the kingdom's paramount economic allies and a favored destination for Saudi investment. This is evident in the increase of Saudi holdings in US Treasury bonds to $140.3 billion in June 2024. The US ranks second in Saudi exports and first in imports, while Saudi Arabia remains the US's largest trading partner in the Middle East, with a trade balance surplus in Riyadh's favor over the past decade. More than 500 American companies invest in the kingdom, and joint US-Saudi projects number 609, boasting an investment value of approximately $62 billion.
Today, the concerted efforts of Saudi Crown Prince Mohammed bin Salman to strengthen Saudi-American relations and realign them economically, politically, and security-wise result in a series of agreements and investments promising economic integration, industry localization, and maximized returns for both nations.
Marked by considerable harmony, Saudi-American relations have persisted for over 90 years, beginning with an American investment in a Saudi oil well and culminating in ambitious Saudi investments worth $600 billion. Throughout this period, both countries and their well-established institutions have been diligent in maintaining a robust connection that has not only benefited them but also contributed to ensuring secure energy supplies, stabilizing the global economy, and fostering security and development in the Middle East and beyond. -- Mohammed Al-Saeed (translated by Asaf Zilberfarb)