President Donald Trump welcomed the Saudi investment during a bilateral meeting in the Oval Office on Tuesday. (Stefani Reynolds/Bloomberg via Getty Images)
"The term investment implies long-term capital, but in this case it really means purchases like aircraft, tanks, even computer chips," said Simon Henderson, a senior fellow at The Washington Institute for Near East Policy. "And those figures, $600 billion, a trillion, who really knows how accurate they are, or over what time frame?"
SAUDI ARABIA IS ALREADY AMERICA’S TOP ARMS BUYER AND NOW TRUMP WANTS TO ADD F-35S
"Perhaps the real story is that Saudi finances are in bad shape," added Henderson, who specializes in the Gulf region and energy policy. "Oil prices are too low, they need about $100 a barrel, and extravagant spending on prestige projects like The Line and NEOM are being scaled back."
The Line is a proposed 105-mile car-free city and NEOM is a $500 billion futuristic mega-development on the Red Sea. Both are part of the crown prince's "Vision 2030" plan to diversify the kingdom’s economy beyond oil.
Others note that Saudi Arabia’s short-term fiscal strains don’t necessarily preclude large-scale investments over time.
"It’s perfectly within the realm of possibilities that Saudi Arabia could make a $1 trillion investment into the United States over many years," explained E.J. Antoni, chief economist at the Heritage Foundation, citing the kingdom’s vast oil wealth and long-term economic ambitions.
For now, the White House has offered few details about what exactly the Saudi funds would be directed toward or when they might arrive. (Shawn Thew/EPA/Bloomberg/Getty Images)
"That’s not to say there are no initial gains, there clearly are. Every time another company announces more investment in the United States, it helps buoy the stock market, because equity prices are ultimately based on future earnings and those earnings rise when there’s additional investment coming."
For now, the pledge bolsters Trump’s economic narrative but also sets up a long-term test of U.S.–Saudi relations, one whose true impact may not be clear for years.
Amanda covers the intersection of business and geopolitics for Fox News Digital.
https://www.foxnews.com/politics/trumps-trillion-dollar-saudi-deal-could-reshape-markets-money-ever-materializes