US $1 trillion investment deal with Saudi Arabia could take several years

President Donald Trump loves deals, and few partners have been more willing or more powerful than Saudi Arabia.

This week, Saudi Arabia’s Crown Prince Mohammed bin Salman pledged to channel $1 trillion in investment from the oil-rich kingdom to the United States.

Trump welcomed the announcement as validation of his close ties with Riyadh and proof that international money is eager to return to the U.S. economy. Yet behind this impressive figure lies a familiar reality: Much of the promised investment exists only on paper, and experts warn that actual cash flows could take years to materialize.

President Donald Trump praised 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’s actually purchases such as planes, tanks and even computer chips,” said Simon Henderson, a senior fellow at the Washington Institute for Near East Policy. “And these numbers, $600 billion, trillion, who really knows how accurate they are, or over what time period?”

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“Maybe the real story is that Saudi finances are in bad shape,” added Henderson, an expert on the Gulf region and energy policy. “Oil prices are too low, they need around $100 a barrel, and extravagant spending on high-profile projects like The Line and NEOM is being curtailed.”

The Line is a 105-mile car-free city project and NEOM is a futuristic $500 billion 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 woes do not necessarily preclude large-scale investments over time.

“It is entirely possible that Saudi Arabia could invest $1 trillion in the United States over many years,” said EJ Antoni, chief economist at the Heritage Foundation, citing the kingdom’s vast oil wealth and long-term economic ambitions.

President Donald Trump and Saudi Crown Prince Mohammed bin Salman met in May during Trump’s first state visit of his second term. (Win McNamee/Getty Images)

Antoni stressed that much depends on how such an investment will ultimately take shape. So far, the White House has given few details on exactly where the Saudi funds are going or when they might arrive.

“What does this look like in practice? It could take a whole host of different forms,” ​​he said. “We don’t yet know if this is going to look like an investment in infrastructure and even if it does, in what sector?”

He cited petrochemicals as a possible solution, but said other sectors could also attract Saudi capital.

“In terms of beneficiaries, there is clearly the American taxpayer, who is going to benefit from a bigger economy,” Antoni continued. “It broadens the tax base and reduces the overall tax burden on each individual. So it’s very, very positive.”

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He added that while such deals can boost confidence and markets in the short term, their most significant benefits often play out over years, well beyond a single presidential term.

“Most of what President Donald Trump has done is accrue perks that won’t show up until after he leaves office,” Antoni told Fox News Digital.

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So far, the White House has given few details on exactly where the Saudi funds are going or when they might arrive. (Shawn Thew/EPA/Bloomberg/Getty Images)

“That’s not to say there aren’t initial gains, there clearly are. Every time another company announces more investment in the U.S., it helps support the stock market because stock prices are ultimately based on future earnings and those earnings increase when additional investment comes in.”

For now, the pledge reinforces Trump’s economic rhetoric, but also poses a long-term test for U.S.-Saudi relations, the true impact of which may not be clear for years.