The Trump/MBS Tap Dance

It's More Complicated Than You Think

Trump addressing the World Economic Forum today

Donald Trump just delivered spectacular proof of the truth in Shakespeare’s famous line about deception: “One may smile, and smile, and be a villain.”

This morning, he spoke via video to the well-heeled crew at the World Economic Forum in Davos, Switzerland, appearing to be fulsome about the Saudi Crown Prince, Mohammed Bin Salman. “He’s a fantastic guy,” he said. And then mentioned that he’s going to ask MBS to “round out” the $600 billion investment he promised yesterday on the phone to one trillion.

And then he blithely demanded that the Saudis and OPEC lower oil prices in order to end the Russia-Ukraine war…

“Saudi Arabia is f…..d” read one of the many astonished messages flooding into my WhatsApp.

Or is the picture more complicated?

My sources suggest that it is.

Even ahead of Trump’s lecture to the crowd at Davos, my phone was blowing up this morning around the news of the call, yesterday, in which MBS promised Trump $600 billion.

The Crown Prince during the 2018 G20 Summit

Most of the data suggests that Saudi Arabia cannot remotely afford that, as it pushes to wean itself away from an oil-dependent economy. On top of paying a projected minimum $1.3 trillion for Vision 2030, MBS needs to build the infrastructure to host the 2034 FIFA world cup.

In December, Saudi’s foreign reserves fell to $414 billion - less than the money he promised to Trump. If the reserves fall further there’s a risk Saudi Arabia will need to devalue its currency.

The Kingdom’s GDP is about $1 trillion. So in other words, if you take things at face value, MBS just pledged $600 billion over four years - which works out to $150 billion a year - in other words, 15 percent of the current Saudi GDP to invest in the US….

It hardly makes sense.

So, why did MBS make the phone call and promise to spend that amount? And it’s important to note HE made the call, not Trump.

Last night in his interview with Sean Hannity on Fox News, Trump explained the calculus behind choosing Saudi Arabia as the destination for his first state visit in 2017: money. The Saudis had promised to buy $450 billion of US products.

He told Hannity: “I don’t know if Saudi Arabia wanted to buy another $450 or $500 billion – we’ll up it for inflation – then I think I would probably go there,” he stated, discussing where he’ll visit this time.

So here’s the real reason that was clever:

My sources - and the data - show that though the Saudis promised $450 billion last time - most of it was never actually spent (helped because Covid made it logistically hard. And, OK, yes, I haven’t forgotten that $2 billion went to Jared Kushner…but the shortfall is still hundreds of billions. Erstwhile Secretary of State Mike Pompeo once even told a reporter that the figure the Saudis spent was actually $14 billion.)

Meanwhile MBS got all that he wanted out of Trump.

1. As I’ve written here, MBS got his cousin Mohammed Bin Nayef deposed, so he could become Crown Prince

2. He got to squeeze Qatar (as I reported in Kushner, Inc.)

3. He tortured his relatives in the Ritz Carlton until they swore financial allegiance to him, again per Kushner, Inc.

4. He got to whitewash the murder of Jamal Kashoggi

But what did Trump get in return? What Trump chiefly wanted along with the money was the normalization of Saudi/Israel relations - and that didn’t happen.

We all know that Trump abhors nothing so much as being taken advantage of. In Kushner, Inc. I reported that Trump got testy with MBS during the crown prince’s visit here in 2018. Because he wanted the Saudis to spend more in the US…and they didn’t.

So, now, beneath the superficial flattery going both ways, it’s IOU time. MBS knows that Trump doesn’t forget IOUs. Which is one reason he quickly got on the phone and upped the figure from $500 to $600 billion - even, if like last time, he hopes he will not actually have to spend anything like that. (You’ll note it was the Saudis who put out the figure, initially, not the White House).

But another reason MBS wanted to be proactive, has to do with the what was discussed on the second phone call MBS had yesterday with the Trump Administration - this one with Secretary of State Marco Rubio. (It’s a tell that MBS was even on the phone to Rubio, having just spoken to Trump. In Trump 1.0 he negotiated with Trump and/or Kushner, not with the officials.)

But MBS is in a real pickle in terms of security in his region. He needs leverage.

Yesterday, Trump designated the Yemen Houthis a terrorist group. My sources say he’s ready to “bomb the shit out of them” in order to help Israel.

MBS is worried that the Houthis - and Iran - with whom he has reached a detente - could retaliate by resuming hostilities with Saudi Arabia on the border.

Further, MBS has got a real problem vis-à-vis normalizing relations with Israel and signing up to the Abraham Accords.

He knows Trump expects him to do it. (Trump mentioned it again in the Hannity interview.)

But, he also knows that it would risk his domestic and regional legitimacy, and possibly even his life.

My sources believe that’s why he chose deliberate phrasing and timing when he accused Israel of “collective genocide” in Gaza for the first time in November - just after Trump was elected. It was by far his strongest statement on the war.

And, if you read the State Department readout about the Rubio/MBS call, Rubio says on their call he discussed the threat of “Iran and its proxies.”

Nowhere in the Saudi statement about the call does it mention any discussion of the threat of “Iran and its proxies.”

So, don’t be fooled by the unctuous adjectives and smiles and enormous sums of billions being thrown around.

What’s really going on here is tense and difficult and involves the perception by Trump that it’s time for “payback,” and MBS’s need for leverage for security reasons.

Many people believe MBS got the upper hand last go around.

Surely, Trump isn’t going to let that be the last word.