The initial key international journey undertaken by Donald Trump, which interestingly bypassed the traditional allegiances of Europe and Japan, was to the leaders of the Middle Eastern region, ostensibly known for their authoritarian rule. The principal motivation for this choice was to challenge China’s increasingly prominent economic presence in this region, characterized by abundant oil reserves and strategic geopolitical significance. Trump’s ambition wasn’t only to reestablish the US’ stronghold as a predominant external economic and political force in the Middle East, but to eclipse China’s emerging influence.
In a somewhat controversial move, Trump attended the US-Saudi Investment Forum, accompanied by backers, high-tech business leaders, and billionaires eager for Gulf partnerships. This decision followed his controversial move to lift recent restrictions on exporting advanced semiconductor chips to the region, essentially privileging economic interests over potential security concerns.
Trump’s articulation of his objective was peculiar, emphasizing a desire to promote ‘commerce, not chaos.’ His strategy appeared to revolve around steering economic cooperation in a direction that would concretely benefit the US. His ultimate goal seemed to be creating opportunities to attract more high-tech manufacturing investments to home ground.
His prioritized agenda was to convince the Gulf monarchies to partner with the US, rather than China, in building a forward-looking technology infrastructure, specifically in the field of artificial intelligence (AI). This move held significance in facilitating their planned transition from a hydrocarbon-dependent economy. However, many critics call this approach short-sighted and rather self-serving.
Unexpectedly, Trump refrained from pressuring Saudi Arabia to normalize relations with Israel, implying an intent to negotiate for a nuclear power plant. This negotiation would only fuel concerns about nuclear proliferation and disregard the longstanding principles at the heart of the US-Israel relationship.
China’s deepening economic and security connections with the Gulf states could be seen as a concern for Trump’s administration. Over the past decade and a half, China has transformed from a relatively minor presence to the key taker of the Gulf’s abundant supply of crude oil, effectively becoming its crucial trading and investment partner.
The Gulf Cooperation Council (GCC) hasn’t limited its relationship with China to trade alone. It’s gone beyond meeting half of China’s oil necessities to procuring weaponry such as ballistic missiles, drones, and counter-terrorism equipment. This strategic partnership has bolstered its negotiation power, drawing attention to the diminishing influence of the US.
The GCC is steadily increasing cooperation with China in numerous fields, from oil activities to manufacturing and infrastructure networks, under the umbrella of Beijing’s Belt and Road Initiative. The gravity-defying leap in the GCC-China relationship came when the Gulf nations joined the Shanghai Cooperation Organisation. This alliance, initiated by China and Russia as an alternative to the US in Eurasia, demonstrates a considerable geopolitical shift.
One significantly divergent move was the Gulf countries’ discussion about conducting trade in Chinese currency. The idea of pricing some oil sales to China in yuan endangers the dollar as the default currency for international oil markets and its steady role as a globally held reserve currency.
While Trump’s tariff wars may not directly impinge upon the Gulf due to oil exports’ exemptions, they could have debilitating indirect impacts. Expectations are that the tariffs on China’s exports to the US would dampen business, trade, and the demand for oil, the Gulf’s primary export, painting a grim picture for their economy.
Interestingly, Trump seized the opportunity to gloat about allegedly concluding the largest defense deal history has seen. With Saudi Arabia committing to a colossal $142 billion arms purchase, the gesture seems more of a flex than a diplomatic triumph. The announcement included the Saudis’ ambitious plans for nuclear power, which cleverly deflects away from the potentially hazardous implications.
Trump’s accomplishments also seem to include a staggering $96 billion order from Qatar Airways for 160 Boeing Jets. This record-breaking order may look impressive on paper, but it turns an unintentional eye towards the well-being of local industries.
Amongst his apparent triumphs, Trump shared plans to invest $10 billion in the expansion of US’ Al Udeid military base in Qatar. While this assures strengthening of the US military presence in the region, it seems a high price to pay, especially considering the lack of reciprocal commitment from the Gulf allies.
In an intriguing turn of events, Trump emphasized his desire to negotiate with Iran over its nuclear programme. While Iran expressed their willingness to halt enrichment above the levels used for nuclear weapons, questions around what this means for international stability and regional domination remain unanswered.