U.S. Saudi Trade
U.S. Saudi Trade
Donald Trump appears to be reluctant to investigate the murder of Jamal Khashoggibecause of an alleged trade deal?
Donald Trump has said US investigators are looking into how Jamal Khashoggi vanished at the Saudi consulate in Istanbul, but made clear that whatever the outcome, the US would not forgo lucrative arms deals with Riyadh. The president’s announcement raised concerns of a cover-up of evidence implicating Saudi Arabia’s powerful crown prince, Mohammed bin Salman, in plans to silence the dissident journalist…Any sense that the administration might seek to impose serious consequences on Saudi Arabia was dispelled by the president. Asked at an impromptu press conference in the Oval Office whether the US would cut arms sales if the Saudi government was found to be responsible for Khashoggi’s disappearance, the president demurred, saying the US could lose its share of the huge Saudi arms market to Russia or China. In the Oval Office Trump pointed out that the disappearance took place in Turkey and that Khashoggi was not a US citizen.
He may not be a citizen but he did hold a green card and worked for the Washington Post. Credit to the Republicans in Congress for pressing on the appropriate investigation of this matter. My only comment today will be to challenge Trump’s argument that our trade with Saudi Arabia is more important than sanctioning the Saudi government for this murder likely ordered by Mohammed bin Salman. The Census Bureau reports on both our imports from Saudi Arabia and our exports to them. Over the last decade, imports have varied from less than $17 billion per year to over $55 billion. These imports are predominantly been oil of course. Exports have never reached $20 billion per year so we have run persistent and sometimes large deficits with the Saudis. In Trumpian “logic” – aren’t we losing to them? To be fair, we choose to import Saudi oil but then again, the kingdom is not the only supplier of this commodity. But Trump is telling us that we may have yuuuge exports of military goods:
I know they’re [Senators] talking about different kinds of sanctions, but they’re [Saudi Arabia] spending $110 billion on military equipment and on things that create jobs, like jobs and others for this country. I don’t like the concept of stopping an investment of $110 billion into the United States.
Of course this figure is considered “fake”. Maybe the Saudis will purchase more military goods in the future than they have in the past. But as the Census Bureau notes, their 2017 purchases were a mere $2 billion whereas the Saudis purchased over $2.7 billion in civilian aircraft and $1.6 billion in automobiles. I’m sure Boeing, Ford, and GM enjoy exporting their products wherever they can but these amounts are indeed peanuts compared to the world market for automobiles and airplanes.
Barkley Rosser adds in comments at Econospeak:
A further point on this is that s non-trivial chunk of what was announced as part of this when Trump was in KSA sword dancing with the royals were deals already in the works (if not finalized) from the Obama era (he who cannot be named in the Trump White House), and another large chunk were/are highly speculative to imaginary. It is unclear how much of that supposed $115 billion was actually new likely purchases, but most reports I have seen do not have it exceeding $20 billion, with that likely to happen over a long period of time, to the extent any of it does.
Also, quite a few observers have noted that traditionally it was not the US begging KSA to buy our military equipment but them begging the US to let them buy our equipment, with this new event possibly pushing the situation back more to its traditional nature.
The perverted morals of the entire neoliberal West was on full display here. Th Saudis were engaging in full genocide against Yemen with their trade blockade, and slaughtering countless innocent civilians with US-made bombs without any western “leader” other than Jeremy Corbyn condemning them. Yet let them kill ONE professional class individual and they all go nuts.
And people wonder why the neoliberal order is coming crashing down all over the world.
Here is some explanation of US State Department’s authorizing process for military exports.
Trump’s $110B is authority for DoD and commerce to “negotiate” arms deals.
KSA is often the big single receiver year by year.
Here isa recap of “sales”.
disclaimer: I did not check any of the data.
Ilsm may not have checked that data but I found it interesting. Total arm’s sales per year = $31 billion. The U.S. share? Less than $10 billion. This is sales to all nations. So how did Trump get 11 times that for the Saudis alone? Oh yea – he lied.
BTW – that $31 billion represents major weapons only. Census reports U.S. exports of all military equipment which has been near $20 billion per year for the past 4 years. Of that the Saudis purchased less than 10% of that total.
IIRC the Kingdom of Saudi Arabia (KSA) is consistently the largest single buyer of US arms exports.
I think sales booked for F-35 (as with THAAD and Aegis Ashore) are understated; to get the countries to buy we gave them an amount of production technology to do a lot of the work in country, and US does not recoup (required by law but automatically waived by congress) any of the R&D in the export pricing.
Reading the “defensenews” link explains that the $110B Trump spoke about is a State Department “authorization” for KSA buyers aka weapons acquisition planners to begin the process with US DoD offices, usually in the service offices that manage the weapon in the US military force, to create a “foreign military sale” (FMS).
Security assistance management (SAM) is big business in the pentagon and each service has SAM structures to go about setting up a FMS “case”.
“Case” becomes an “acquisition” when the powers at DoD and Commerce Dept. approve a Letter of Offer and Acceptance LOA. That is the agreement from which guys like me contract for the US government to buy arms and the output of the contract is delivered and sold to the KSA or Korea or so forth.
The Smaller billions totaled per year in al Jazeera are mainly actual deliveries like US would book for GDP.
I spent a very small part of my career managing an FMS contract or two.
On al Jazeera I did not go to their references as I expected they are accurate.
Well Census does not that the Saudis purchased 10% of our military equipment exports which is a large share. My only point is that $2 billion a year is not $110 billion a year. Now if the Saudis intend to purchase $1 billion a year for the next decade – this is a disturbing development that we need to stop.
is part of the arms deal targeting civilian buses? they just hit the 3rd bus in two months:
“At least 17 people were killed and 20 injured in a Saudi-led airstrike on Yemen’s Hodeida on Saturday” .”The final toll is not determined yet because body parts of many victims are mixed with each other,” said spokesman for the rebel-controlled Health Ministry …
the US is providing in-air refueling on these bombing runs…how much blood money are we collecting for that service?
The money is so good there is no bi-partisan or media outrage!
From the amount of support the Saudis use, I assume the main facility of Saudi bombing is guidance kits that connect the airplane flight management electronics to the bomb, controlling the weapon through release and flight to the target, a segment or two of the technically complex “kill chain”.
Given that the aircraft are US supplied I presume the airplane side and the bomb side, usually a kit of: guidance, fuse and fins, are US supplied.
So yes the Saudis and Emiris could not hit anything of tactical or war crime “value” with out US supplies!
The iron bomb “case” with the explosive is probably sold by the US and US technicians may be installing guidance kits on the bomb cases……
Maintenance [and repair] of the planes and kits is likely done by US
‘services’ contractors in place. Nice money and you can drink in the compound if not caught bringing the stuff in.
Knocking off a journalist is a trivial pittance compared the thousands of dead in Yemen; that should cut Saudi royals off US support.