Trump’s Middle East investment blitz faces harsh economic reality

Despite the splashy headlines, oil prices, borrowing limits and domestic priorities may keep Gulf investment promises from becoming reality

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For his first major foreign trip of his second term, U.S. President Donald Trump chose the oil-rich Gulf states—Saudi Arabia, Qatar and the United Arab Emirates. But rather than focusing on diplomacy or conflict resolution, the trip revolved around business. The White House claimed over US$2 trillion in investment agreements, positioning the tour as a major commercial success. But analysts are questioning how realistic these commitments are.

While Trump’s visit may seem distant to Canadians, the outcomes could ripple through global markets—shaping oil prices, defence alignments and investment flows that directly affect our economy. Yet Canada played no visible role. While Washington struck multi-billion-dollar agreements, Ottawa remained on the sidelines—a reminder of our diminished diplomatic and commercial influence in the region.

In Riyadh, the White House announced that Saudi Arabia agreed to invest US$600 billion in the U.S. across sectors like defence, technology and infrastructure. An additional 145 deals worth more than US$300 billion were reportedly signed at an adjacent investor conference. A nearly US$142 billion U.S.-Saudi arms package—Washington’s largest ever—was also unveiled, covering missile defence, aerospace, maritime security and communications. Prince Mohammad bin Salman later suggested the total package could reach US$1 trillion as more agreements are finalized.

In Qatar, Trump oversaw deals valued at US$243.5 billion, including a pledge to expand Qatari investment in the U.S. to US$1.2 trillion. He also announced a US$10 billion investment in a U.S. military facility in Qatar and a US$42 billion arms deal. Qatar Airways agreed to purchase 210 Boeing jets in a US$96 billion agreement described as the largest facilitated by Trump on the trip.

While in the UAE, Trump revealed over US$200 billion in commercial agreements, including a US$14.5 billion deal with Etihad Airways to purchase U.S.-made aircraft. The U.S. and UAE also committed to building the largest AI data centre outside America—about 26 square kilometres in Abu Dhabi with a five-gigawatt capacity.

On May 20, the White House further announced the UAE will invest US$1.4 trillion in the U.S. over the next decade, targeting advanced technologies. Qatar’s sovereign wealth fund also pledged to at least double its U.S. investments, building on a prior US$500 billion commitment.

Despite the bold figures, analysts remain skeptical.

Michael Hanna, U.S. program director at the International Crisis Group, told ABC News, “one of the things that has been a huge problem for Trump, traditionally, is implementation and follow-through.”

Cathrin Schaer, writing for Deutsche Welle, points to a more fundamental challenge: oil prices. These countries rely heavily on oil revenues, and with prices around US$65 a barrel—well below the US$91 the IMF says Saudi Arabia needs to balance its 2025 budget—there’s a growing fiscal squeeze. For oil-exporting nations like Canada, this pressure is familiar, as lower prices limit public spending and economic growth.

Meanwhile, Gulf states are expected to finance costly regional initiatives, from rebuilding Gaza to supporting Lebanon and Egypt, while simultaneously bankrolling domestic mega-projects like Saudi Arabia’s Vision 2030.

Tim Callen, visiting fellow at the Arab Gulf States Institute in Washington, told Schaer, “Without the current account surplus, there are no new funds to invest unless you borrow. If the Saudis want to invest in new ventures, they’re either going to have to borrow in global capital markets or they’ll have to reallocate existing investments.” He added, “it’s even less likely that these promises can be met.”

Callen estimates that Saudi Arabia would need to invest US$150 billion per year—about 12 per cent of its GDP—to meet the announced U.S. commitments. “That’s just unrealistically huge,” he concluded. For the UAE, a similar level of investment would exceed a quarter of its annual income. “That’s not viable,” said Neil Quilliam of Chatham House.

This trip also reflects a strategic shift in U.S. foreign policy. Traditional diplomacy has been replaced with transactional deal-making—investment and arms sales over alliances and peacemaking. Tel Aviv was notably absent from the itinerary. There was no visible effort to push for Gulf–Israel normalization or address regional security or human rights concerns.

The deals are bold. But history and economic realities suggest many may never materialize. Without follow-through—and with falling oil revenues and mounting financial obligations—Trump’s “Middle East investment tour” may turn out to be more spectacle than substance.

Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.