The Bahraini Economy Might Benefit From Trump’s Tariffs
Bahrain’s free trade agreement with the United States might give Manama a golden opportunity to attract foreign capital and produce a diverse range of merchandise exports.
The U.S. president didn't return from the region with a long checklist of accomplishments, but he didn't go with a checklist of ambitions.
Help AGSIW highlight youth voices in the Gulf.
DonatePresident Joseph R. Biden Jr.’s Middle East trip was harshly criticized in advance from many quarters and perspectives. Now that it’s completed, most commentary in Washington – and in the Middle East – has judged it underwhelming at best, demanding a list of his accomplishments. Yet this may reflect a misreading of not just what the president hoped to achieve but also what was realistically possible under current circumstances. Given the multilateral and regional agenda Biden is pursuing, relative success and relative failure would look remarkably similar at this stage because it is such a delicate and perforce unstructured project.
In the Middle East, the Biden administration is trying to assemble a group of highly fractious and dysfunctional pro-American, and largely anti-Iranian, countries into a more coordinated and cooperative camp. Biden is hoping to transform this quarrelsome, traditionally pro-Washington bloc into a loose but potent coalition that can at least provide additional leverage against Iran regarding the stalemated nuclear talks and at best be the bedrock of a new regime of containment and deterrence against Tehran. The administration is also hoping that revived U.S. leadership in the Middle East can help slow the drift of many of Washington’s traditional friends toward greater strategic cooperation with China.
The most successful leg of the trip, for both guest and host, was Biden’s visit to Israel. There Biden reinforced the U.S. commitment to Israeli security, signing The Jerusalem U.S.-Israel Strategic Partnership Joint Declaration in which the two countries outlined their close cooperation. What was unique about Biden’s stay in Israel was the evident warmth of these personal and political relations. He was, to all appearances, happy and relaxed, in familiar surroundings and indulging in his career-defining backslapping and glad-handing political style. He was also seemingly happy to be meeting with interim Israeli Prime Minister Yair Lapid, the leader of Israel’s centrist political party, rather than former Prime Minister Naftali Bennett, who led a small, hard-right party. But especially, he was seemingly relieved not to be forced to spend much time with former Prime Minister Benjamin Netanyahu, though he paid him a courtesy visit given that Israel’s longest-serving prime minister may once again find himself in office following elections tentatively scheduled for the end of the year.
But the most significant aspect of Biden’s trip to Israel was the passage in the joint declaration that is the administration’s most explicit threat of the use of military force against Iran’s nuclear ambitions. It stresses Washington “is prepared to use all elements of its national power to ensure” Iran never acquires a nuclear weapon. Even though Biden insisted at a joint press conference with Lapid that “diplomacy is the best way to achieve this outcome,” the document was undoubtedly intended to reverberate from Israel across the Middle East to Gulf Arab countries and Iran itself. Regardless of whether the Iranian regime takes this threat seriously, if the statement was intended to reassure Gulf Arab countries about U.S. firmness regarding containing and countering Iran, it does not appear to have worked particularly well.
Biden’s next stop, to visit Palestinian President Mahmoud Abbas in Bethlehem, was, by contrast, the least effective part of his trip. He offered Palestinians good wishes, kind words, and $300 million for East Jerusalem hospitals but nothing substantial to advance their national
interests. Biden has said he believes Israeli-Palestinian diplomacy is the best way to achieve a two-state solution, which he continues to endorse. But he also insists that the time is “not ripe” for such talks. Indeed, much of what Biden did and said in Israel and the occupied Palestinian territories appears designed to throw support to Lapid and other non-Netanyahu forces in Israel in the run-up to the next election.
Biden and most Democratic leaders dislike Netanyahu intensely both personally and politically, and they regard him as a de facto adjunct of the wing of the Republican Party led by former President Donald J. Trump. So, the idea that they might be forced to deal intimately with Netanyahu again is unnerving. That gives Biden more reason not to pressure Lapid – who, as interim prime minister, could not deliver much anyway – on the Palestinians to avoid giving Netanyahu campaign fodder. Instead, the intent was to bolster the interim Israeli prime minister and make friendly noises toward the Palestinians but not issue any demands that would be beneficial to Netanyahu’s reelection campaign – a useful approach for Lapid’s prospects but an intense disappointment for the Palestinians and providing no diplomatic space for Saudi Arabia.
Most attention around the trip was focused on U.S.-Saudi relations, especially the personal interaction between Biden and Crown Prince Mohammed bin Salman. After much speculation, the greeting between them was a pandemic-appropriate fist bump, every bit as relevant as a handshake, and a bilateral policy meeting that reportedly went much longer than its allotted hour and a half. In comparison to the interactions in Israel, there was no particular personal warmth between Biden and Saudi leaders. But the real significance is that both were able to avoid the numerous things that might have gone wrong. There was, after all, serious potential for a disruptive misunderstanding, as occurred in the disastrous first meeting between then-Crown Prince Abdullah bin Abdulaziz and President George W. Bush in April 2002. It took three following years to patch things up, all in the shadow of the 9/11 attacks on the United States.
In this case, the murder of Saudi journalist Jamal Khashoggi was the primary wedge between the two leaders, especially since Biden authorized the release of a CIA finding that Mohammed bin Salman most likely authorized the mission that led to the killing. Turning the page on that painful chapter was difficult and awkward for both sides, and either Biden or Mohammed bin Salman could have easily found some reason to take offense. That they were able to move past their deep estrangement was an important step forward in U.S.-Saudi relations.
Despite the tensions over the Khashoggi murder since Biden took office, Saudi Arabia has been largely cooperating with the United States on multiple fronts, including eventually siding with Washington against Moscow at the United Nations over the Russian invasion of Ukraine and agreeing to maintain the monthslong truce in Yemen despite provocations by the Houthis. The biggest outstanding bilateral ask, therefore, during this trip involved oil production to contain the price of oil that spiked after Russia’s aggression against Ukraine. However, the price of oil had already declined back under $100 per barrel, a valuation Washington is traditionally willing to live with, and Saudi Arabia had increased production, at least modestly, in line with the OPEC+ agreement among OPEC and non-OPEC producers, primarily Russia. Riyadh has promised to revisit the oil production issue at the next OPEC+ meeting in August, so Biden’s additional effectiveness on this issue will not be tested until then.
The most concrete “win” for the Biden administration with Riyadh during this trip was a bilateral cooperation agreement on 5G/6G telecommunications and technology, an obvious attempt to stave off the potential for Chinese firms like Huawei, whose engagement with the United Arab Emirates on revamping Emirati telecommunications has been a source of considerable tension between Washington and Abu Dhabi.
Despite Biden’s cautious efforts to float a genuinely ambitious multilateral agenda, such cooperation in the Middle East is fledgling at best – with projects such as the “Negev Summit” project to build closer ties among the United States, Israel, the UAE, Bahrain, Morocco, and Egypt still struggling to get off the ground – and more typically just elusive. As noted before the visit, in the Middle East there won’t be an immediate reembrace of U.S. leadership or renewed trust in Washington as Biden was able to cultivate in Europe after the Russian invasion of Ukraine. The depth of erosion of trust in, and belief in the reliability of, Washington in the region was over a decade in the making and cannot be undone so rapidly. Indeed, the hedging response, at least at first, by Washington’s most important strategic partners in the Middle East – Israel, Saudi Arabia, and the UAE – regarding public international condemnation of Russia was a dramatic expression of the degree to which strategic diversification rather than maintaining close relations with Washington had become the most important feature of their long-term national security strategies.
This is why Biden stressed that “the United States is not going anywhere,” particularly at the July 16 GCC +3 (the six Gulf Cooperation Council member states plus Egypt, Jordan, and Iraq) summit meeting. He insisted that, “The United States is going to remain an active, engaged partner in the Middle East,” and vowed, “We will not walk away and leave a vacuum to be filled by China, Russia, or Iran.” This sentiment was greeted with cautious enthusiasm, partly because the imperative of strategic diversification remains deeply ingrained but mainly because Washington’s Arab partners have become jaded and skeptical. They are only going to respond to deeds, repeated or reinforced over time, not words. But Washington, of course, has every imperative of insisting, at the outset, that this can only be a reciprocal relationship and noting that many Americans harbor legitimate doubts of their own. So, both sides are looking for concrete actions from the other that will help overcome deep-seated skepticism.
It was always clear that sudden and dramatic progress toward a more integrated pro-U.S. coalition could not be accomplished during this visit. Indeed, the GCC +3 summit is probably best viewed as beginning to define the potential members or various functions of such groupings, which ideally would include both a security coalition nucleus and additional states that play other mutually beneficial roles. The inclusion of Iraq, for example, was meant to bolster Prime Minister Mustafa al-Kadhimi, encourage Baghdad’s reintegration into the Arab fold, and strengthen Iraq’s ties to the GCC and with its historic partners, Egypt and Jordan. No one expects Iraq to join a de facto anti-Iranian coalition. And Qatar, Kuwait, and Oman – each for their own reasons – aren’t going to join any such project either. Similarly, Jordan’s participation would have to be contingent on any project it joins not threatening the viability of a two-state outcome between Israel and the Palestinians. Yet all of them could be involved in other aspects of cooperation designed to strengthen each other within the broad rubric of Washington’s leadership or support. Success will breed success, such that outlying parties might be much more tempted to get engaged if the benefits are tangible and plausible, like infrastructural projects such as linking energy grids.
The most ambitious project touted during the Biden visit, and by both the United States and Israel in discussions with Arab governments, is the possibility of what the White House is describing as “a more integrated and regionally-networked air and missile defense architecture and countering the proliferation of unmanned aerial systems and missiles to non-state actors that threaten the peace and security of the region.” Developing such a system, or set of systems, even in a limited form, would be a major step forward in demonstrating what the United States and a U.S.-led coalition could add to strengthen the core national security of participating states. In effect, it would comprise one or more regional networks of radars and other sensors to provide early warning of – and possibly even active air defense systems to intercept and thwart – the missiles, rockets, and drones that Iran and its network of affiliated militias rely upon to attack and threaten these states.
Integrated missile defense was promoted by Washington within the GCC for well over a decade, without much progress. Historically, Gulf countries have been too reluctant to share information without constraints, pool resources, and, especially, collectivize aspects of vital national security decision making beyond the immediate national leaderships. The Biden administration is exploring whether Gulf Arab calculations have changed since Saudi Arabia and the UAE were attacked with missiles and drones by Iran or its proxies. The September 2019 attacks against Saudi Aramco facilities, which had a significant, although brief, impact on Saudi oil production, demonstrated Iran’s capabilities, especially regarding precision and hyperprecision guidance and targeting, to an alarming degree. And in January, a series of deadly missile and drone attacks against Abu Dhabi by the Iranian-backed Houthis in Yemen demonstrated not only the UAE’s vulnerability to such aerial assaults but also the limitations of its missile defense systems.
Moves toward regional air and missile defense integration are not hypothetical. Following the recent Houthi attacks in Abu Dhabi, although Israel declined to sell its highly effective Iron Dome antimissile system in its entirety, it reportedly placed its advanced early warning radar systems in the UAE and Bahrain – a perk arising from the Abraham Accords normalization process. In June, the United States reportedly assembled a secret meeting of senior military officials from Israel, Saudi Arabia, Qatar, Jordan, Egypt, the UAE, and Bahrain – precisely the nucleus of the potential coalition anticipated at the GCC +3 summit – in Egypt to discuss potential coordination against Iran’s increasing missile and drone threat. Washington’s efforts are being further bolstered by bipartisan legislation, likely to pass in Congress, that instructs the Pentagon to help develop a joint Israeli-Arab integrated air and missile defense system.
There is a long way to go to achieve more integrated regional air defense networks, no matter how loose and rudimentary. Sensitivities that could render any such project impossible may persist, at least with some Gulf Arab countries, and ongoing hesitation is evident. Tellingly, while the White House Fact Sheet on the Saudi portion of the visit highlighted this regional air defense issue, the jointly agreed Jeddah Communique was silent on the issue, focusing instead on maritime security and other initiatives. The Biden administration is offering multilateral and bilateral cooperation on a range of issues – including infrastructure, food security, space exploration, cybersecurity, public health, and even maritime security. Yet the prospect of effective cooperation to counter Iran’s drone and missile arsenal could eventually prove among the most potent potential benefits from greater regional coordination under a U.S. umbrella. Officially, the United States says it is pursuing these conversations with all of its partners “bilaterally.” Saudi officials say they are “not aware” of any multilateral conversations about the issue involving Israel. Such caution on all sides is wise given the delicacy of the questions and the evident heaviness of the lift.
The biggest obstacle to a more coordinated U.S.-led coalition is that Washington’s two most powerful partners – Israel and Saudi Arabia – lack diplomatic relations and remain significantly estranged on many different fronts. The absence of meaningful U.S. pressure on Israel regarding the Palestinians or significant positive initiatives for the Palestinians seriously complicated Biden’s task of nudging Saudi Arabia and Israel closer together. Indeed, in the aftermath of the Biden trip, Saudi officials appeared to go out of their way to pour cold water on the idea that substantial progress with the Israelis could be made without major headway on easing and ending the occupation, if not fully realizing a two-state solution.
There may be an element of bargaining and playing hard to get in this Saudi stance, but it effectively reiterates a long-standing position, based on Riyadh’s own Arab Peace Initiative, that reflects concerns not shared by its smaller neighbors that have normalized diplomatic relations with Israel. Saudi Arabia has much more complex and volatile domestic politics, as well as an Arab regional leadership role and a global Islamic leadership role, with particular sensitivities over the fate of Jerusalem, all of which would have to be balanced against whatever gains would be made by a major overture toward Israel. The Biden administration argued that measures such as Israeli involvement in Egypt’s transfer of control of two Red Sea islands back to Saudi Arabia (to protect Israeli navigation prerogatives built into the Israeli-Egyptian peace treaty) and the granting of overflight rights for Israeli civilian airliners in Saudi airspace are “big steps” toward deeper engagement, if not normalization. In fact, they are baby steps, possible precisely because they are so small that they won’t roil Saudi domestic politics, the Arab diplomatic landscape, or the global Islamic balance of power.
Getting past this obstacle will require complex triangulation. What can Israel, given its current political landscape and the growth of annexationist sentiment among Jewish Israelis, possibly give to the Palestinians? What’s the minimum the Saudis would regard as acceptable, short of an end to the occupation and the practical realization of a two-state solution? And how can Palestinians be incentivized to become part of this project or, at least, find enough benefits to not actively try to bring it crashing down? Merely asking those questions is to illustrate the difficulty of answering them. But Israel, Saudi Arabia, and the Palestinians, in their own very different ways, all find much to be alarmed about in the present state of affairs. Therefore, there could be a formula to provide each enough gain to render greater and more open Saudi-Israeli cooperation politically and diplomatically palatable.
To achieve key security goals, there may well be no need to either end the occupation or establish full Saudi-Israeli diplomatic relations. Smaller steps by Saudi Arabia – like Qatar’s hosting of an Israeli trade mission in Doha in the 1990s, which was diplomatic recognition but not full normalization – in return for Israeli concessions toward the Palestinians short of ending the occupation, could be sufficient to allow significant additional security cooperation between the two countries. Indeed, a great deal of enhanced security cooperation could be undertaken with even less formal diplomatic recognition than that. It depends on the security calculations of Israel, Saudi Arabia, and the Palestinians, as well as the United States.
And that is merely the biggest impediment. Given the wide array of powers assembled at the Jeddah summit and that Biden met with during his four-day trip to the region, complications and hurdles appear endless. Yet what the administration appears to be contemplating is not anything formalized or institutionalized but simply a greater willingness to pool resources, information, and capabilities when possible and where appropriate, in coordination with Washington. Will these traditionally, but increasingly unhappily, pro-U.S countries find greater strength in additional unity or in independent action? Given that they are confronting an Iranian power that appears headed toward nuclear weapons status, has mastered missile, drone, and guidance technology, and has a tightly integrated regional network of allied substate militias, greater coordination within a U.S.-led security umbrella has a clear, although not necessarily decisive, rational appeal.
Moreover, with Russian officials recently visiting Iran to potentially buy drones and shore up Moscow’s strategic relationship with Iran, Washington’s Middle East friends are looking at the emergence of an international coalition on the other side, consisting of Russia, Iran, Syria, Hezbollah, Hamas, and the Houthis. Given that this camp appears to be solidifying, Arab countries that are already loosely aligned, including Saudi Arabia, the UAE, Bahrain, Egypt, and Jordan, might confound skeptics and move toward greater cooperation with each other, possibly Israel, and, above all, with the United States. Biden’s Middle East trip obviously didn’t create any dramatic new dynamic of this kind, nor could it have. But it raised the possibility, in a serious and new way, and the answer was always going to only emerge in practice and over time.
is a senior resident scholar at the Arab Gulf States Institute in Washington.
Bahrain’s free trade agreement with the United States might give Manama a golden opportunity to attract foreign capital and produce a diverse range of merchandise exports.
Aramco’s journey reflects not just the shift in Saudi energy policy but a broader reimagining of what national oil companies can achieve on the global stage.
As President-elect Trump returns to the White House, he will find a transformed Gulf region, brimming with confidence and initiative; the best way to tap this energy is to consult the region and take on board the regional perspectives.
Through its careful examination of the forces shaping the evolution of Gulf societies and the new generation of emerging leaders, AGSIW facilitates a richer understanding of the role the countries in this key geostrategic region can be expected to play in the 21st century.
Learn More