As Saudi Arabia prepares to host President Donald J. Trump in mid-May, the kingdom faces a critical moment that demands a comprehensive reassessment of its strategic priorities. In a rapidly shifting global environment, Riyadh must reconcile its domestic reform agenda with conflicting pressures from U.S. policy objectives. This visit will serve as a crucial test of Crown Prince Mohammed bin Salman’s ability to assert Saudi agency, balancing economic transformation, regional stability, and strategic autonomy. Global markets are in turmoil and regional geopolitical fault lines are shifting.

Riyadh now must address competing challenges in three major policy areas: the disruptive fallout of the U.S.-China trade war, the resurgence of U.S. pressure on Iran, and the volatile dynamics surrounding the Gaza conflict. These intertwined forces not only impact regional geopolitics but also put at risk the long-term domestic reform agenda encapsulated in Vision 2030 – a transformation blueprint that relies on predictable oil revenue and robust fiscal management.

The U.S.-China Trade War: Economic Turbulence and Its Ripple Effects

The escalating U.S.-China trade war has injected fresh uncertainty into the global economy. China recently raised its tariff rate to 125% after the Trump administration confirmed U.S. duties had reached 145%. Although critical energy commodities, such as oil and gas, have largely been spared from these direct tariffs, the subsequent economic disruption is reverberating through global supply chains and investor confidence.

For Saudi Arabia, the stakes are exceptionally high. The kingdom relies on maintaining oil prices above $90 per barrel to balance its budget. A prolonged downturn in oil prices would force Riyadh into severe fiscal adjustments, potentially delaying or downsizing flagship Vision 2030 projects, including Neom, whose scope has already been scaled back.

Furthermore, as multinational companies shift production out of China to avoid costly tariffs, global supply chains are being reconfigured. This realignment may force Saudi Arabia to compete with newly emerging manufacturing hubs, while global companies channel investments to regions with lower costs and friendlier trade policies. In essence, the kingdom now faces a dual challenge: attracting alternative investment sources while managing an influx of inexpensive Chinese goods redirected to regional markets.

Moreover, the economic uncertainty accompanying trade disputes tends to suppress global demand – even for energy. On April 6, Goldman Sachs revised its Brent crude forecast to $58/bbl by December. For Riyadh, such a scenario would likely require spending cuts across public services and delay further diversification initiatives – a paradox in which the very oil revenue meant to fund economic transformation remains deeply vulnerable to global instability.

This challenge underscores the need for Saudi Arabia to pursue fiscal prudence and investment diversification as core elements of its Vision 2030 strategy.

Renewed U.S. Pressure on Iran: Shifting Regional Dynamics and Security Implications

While the trade war has dominated international economic discourse, another critical element shaping Saudi Arabia’s strategic landscape is the United States’ Iran policy. On February 4, Trump signed a National Security Presidential Memorandum reinstating the “maximum pressure” campaign against Iran, a strategy that combines economic sanctions with implied military threats.

Historically, both the United States and Saudi Arabia have viewed Iran’s regional ambitions with deep concern, sharing a common interest in curbing Tehran’s influence. In March 2023, however, Riyadh pursued a surprising rapprochement with Tehran – brokered by China – marking a shift from open hostility to pragmatic diplomacy.

Iran and the United States concluded their first round of indirect nuclear talks in Oman – the highest-level engagement between the two countries since 2018. A second round of “constructive” talks mediated by Oman, which took place in Rome a week after the first session in Muscat, are expected to be followed by “technical discussions.” These talks are widely seen as a potential breakthrough. Yet, a robust nuclear agreement that restricts Iran’s ambitions could ironically free Tehran to boost its oil exports, disrupting OPEC+ coordination and eroding Saudi pricing power. Conversely, if the negotiations collapse, the ensuing fallout might escalate into military conflict, undermining regional stability and threatening Saudi Arabia’s long-term economic and strategic interests.

Saudi officials have made it clear that they prefer a stable regional order. This cautious stance reflects an evolved strategic calculus in Riyadh, emphasizing long-term stability over short-term tactical gains while also engaging in pragmatic diplomacy and selective alignment to hedge against uncertainty.

The Gaza Conflict: Diplomatic Challenges and Strategic Redlines

A third element complicating the geopolitical landscape in the Gulf is the volatile situation in Gaza. Recent U.S. policy shifts under Trump have introduced controversial proposals that starkly contradict long-established Arab positions. Notably, Trump’s proposal during a February 4 news conference for the United States to “take over” the Gaza Strip and forcibly displace Palestinians from the territory represents a stark departure from traditional U.S. diplomacy in the Middle East and directly contradicts long-established Arab positions on Palestinian rights.

For Saudi Arabia, the prospect of U.S.-led normalization efforts that sideline Palestinian rights creates serious risks. Should Washington pressure Riyadh to accept such a deal, the kingdom would likely face domestic backlash and greater regional instability. In recent public statements, Saudi officials have unequivocally rejected proposals that would involve the forced displacement of Palestinians, reinforcing their commitment to justice and humanitarian principles.

In this context, the Gaza conflict could have ripple effects beyond bilateral relations, potentially undermining broader U.S.-Saudi cooperation. To preserve policy coherence and autonomy, Riyadh must walk a tightrope – supporting Palestinian aspirations without endangering Saudi Arabia’s vital alliance with the United States. This balancing act is expected to be a central theme during Trump’s visit, where high-stakes discussions will test Riyadh’s resolve.

Breakthrough Prospects During the Trump Visit

The extensive personal and financial ties between Trump and the Saudi leadership raise the stakes for this high-profile visit. His business dealings are tightly intertwined with Saudi investments: His golf courses have hosted LIV Golf tournaments – the league backed by the Public Investment Fund – and he facilitated two rounds of negotiations between LIV and the PGA Tour at the White House. The PIF also invested $2 billion in Affinity Partners, the private equity firm led by Jared Kushner, Trump’s son-in-law and former senior advisor. Meanwhile, the Trump Organization’s real estate footprint in Saudi Arabia is expanding, with a planned Trump Tower in Riyadh and an existing project in Jeddah, underscoring the family’s deepening commercial ties to the kingdom. In February, Trump further cemented this alignment by delivering a keynote address at a Saudi-sponsored international investment summit in Miami.

These deep connections not only spotlight the depth of the Trump-Saudi relationship but also frame the visit as a potential springboard for breakthroughs – beyond the mere announcement of a deal. On the security and economic fronts, recent initiatives hint at transformative policy shifts. For instance, Trump issued an executive order directing the Defense and State departments to coordinate with the commerce secretary in supplying select partners with some of the United States’ most tightly controlled weapons systems – including complete rockets and drones. The order could accelerate arms sales to Saudi Arabia, the United Arab Emirates, and Qatar and position U.S. defense contractors to benefit substantially. Such a policy could help bolster the long-standing security alliance between the United States and Saudi Arabia, reinforcing Riyadh’s strategic position in the region.

However, other issues remain fraught with tension. The normalization of ties between Saudi Arabia and Israel, for example, poses a unique challenge. From the Saudi perspective, such a deal is seen as mutually exclusive with Trump’s more controversial proposal to displace Palestinians from Gaza and resettle them elsewhere – a vision that also contradicts Israeli Prime Minister Benjamin Netanyahu’s renewed military operations in Gaza.

Adding to these challenges is Trump’s questionable ability to meet other critical Saudi demands. These include a formal defense treaty akin to the one the United States signed with Japan, substantive U.S. assistance with the Saudi nuclear program, and broader economic cooperation agreements. These unresolved issues signal that, while there are prospects for significant bilateral breakthroughs, such achievements may face considerable obstacles.

Economic matters further complicate the picture. Apart from the broader implications of the trillion-dollar Vision 2030 agenda, the kingdom’s fiscal commitments over the coming years also encompass large outlays for marquee events, such as the FIFA World Cup in 2034. Lower energy prices could force Riyadh to reprioritize projects; indeed, government-related entities have already started ramping up cash-raising efforts. Low crude oil prices could compel the kingdom to enact deeper spending cuts than those currently forecast or to accelerate debt sales – a move that might also complicate Mohammed bin Salman’s pledge to dramatically increase trade and investment with the United States over the next four years.

Strategic Recalibration Ahead of the Trump Visit

Amid a backdrop of economic turbulence and regional security challenges, Trump’s upcoming visit to Saudi Arabia is poised to become a defining moment for both sides. Rather than simply yielding an announcement of a deal or a new Saudi investment commitment in the United States, the meeting holds the promise of deepening the complex relationship between Washington and Riyadh.

On one hand, there is a convergence of personality-driven diplomacy and transactional dealmaking – where personal rapport and dealmaking have long characterized Trump’s interactions and both sides share a clear interest in stabilizing regional tensions. The potential for increased Saudi investment in the United States or expanded economic cooperation could signal not merely a transactional win but a deeper strategic realignment.

However, significant questions remain regarding the compatibility of goals and policies. On the financial front, the feasibility of any major investment deal must be weighed against the current volatility of global markets and the uncertainties created by the ongoing U.S.-China trade war. The “America First” agenda, which Trump has reasserted with a combination of aggressive tariffs and economic statecraft used as a geopolitical cudgel, aims at achieving “energy dominance” and bolstering domestic U.S. industries. This approach, driven by Trump’s impulsive, unpredictable, and often mercurial style, may conflict with Saudi Arabia’s pursuit of a stable, diversified economic strategy.

Moreover, the bruising trade war with China adds another layer of complexity. If U.S. policies increasingly focus on a strictly bilateral framework – especially in terms of Gulf security and economic dependence – Washington could inadvertently constrain Riyadh’s broader foreign policy options. The shifting global supply chains, emerging alliances through forums like BRICS, and the evolving dynamics of U.S.-Iran and U.S.-Gaza policies all indicate that any breakthrough must be carefully calibrated. Riyadh must reassure Washington of its reliability as a partner while preserving its strategic autonomy by managing internal priorities and external alignments.

Referendum on U.S.-Saudi Relations

Trump’s visit is not just another high-profile summit – it is a referendum on the future of the U.S.-Saudi relationship in an era defined by redlines and realpolitik. While the shared interest in regional stability and mutually beneficial economic deals lays promising groundwork, real concerns regarding affordability, goal compatibility, and the potential for unpredictable policy shifts remain. The outcome of these talks will likely depend on whether both sides can bridge the gap between short-term transactional interests and long-term strategic objectives.

Ultimately, the meeting offers a dual promise: It has the potential not only to reinforce the deep-rooted alliance between the United States and Saudi Arabia but also to expose the fault lines that could undermine future cooperation. The challenge lies in balancing immediate dealmaking with the need for a durable, coherent strategy – one resilient enough to withstand global economic volatility, shifting geopolitical dynamics, and the unpredictable impulses of an “America First” agenda.

In the end, Saudi Arabia’s ability to steer through this moment – without ceding too much ground, compromising its regional redlines, or becoming overly entangled in Trump’s polarizing orbit – will be a defining test of its emerging role as a more independent, assertive power in a multipolar world.