Transactional Trump will seek mutual benefits

There were few guests from outside the US establishment at Donald Trump’s inauguration in the Capitol building on Monday. Along with the past presidents, supreme court justices, members of congress, tech titans, and the military band avoiding an icy Washington day, was Javier Milei, the libertarian president of Argentina. Also present were Giorgia Meloni of Italy and – perhaps less of a Trumpian fellow-traveller – Han Zheng, the Chinese vice-president.

And then there was Reema bint Bandar, the Saudi ambassador to the US. Like her father before her, the long-serving Bandar bin Sultan, Princess Reema knows how to network in a city in which she has spent much of her youth and adult life. Her wangling of a ticket to the inauguration – the first to which foreigners have been invited – was a coup.

In a post on X, and accompanying photos, she celebrated the relationship between the US and the kingdom. “We look forward to continuing our work together for the benefit of both our peoples, our region, and the world.” Perhaps not a zinger.

In the famously transactional Trump White House, there will be a quid pro quo for the invitation. That is likely to be early agreement to the Abraham Accords, the peace treaty signed in 2020 between Israel, on the one hand, and the UAE, Bahrain, Morocco and Sudan on the other.

The 15-month war in Gaza has placed all the signatories in a difficult situation – as it was intended to do – but with a ceasefire and a determined new administration that is likely to change.

Before Gaza, trade between Israel and the seven Arab countries that normalised relations was healthy – and picking up. In 2023, flows exceeded $4 billion, up 16 percent from the year before, according to the Abraham Accords Peace Institute, which uses data from the Israel Central Bureau of Statistics.

Anthony Blinken, the outgoing secretary of state, said last week at the Atlantic Council that “much of the heavy lifting for normalisation is complete, including negotiations on complex US-Saudi elements of an agreement”.

The Democrats refer to “normalisation” rather than the Accords, in part because the latter were the signature diplomatic achievement of their opponent’s first term.

Saudi Crown Prince Mohammed bin Salman has said that any deal with Israel will depend on the establishment of an independent Palestinian state. The kingdom has also been looking for cooperation with the US on civil nuclear technology and on certain weapons, and a formal defence pact.

Trump referred to the Accords several times on Monday. And he also drew attention to his first visit as president to the kingdom in 2017. He said in the Oval Office Saudi Arabia had then agreed to buy $450 billion of US products – “the most under-reported story ever”.

Like at least one other Trump attribution after the inauguration – Spain being a member of the Brics group – that one seems to be wide of the mark.

But, judging by the speed and precision of many of the executive orders, the new administration is pushing hard for an Israel-Saudi agreement. Watch this space.

• Saudi Arabia’s $1 trillion Trump bet and its possible returns
• Trump sees the ‘Big Three’ as the coming force in global oil markets
• Why Gulf investors are betting big on Trump’s America

Another announcement in this choreographed and highly political first few days was that OpenAI, Oracle and Japan’s Softbank will spend $500 billion over four years on Stargate, a new entity tasked with building “colossal” AI facilities across the US.

MGX, a UAE vehicle backed by Mubadala, and Abu Dhabi-based AI specialist G42, will serve as investment partner. MGX is only a year old – the Artificial Intelligence and Advanced Technology Council created it in January last year.

The investment is less diplomatically fraught than Israel-Saudi normalisation, but it is a sign in this instance that the UAE is favoured in the new administration. But will anyone ever audit that $500 billion figure? As the old adage has it, soon we will be talking serious money.