That deal, hailed by the White House as a “significant expansion of…(the) security relationship” between the U.S. and Saudi Arabia, is worth $350 billion over the next ten years. However, $110 billion of it will take effect immediately.
Much like with East Asia, where the United States government cites the North Korean nuclear weapons program as justification for its military buildup in the region, Washington, D.C. claims the “Iranian threat” and continuing hostilities in the Middle East are the reasons behind the unprecedented deal.
“This package of defense equipment and services support[s] the long-term security of Saudi Arabia and the Gulf region in the face of Iranian threats,” the White House said in a statement, “while also bolstering the kingdom’s ability to contribute to counter terrorism operations across the region, reducing the burden on the U.S. military to conduct those operations.”
News of the deal certainly “bolstered” the market value of stock prices for companies within the military-industrial complex. From CNBC:
“Shortly after market open, Lockheed Martin was up about 2 percent, Raytheon was up more than 1.4 percent, Northrop Grumman climbed 1 percent and General Dynamics was up about half a percent. All four stocks reached new highs.”
But the defense sector wasn’t the only winner in the U.S. leader’s trip to Saudi Arabia. While the president and his family were quite literally being given the red carpet treatment over the weekend, it was reported that Saudi Arabia and the United Arab Emirates will donate $100 million to a World Bank fund that was “the brainchild” of Donald Trump’s daughter, Ivanka.
It’s also worth noting that after the Trump administration waged airstrikes on Syria following a chemical attack in the country in April, stocks in military companies also spiked.