With Deals and Diplomacy, President Trump Aims to Reshape the Middle East

On today’s Big Take podcast: Billion dollar deals and shifting alliances. How President Trump plans to reshape the Middle East.

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President Trump is wrapping a whirlwind trip to the Middle East — complete with a flurry of proposed investment deals, controversial gifts and a major shift in US-Syria policy. 

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On today’s Big Take podcast, Bloomberg’s Joumanna Bercetche joins host David Gura to unpack the biggest headlines from the president’s tour of the Persian Gulf and discuss what they tell us about his larger plans for the region.

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Here is a lightly edited transcript of the conversation:

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David Gura: President Trump is wrapping up the first major overseas trip of his second term. He visited Saudi Arabia, Qatar, and the United Arab Emirates. The president has used those visits to showcase his affection for making deals. The White House claims those three Gulf nations have made more than a trillion dollars in new economic commitments to the United States. President Trump has also surprised world leaders on the trip by deciding to lift sanctions on Syria, and by having a face-to-face meeting with that country’s interim president – someone who was, previously, an al-Qaeda commander, who had a $10 million bounty on his head. 

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Trump: As I have shown repeatedly I am willing to end past conflicts and forge new partnerships for a better and more stable world

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Gura: The UAE, Qatar, and Saudi Arabia have rolled out the red carpet for Trump. There have been extravagant welcome ceremonies. Bloomberg’s Joumanna Bercetche was in Saudi Arabia for the first stop on the president’s trip. 

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Joumanna Bercetche: There is this sense that you have to greet your guests with respect and obviously you’re gonna treat the individual who holds the highest office in the United States with the utmost respect. And so it was also an opportunity for them to pull out all the stops.

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Gura: F-15 fighter jets have escorted Air Force One Arabian Horses trotted alongside the president’s motorcade. 

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Joumanna Bercetche: The Crown Prince MBS himself personally greeted President Trump breaking with protocols similar for the Emir of Qatar. Even small touches, like in Qatar, he had cybertrucks.  That was a nod to Elon Musk, obviously, sort of circuiting his convoy as he made it into the center of town. And then these lavish banquets and ornate palaces, the gold, the marble, and all of that would’ve gone down very well with President Trump.

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Gura: I’m David Gura, and this is the Big Take from Bloomberg News. Today on the show: President Trump’s four-day trip to the Middle East: the deals he’s done – and says he’s done, and Trump’s plans to reshape the region.

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Gura: So this is President Trump’s first major trip overseas, in his second term. Why did he decide to go to the Gulf? Help us understand the significance of that, that decision.

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Joumanna Bercetche: This was very significant for the Gulf countries, countries like Qatar. The last time they received a visit from the US president was back in 2003. In the case of UAE it was 2008. And for Saudi Arabia, of course it was 2022 when Joe Biden came to visit. And that was quite a contentious meeting. In the case of President Trump, there is a lot of goodwill towards the region, and I think from his perspective, he sensed it as an opportunity to make deals to forge further economic ties. But also — and this is the diplomatic angle — to take advantage of the fact that Iran is on the back foot and maybe re-establish a regional presence alongside US’ allies in the Gulf, and those include the UAE, Saudi Arabia and Qatar. From the Gulf Country’s perspective for the Crown Prince MBS, obviously this is a huge rehabilitation for him. He sort of weathered the storm of Jamal Khashoggi for a while was, was seen as a global pariah and in the past eight years, the country has undergone both the social and economic transformation , and this was Saudi Arabia’s opportunity to showcase to the world what they’ve been doing with this Saudi vision.

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Gura: Let’s start with the deals and the headline numbers seem massive. So a $600 billion deal from Saudi Arabia deals with Qatar valued at more than $200 billion in talk of a broader economic package to the tune of $1.2 trillion. How much of this is real? How much of this is sort of newly signed deals versus agreements in, in principle.

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Joumanna Bercetche: $600 billion was the headline figure that the White House put out after that bilateral meeting that took place between the Crown Prince and President Trump. Later on, Crown Prince MBS in a speech said that they’re working to increase that figure to $1 trillion of actual deals though. From what we understand, the nominal amount was $300 billion, and a lot of that was announced at this Saudi-US business forum that was being held in parallel. So many CEOs and industry leaders. Citi CEO, Jane Fraser. You had BlackRock, CEO, Larry Fink,  you had Jensen Huang from in Nvidia. Those individuals all descended on Riyad for that conference. And on the back of that we did get some signature deals, one of them as the largest defense deal in history. Um, per the White House again, uh, a $142 billion defense package in which Saudi Arabia has committed to buying arms from the United States. Also, a lot of, uh, energy, uh, MOUs, Aramco doing about $80 billion worth of partnerships with US companies. A similar theme in Doha as well. You had that big headline figure of $1.2 trillion that that was, quote unquote economic agreement. But actually in terms of what was, uh, what is firm, we understand that number to be closer to around $240 billion. Of which, and again, another record breaking figure because President Trump likes the record breaking numbers. Um, Qatar airways has placed a firm order for up to 210 Boeing Jets, and that amounts to about $96 billion in nominal value. That is the largest order that Boeing has ever received.

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Gura: Well, let’s talk about artificial intelligence. As you mentioned, Jensen Huang of Nvidia was there. We saw the US relax restrictions that were put in place when President Biden was in the White House. What is that going to mean in real terms for companies like Nvidia, having those requirements relaxed and also these new deals that have been brokered when it comes to AI chips?

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Joumanna Bercetche: Well, analysts in this space, and we spoke to Dan Ives from Wedbush. He thinks this is an absolute game changer and the fact that, uh, these US chip makers are getting access, uh, to the Middle East, to these Gulf countries that have huge AI ambitions and have the money to spend on investing in data centers. Actually opens up a new market to them. And, and you’ve seen that in the price action with some of these chip stocks this week. But I think the bigger, uh, uh, noteworthy point to flag here is that the Trump administration, Trump administration, is breaking with the Biden administration’s diffusion rules. And what they decided was that these rules were too bureaucratic and that there were smarter ways to control the distribution of US chips, those high tech chips. But in a way that doesn’t, one, hinder US competitiveness on a global scale, and two, send their allies into the arms of Chinese technology. And so this is why in in advance of this trip, there was talk about the US watering down those rules. And that’s exactly what we’re seeing. 

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Gura: I wanna ask you about the role that low oil prices are playing in motivating the kind of deals that we saw brokered over the course of these last few days. So I know that Saudi Arabia has driven down oil prices to about $60 a barrel. That, of course, stands to hurt the, the Saudi economy. Why is the Crown Prince of Saudi Arabia doing that? And, and how much pain can Saudi Arabia endure with oil prices as low as they are?

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Joumanna Bercetche: Okay. This is a really good question because when I put that question to the Saudi finance minister, he says the whole purpose is to diversify our economy, our singular dependence on one hydrocarbon. Into other parts of, of the economy. Um, and if you look at the numbers today, about 50% of Saudi’s economy is still hydrocarbon reliant. The rest comes from non, the non-oil sector, which tends to be a fast growing sector, and which also is the reason that so many of those investment firms are finding opportunities, investment opportunities in Saudi Arabia right now. That being said, Saudi Arabia is missing on the annual FDI targets that they’re setting. And this is the reason why. It was actually the Ministry of Investment  that organized that Saudi-US business summit because they wanna attract more FDI into the country. Now when it comes to oil, yes, the fiscal break-even level is somewhere closer to $90. It’s not 60. And so in that situation, they are gonna run budget deficits and there are two ways that you can do that. You can either borrow more, which is what Saudi Arabia have been doing, or you can spend less. And what has been happening in the past year is what they would say is a reprioritization of spending on these mega projects that you hear about. And that investment will have to go into more productive capacities. But ultimately this just means Saudi Arabia has gone from a position of being able to splash out cash all over the world to actually being a country that, uh, wants to direct investment in words.

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Gura: After the break – President Trump’s broader strategic goals for the region. Plus what his meeting with Syria’s interim president could mean for the United States’ relationship with Israel.   

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Gura: So let’s turn to Qatar now, and this was the President’s second stop on this trip, and the White House says it secured more than $243 billion worth of deals there. Uh, Qatar Airways says it’s gonna buy more than 200 planes from Boeing. What does that agreement tell us about Qatar’s priorities in the region and, and in the world more broadly?

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Joumanna Bercetche: Qatar’s priorities are, are twofold. Number one is also similar to Saudi Arabia to project, uh, this image of a place where business can be done of becoming another financial capital of the world. They’re also, they’ve also been massively promoting tourism. If you look at their tourism numbers, they will tell you that the numbers are up. They got 5 million tourists last year.  And so, part of this is wanting to put Qatar on the map and for people to perceive them to be more than just an LNG exporter, which is what they’re known for. But of course, there’s a diplomatic prerogative there. And Qatar has played a huge role. In regional diplomacy when it comes to speaking with Iran and its proxies with negotiating, with Hamas, with the release of the hostages. And so for them it is both economic and political.

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Gura: I mentioned Boeing, and let me stick with Boeing for a moment here because there has been so much conversation in the United States about Qatar’s offer of a Boeing 747 for the President of the United States to use as, as Air Force One. We’ve also seen headlines about the Trump family’s real estate investments in the Middle East. There are kind of swirling around this trip a lot of questions about conflicts of interest and, and potential conflicts of interest.

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Joumanna Bercetche: So let me just talk about that jet, or what people are calling it a flying palace. So this was supposedly going to be a gift from the royal family, nothing to do with Qatar Airways. Uh, but once the story broke, a lot of controversy. The Qatarsi are saying that it, it, it’s still under review.  It’s unclear. President Trump on his part is saying that this was a government to government agreement. If it does go ahead and that it would be eventually given to the, the, the Minister of Ministry of Defense or the Pentagon. Um, but. Ultimately, it does raise a lot of questions about the legality, the ethics of the US president receiving such a monumental gift from a foreign government. Equally, a lot of people have been talking about the fact that the Trump organization, which he has of course, stepped away from in terms of running the day-to-day, they’ve also been in the region in the last few weeks, whether it’s inking crypto deals in the UAE or setting up, uh, Trump towers in Dubai, in Jeddah, um, along the Red Sea, the coast of Saudi Arabia, or even in Doha with plans to open up new golf courses. Uh, so there are business deals that are being struck with the Trump organization.

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Gura: We’ve talked a lot about the deals brokered on this trip, the economic underpinnings of, of this trip. I wanna ask you about the president’s kind of broader strategic goals. And there was this extraordinary moment where you had the Crown Prince of Saudi Arabia with President Trump and Syria’s interim president, the significance of that meeting taking place of, of a US president sitting down with somebody who was once linked to Al-Qaeda and was on most wanted lists here in the US.

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Joumanna Bercetche: Honestly, it was quite unbelievable. It was really a historic moment, and probably the moment from this trip to witness those three standing side by side. It, it would’ve been inconceivable to think that that picture would’ve taken place six months ago, as you were getting towards the end of the Assad regime. And even the fact that the Syrian president, again, rehabilitated president because he was once a Jihadi fighter , uh, was standing next to the US president alongside the Crown Prince of Saudi Arabia, and it just tells you that the bigger picture here is what I referenced at the beginning, which is that the US administration and GCC countries, Saudi Arabia, sense an opportunity here to reshape the power dynamics in the Middle East.

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For so long, Syria was under the stronghold of Iran. Lebanon became increasingly under the stronghold of Iran via Hezbollah, and now, many months later, they’re all on the back foot. The Assad regime is gone. Uh, Hezbollah is severely diminished. Hamas, it’s severely diminished, and therefore it is an opportunity for Saudi Arabia to exert its influence in the region and for the US to ensure that its allies in the GCC are the ones who are gonna have further an increasing amount of diplomatic leverage. So that is the reason that President Trump came out with this big announcement in Saudi Arabia about, uh, the removal or possible removal of Syrian sanctions. And he also credited Crown Prince MBS, and by the way, Turkish President Erdogan for getting him to make that decision.

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Gura: Israel opposes this, and this is kind of where I wanna end our conversation because President Trump is in the neighborhood. He very easily could have stopped in Israel on this trip. He’s not doing that. What does that say to you about his broader strategic priorities at this point? That he is not making a stop to visit one of the US’ most longstanding allies in the region.

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Joumanna Bercetche: People are perceiving it to be a slight or a snub towards the Israeli Prime Minister, uh, Benjamin Netanyahu. It appears on some topics, there’s a bit of daylight between the two. Not least because prior to his trip, one week before President Trump’s trip to the region, he sort of announced without anyone expecting that there had been, uh, a truce agreed to between the US and Houthis, and that the Houthis, uh, would no longer continue with their attacks on ships passing through the Red Sea. But by the way, Israel was not consulted on that. Similarly, the release of American Israeli hostage Eden Alexander one day before he came to the region that was also negotiated via Qatar, but again, with not a lot of Israel involvement. At the same time, uh, the Israeli Prime Minister and his government have talked about pressing on and restarting, uh, operations in Gaza in a more intensified manner. But they have seemingly stole the decision to push further into the Gaza Strip, while President Trump is in the region continuing with his tour. So one of the big questions here, and I would say just to end this, is that there hasn’t been a lot of talk about the ceasefire in Gaza. There was one comment that President Trump made during his speech in Saudi Arabia where he said, Palestinians deserve a better future, but then pointed the blame at their own leaders for getting them to the situation that they’re in right now, but nothing beyond that. So it’s still a very delicate moment when it comes to the war in Gaza and indeed how Israel is gonna be reacting to all of the developments that came through in the last few days.

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Gura: Joumanna, you were covering this hour-by-hour, and the president did lay out in speech as a kind of grander vision for how he wants things to unfold, what he wants the Middle East to look like. Could you just synthesize that for us and, and maybe give us some indication of what he’s thinking when it comes to Iran. 

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Joumanna Bercetche: I think he said at one point in that speech, and by the way, I was in the room when he was speaking, uh, in Saudi Arabia, it was, it is quite a long speech, but at one point he did say, I don’t like war. I don’t want war. I want peace. I wanna deal with Iran. But ultimately. He wants to cut a deal with Iran, which by the way, they’ll probably end up in a situation where the US-Iran new nuclear deal will be very similar to the J-C-P-O-A deal that Obama put in place back in 2015, which President Trump famously pulled out of in his first term. Ultimately, I think he sees an economic opportunity in this region. These sovereign wealth funds are sitting on trillions of dollars worth of potential capital to deploy. He’s a deal maker. He likes doing deals, and I would say he also likes accolades and probably at the back of his mind because it’s President Trump, he’s hoping and angling for one day to get the Nobel Peace Prize.

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Gura: Joumanna, thank you very much.

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Joumanna Bercetche: Thank you.

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—With assistance from Julia Press and Rachael Lewis-Krisky.

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