Foreign Policy

Trump’s Fake Arms Deal Will Create Few Jobs in US, More Jobs in Saudi Arabia

JM Ashby
Written by JM Ashby

There's a lot going on here so we have to start at the top.

First of all, Trump has said we cannot abandon our relationship with or punish Saudi Arabia for brutally torturing and murder Washington Post Contributor Jamal Khashoggi. He says we can't do that because it would jeopardize over $100 billion in arms sales to the kingdom.

Now, Trump says we can't afford to do that because his arms deals, which hasn't been fully approved by Congress (and may never be), will create lots of jobs. The number of jobs Trump claims the deal will create changes on an almost daily basis, and the number only goes up, not down. Trump has claimed it will create 500,000 new jobs, but he has also claimed it will create a million.

The truth is it would create so few jobs in America it wouldn't even register in a yearly or even monthly jobs report.

Internal documents from Lockheed Martin and Raytheon reviewed by Reuters show that each defense contractor would create fewer than 1,000 jobs and only if the full package of sales is approved.

WASHINGTON (Reuters) - Every time President Donald Trump mentions the $110 billion arms deal he negotiated with Saudi Arabia last year, he quickly follows up, saying “It’s 500,000 jobs.”

But if he means new U.S. defense jobs, an internal document seen by Reuters from Lockheed Martin forecasts fewer than 1,000 positions would be created by the defense contractor, which could potentially deliver around $28 billion of goods in the deal. [...]

A person familiar with Raytheon’s planning said if the Saudi order were executed it could help to sustain about 10,000 U.S. jobs, but the number of new jobs created would be a small percentage of that figure.

While Trump's fake deal would may create fewer than 2,000 new jobs in total in the US if the entire package is approved by Congress -- which is very unlikely -- Reuters reports that it would create up to 10,000 jobs in Saudi Arabia

Interviews with people familiar with other major defense contractors’ plans and estimates reflect similar dynamic as Lockheed’s and Raytheon’s plans - relatively minor additions to their U.S. workforce and more significant build-up in Saudi Arabia.

The order will yield nearly 10,000 jobs in the Saudi ports for maintenance workers, but only 500 new U.S. jobs will be created, according to documents seen by Reuters.

Executives at the several of top U.S. defense companies say Riyadh had wanted much of the military equipment as a way to both develop new domestic industry and to create new jobs and local expertise as a part of Crown Prince Mohammed bin Salman’s Vision 2030 initiative to wean the country off oil dependency.

The reason I'm calling this a "fake" deal is because it's not real yet. It's not law. Right now it's a proposal and all foreign arms sales must be approved by Congress.

We already sell a significant amount of arms to Saudi Arabia through programs approved by Congress in the past, but what Trump has been promoting for the past year is new. Moreover, even if the full package is approved, it wouldn't be transferred all at once; it would be slowly transferred over 10 years.

In other words, this deal may create fewer than 2,000 new jobs over 10 years.

Despite recent events, I expect at least some of these sales will be approved by Congress at some point, but not all of it.

  • muselet

    Yeah, yeah, Donald Trump isn’t telling the truth about jobs to be created if phantom arms purchases magically occur. In other news, water is wet.

    More interesting (to me, anyway) is this little tidbit:

    Executives at the several of top U.S. defense companies say Riyadh had wanted much of the military equipment as a way to both develop new domestic industry and to create new jobs and local expertise as a part of Crown Prince Mohammed bin Salman’s Vision 2030 initiative to wean the country off oil dependency.

    Saudi Arabia—Saudi Arabia, I ask you—has an initiative in place to “wean the country off oil dependency.” The United States, under Trump, is poised to become ever more dependent on fossil fuels. Lower production by the Saudis and increased demand in the US will lead to much higher energy prices, and therefore to the detriment of the US economy.

    I think Reuters buried the lede here.

    –alopecia

    • JMAshby

      The Saudis contracted with Japan’s SoftBank to build the largest solar power farm in the world (costing $200 billion), because if there’s anything they have an even greater abundance of than oil, it’s sun.

      The biggest threat to MBS’s big plans is MBS. I’m skeptical that Vision 2030 won’t become Vision 2040 after internal squabbling and international blunders derail their plans. It probably already has.

      • muselet

        No controlled economy managed to stay on target for a Five-Year Plan for more than about two years and a bit. A 22-Year Plan is just silly.

        However, the fact that Mohammed bin Salman recognizes that oil is not the fuel of the future while Donald Trump does not is cause for concern.

        –alopecia

    • Draxiar

      To that, upgrading and installing green energy systems across the country would create a plethora of jobs across many sectors. We’re at the dawn of a new industrial revolution and we’re letting the opportunity pass us by. We need an environmental president.