To displace China: US prepares new $100bn defence package for Saudi Arabia

Donald Trump's administration is planning to sign a massive $100 billion defence deal with Saudi Arabia, seeking to restore US influence in the region and push Chinese arms companies out of the local market.

Here's What We Know

According to Reuters, which cited six sources familiar with the negotiations, the United States is preparing a package of contracts that could include the supply of US C-130 transport aircraft, air defence systems, radars, drones and missiles. The main contractors will be Lockheed Martin, RTX (Raytheon), Boeing, Northrop Grumman and General Atomics.

The latter plans to provide Riyadh with MQ-9B SeaGuardian drones, which Saudi Arabia has been interested in since 2018. According to preliminary estimates, the deal is worth up to $20 billion. At the same time, Riyadh is also seeking to acquire fifth-generation F-35 fighters, but this may be hampered by the US's current commitments to Israel to maintain its military superiority in the region.

It is not yet known whether the new agreement contains the conditions for limiting Saudi Arabia's cooperation with China, which were key in the previous proposal of the Trump administration. That proposal in 2020 included expanded access to US weapons in exchange for curbing Chinese investment. The previous similar package in 2017 was estimated at $110 billion, but was only partially implemented, to the tune of about $14.5 billion.

Military cooperation between the two countries cooled after the high-profile scandal surrounding the murder of journalist Jamal Khashoggi in 2018. In response, the US restricted arms exports to the kingdom. However, in 2022, Washington began to gradually change course amid growing energy dependence, and in 2024, it officially lifted restrictions on offensive arms sales.

The official announcement of the new deal is expected to be made in May during Donald Trump's visit to Riyadh.

Source: Reuters