Subject: Re: Trump Steps on his own Trade Policy
Part of the reason why we run such a huge trade deficit is because there is so much demand to invest in the U.S. - not just in public debt, which is often the subject of this discussion, but also investment in private assets. So when you go out and convince the Saudis to increase their FDI in the U.S., you end up making the trade deficit worse.

Uhhh...you're missing a number of things here.

The equation for national income is:

GDP = C + I + G + (Net exports)

GDP = Gross domestic product
C = consumption (spending by the public)
I = investment
G = Government spending
Net exports = Difference between exports and imports. Imports are negative, exports are positive.

So.

Increasing I? Adds to the GDP.
If the increase in Investments is in a factory that makes something sellable to the rest of the world, exports go up. If the investment in the factory lessens the reliance on an import, then imports go down while exports go up.

So foreign investments don't make trade balances worse, per se. I suppose somebody could buy up a bunch of farmland that was producing food and then idle it, thus making us buy something from someplace else but it generally doesn't work that way.

Let's look at this deal:

Saudi Arabian DataVolt is moving forward with plans to invest $20 billion in AI data centers and energy infrastructure in the United States.
Google, DataVolt, Oracle, Salesforce, AMD, and Uber are committing to invest $80 billion in cutting-edge transformative technologies in both countries.

Data centers and energy infrastructure are jobs and money spent here in the US. Then there's the output of the data centers.

Iconic American companies including Hill International, Jacobs, Parsons, and AECOM are building key infrastructure projects like King Salman International Airport, King Salman Park, The Vault, Qiddiya City, and much more totaling $2 billion in U.S. services exports.

That's hiring US firms to do services abroad.

Additional major exports include GE Vernova’s gas turbines and energy solutions totaling $14.2 billion and Boeing 737-8 passenger aircraft for AviLease totaling $4.8 billion.

More exports.

In the healthcare sector, Shamekh IV Solutions, LLC will be investing $5.8 billion, including a plant in Michigan to launch a high-capacity IV fluid facility.

Building a plant here to make and export things.


Investment partnerships include several sector-specific funds with a strong emphasis on U.S. deployment—such as the $5 billion Energy Investment Fund, the $5 billion New Era Aerospace and Defense Technology Fund, and the $4 billion Enfield Sports Global Sports Fund—each channeling substantial capital into American industries, driving innovation, and creating high-quality jobs across the United States.

Various funds that all go toward the "I" category.

Then there's
Underscoring our commitment to strengthening our defense and security partnership, the United States and Saudi Arabia signed the largest defense sales agreement in history—nearly $142 billion, providing Saudi Arabia with state-of-the-art warfighting equipment and services from over a dozen U.S. defense firms.

$142 Billion in direct sales for F-35s and F-15EX's (most likely) and other stuff. That's another win in the "E" column.

So, no. This deal looks great on paper.