Trump Says That Huge Saudi Arabia Arms Deal Will Create 500,000 U.S. Jobs. Defense Firms Suggest the Number Is Much Smaller

October 30, 2018, 11:38 AM UTC

The U.S. arms deal with Saudi Arabia will probably create some jobs, just nowhere near as many as Trump says.

President Trump is fond of claiming that the $110 billion arms deal he negotiated with Saudi Arabia last year (which might not actually be worth $110 billion) will create 500,000 jobs. But according to documents seen by Reuters, the jobs expected to be created in defense and related industries will total a fraction of that estimate.

Instead, defense contractors such as Lockheed Martin (LMT) and Raytheon (RTN) predict the deal will create new jobs in the defense industry to the tune of hundreds rather than hundreds of thousands, though it will help sustain additional American jobs. New and sustained jobs in the defense industry supported by the Saudi arms deal will have a multiplier effect in the larger economy, which Reuters estimates will bring the total number of jobs sustained or created by the Saudi arms deal to somewhere between 84,000 and 168,000, or one-fifth to one-third of the total Trump has been claiming.

Often left out of the conversation is the number of jobs that will be created in Saudi Arabia, which is aiming to create 40,000 defense jobs by 2030. According to Reuters estimates, about 10,000 new jobs would be added in Saudi Arabia. That imbalance conflicts with Trump’s claims that he puts “America first” and prioritizes American jobs.

Of course all of those numbers are based on the best-case scenario if the entire $110 billion deal comes together. That’s a scenario of which experts are increasingly skeptical, particularly as the death of Jamal Khashoggi increases tensions between the two countries.

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