Bloomberg Talks Dr. Adam Posen Talks U.S.-Saudi Relationship
Nov 18, 2025
Dr. Adam Posen, President of the Peterson Institute for International Economics, shares insights on U.S.-Saudi relations. He explains Saudi Arabia's drive to diversify its economy under Crown Prince Mohammed bin Salman. Posen argues that the U.S. should tie F-35 approvals to meaningful commitments from Saudi Arabia. He also discusses the negative impact of perceived corruption on trust and how domestic priorities should align with foreign policy to enhance public welfare.
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Saudi Strategy To Diversify
- Saudi deeper integration with the U.S. is a credible path to diversify its economy away from oil dependence.
- Adam Posen says Saudi investment and domestic reforms put them on a transition path but don't yet equal full diversification.
U.S. Gains Are Strategic, Not Economic
- For the U.S., Saudi ties are primarily a security and diplomatic issue, not an economic windfall.
- Posen argues investment alone isn't a large net gain for the U.S. economy given persistent global capital flows.
Condition Major Deals On Substantial Commitments
- Tie major arms sales and strategic concessions to substantial diplomatic commitments from Saudi Arabia.
- Seek agreements on Iran, Pakistan guarantees, or Gaza rebuilding as conditions for deeper cooperation.