عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Saudi Arabia, US Set Record Levels of Non-Oil Trade Exchange

The Saudi-US trade relationship is witnessing a growth in non-oil goods exchange (Asharq Al-Awsat)
The Saudi-US trade relationship is witnessing a growth in non-oil goods exchange (Asharq Al-Awsat)
    Washington: Heba El Koudsy - Dubai: Musaed al-Zayani
TT
TT

Saudi Arabia, US Set Record Levels of Non-Oil Trade Exchange

The Saudi-US trade relationship is witnessing a growth in non-oil goods exchange (Asharq Al-Awsat)
The Saudi-US trade relationship is witnessing a growth in non-oil goods exchange (Asharq Al-Awsat)

Trade relations between the United States and Saudi Arabia recovered from the pandemic's low levels in 2020, recording high exchanges of oil and non-oil goods in 2021.

A report issued by the Washington-based Saudi-US Business Council indicated that total trade volume reached $24.7 billion, a 22 percent increase over 2020 when trade amounted to $20.2 billion.

US exports to Saudi Arabia totaled $11.1 billion, up 0.3 percent from last year. However, exports of key defense-related segments declined while export of electronics, industrial goods, motor vehicles, and pharmaceuticals expanded.

Saudi non-oil exports to the US totaled $2.4 billion, increasing 71 percent from the previous year's $1.4 billion, marking the highest annual non-oil exports from Saudi Arabia to the US on record.

Oil exports

Oil exports to the US rose 46 percent from $7.6 billion to $11.1 billion, according to the report exclusively obtained by Asharq Al-Awsat.

The report monitors the development of trade relations between the two countries and the expansion of non-oil exports.

The trade relationship between the two countries continues to evolve as Saudi non-oil exports grow beyond downstream petroleum industry products to metals and industrial manufacturers.

At the same time, the US remains the Kingdom's second-largest source of goods across a highly diversified export profile.

The report indicates that Saudi oil exports to the US declined in 2021, but they rose steadily with the increase in demand due to the pandemic and increased consumption of the transportation and industry sectors.

Saudi exports

Saudi non-oil exports to the US rose to $2.4 billion in 2021, marking the highest annual level of non-oil exports.

Fertilizers topped the Saudi non-oil exports to the US, reaching $688 million, while Saudi exports of urea fertilizer doubled during the past decade to $100 million.

Metals and mining exports from Saudi Arabia to the United States continued to grow in 2021, topped by aluminum and its products reaching $347 million, making it the third highest Saudi non-oil export to the US.

Other Saudi metals witnessed a 102 percent increase in export volume to the US, as Saudi Arabia is the fourth largest non-oil exporter to the United States.

US exports

According to the report, US exports to Saudi Arabia diversified across a range of electrical, mechanical, industrial, agricultural, and pharmaceutical industries.

Cars ranked the first for highest US exports to Saudi Arabia in 2021, with a total of $1.9 billion. Consumer cars comprised about 75 percent, while the remaining 25 percent included military vehicles, tractors, and trailers.

The second largest export category was boilers, machinery, spare parts, and others, constituting 12 percent of US goods exported to Saudi Arabia in 2021.

Historical data

According to data recorded by the Saudi Ministry of Commerce, the volume of trade exchange between the Kingdom and the US in the past five years amounted to $166.1 billion, while the trade exchange between the two countries reached $36.5 billion in 2017, and $44.2 billion in 2018, $32 billion in 2019, and $22.9 billion in 2020.

Attractive Gulf market

Economist Jarmo Kotilaine said Saudi Arabia's strategic importance is growing, especially among US companies and investors, because it has dynamic markets in the "heart of the old world" with easy access to the surrounding geographic areas.

Kotilaine told Asharq Al-Awsat that Saudi markets are characterized by a young, dynamic demographic and ambitious diversification agendas, noting that they all require increasing trade volumes and capital mobilization.

He explained that given its top-notch infrastructure and regulatory reforms, the Arabian Peninsula had become a true crossroads of the global economy and a hub for intercontinental flows of trade, travel, and capital.

The expert noted that the region is becoming an increasingly important target for US companies and investors looking for new opportunities in the Arabian Peninsula and beyond.

Kotilaine said that investments are also increasing in Saudi Arabia, noting that the Kingdom now houses an increasing number of companies with global prospects, where giant companies such as Aramco and SABIC have been creating a global presence for years.

Similarly, many Saudi investors are looking for strategic opportunities globally.

The Public Investment Fund (PIF) combines value investment and strategic location through acquiring assets that are not only logical from a financial perspective but can also contribute to diversifying the Saudi economy and progress towards more innovation, said Kotilaine.

A new chapter

Kotilaine stressed that Saudi-US trade is now poised for a new essential and significant stage in bilateral relations, noting that the most important opportunity is to shift the focus of the relationship more from the exchange of goods to investment and knowledge exchange.

Most Viewed

 
 
Business

Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
TT
TT

Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.

Business

Aljadaan: Emerging Markets Account for 70% of Global Growth

Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
TT
TT

Aljadaan: Emerging Markets Account for 70% of Global Growth

Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat

Saudi Minister of Finance Mohammed Aljadaan stressed Sunday that the world economy is going through a “profound transition,” saying emerging markets and developing economies now account for nearly 60 percent of the global Gross Domestic Product (GDP) in purchasing power terms and over 70 percent of global growth.

In his opening remarks at the AlUla Conference for Emerging Market Economies, organized by the Saudi Ministry of Finance and the IMF in AlUla, the minister said these economies have become an increasingly important driver of global growth with their share of global economy more than doubling since 2010.

“Today, the 10 emerging economies in the G20 alone account for more than half of the world growth. Yet, they face a more complex and fragmented environment, elevated debt levels, slower trade growth and increasing exposure to geopolitical shocks.”

“Unfortunately, more than half of low income countries are either in or at the risk of debt distress. At the same time global trade growth has slowed at around half of what it was pre the pandemic,” Aljadaan added.

The Finance Minister stressed that the Saudi experience over the past decade has reinforced three lessons that may be relevant to the discussions at the two-day conference, which brings together a select group of ministers and central bank governors, leaders of international organizations, leading investors and academics.

“First, macroeconomic stability is not the enemy of growth. It is actually the foundation,” he said.

“Structural reforms deliver results only when institutions deliver. So there is no point of reforming ... if the institutions are unable to deliver,” he stated.

Finally, he said that “international cooperation matters more, not less, in a fragmented world.”

Business

Georgieva from AlUla: Growth Still Lacks Pre-pandemic Levels

Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
TT
TT

Georgieva from AlUla: Growth Still Lacks Pre-pandemic Levels

Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)

International Monetary Fund (IMF) Managing Director Kristalina Georgieva said Sunday that world growth still lacks pre-pandemic levels, expressing concern as she expected more shocks amid high spending and rising debt levels in many countries.

Georgieva spoke at the AlUla Conference for Emerging Market Economies, organized by the Saudi Ministry of Finance and the IMF in AlUla.

The two-day conference brings together a select group of ministers and central bank governors, leaders of international organizations, leading investors and academics to deliberate on policies to global stability, prosperity, and multilateral collaboration.

Georgieva said that the conference was launched last year in recognition of the growing role of emerging market economies in a world of sweeping transformations.

“I came out of this gathering .... With a sense of hope for the pragmatic attitude and determination to pursue good policies and build strong institutions,” she said.

Georgieva stressed that “good policies pay off,” and said that growth rates across emerging economies reached four percent this year, exceeding by a large margin those of advanced economies that are around 1.5 percent.