Donald Trump, Saudi Arabia, And The Petrodollar

Obama pulled out his veto pen 12 times during his presidency.

Congress only overrode him once…

In late 2016, Obama vetoed the Justice Against Sponsors of Terrorism Act (JASTA). The bill would allow 9/11 victims to sue Saudi Arabia in US courts.

With only months left in office, Obama wasn’t worried about the political price of opposing the bill. It was worth protecting Saudi Arabia and the petrodollar system, which underpins the US dollar’s role as the world’s premier currency.

Congress didn’t see it that way though. Those up for reelection couldn’t afford to side with Saudi Arabia over US victims. So Congress voted to override Obama’s veto, and JASTA became the law of the land.

The Saudis, quite correctly, see this as a huge threat. If they can be sued in US courts, their vast holdings of US assets are at risk of being frozen or seized.

The Saudi foreign minister promptly threatened to sell all of the country’s US assets.

Basically, Saudi Arabia was threatening to rip up the petrodollar arrangement, which underpins the US dollar’s role as the world’s premier currency.
Donald Trump and the Saudis

Unlike every president since the petrodollar’s birth, Donald Trump is openly hostile to Saudi Arabia.

Recently he put this out on Twitter:

Dopey Prince @Alwaleed_Talal wants to control our U.S. politicians with daddy’s money. Can’t do it when I get elected.

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