A tie threatened

The US-Saudi relationship has always been paradoxical. The two countries frequently rail against each other, with Washington calling Saudi Arabia the biggest incubator and financier of terrorism in the world and Riyadh responding with rote denunciations of American imperialism. Yet the two countries always feel they need each other. The US is addicted to Saudi oil and the Saudis to US arms. The underlying tension in this alliance, however, may now lead to its unravelling. The US Senate recently passed a bill calling for 28 pages of the 9/11 Commission Report, which supposedly point to Saudi officials helping the hijackers, to be unclassified. The bill also allows surviving family members of 9/11 victims to sue the Saudis in US courts. The House of Representatives is also likely to pass the bill but President Barack Obama has signalled that he intends to veto it. Obama’s veto threat was issued for far from altruistic reasons. He says he is worried that if this bill is enacted, other countries may pass similar bills against the US and use it to freeze their assets, and their citizens may sue the US.  Another, more accurate, way to put it would be that the US has meddled in and waged war in and on so many different countries that such laws could be justifiably used against it all over the world. It is not yet clear if the US Congress would have the votes to overturn the veto but since all the senators from Obama’s own party supported the bill it is a sign that the lame-duck president no longer has the control he once did. Public opinion in the US has always been anti-Saudi and now its political parties are beginning to act on that sentiment.

The Saudis are definitely taking the threat seriously and have said they will dissolve all their financial holdings in the US, which they put at $750 billion, should the bill become law. Let us first stipulate that the Saudis will not be able to do this. Saudi Arabia holds nearly $120 billion in US Treasury bonds, which it will not be able to find buyers for so quickly and will end up losing a lot of money on. Even if there were willing buyers, the amount is hardly going to hurt the US, considering China and Japan both hold more than $1 trillion in treasury bonds. Other Saudi assets like property and stakes in corporations will be equally difficult to make liquid. The kingdom is already suffering financially because of low oil prices and it is unlikely to make such extreme attempts just to spite the US. More likely, this is meant to tell the US that the alliance needs to be maintained. It has already been fractured by the US nuclear deal with Saudi Arabia’s biggest rival Iran. And by personally targeting the kingdom, the US Senate has made it worse. All alliances are one of convenience but the US may find that angering the Saudis is more inconvenient than they imagine.