{"id":3805,"date":"2026-09-14T15:07:24","date_gmt":"2026-09-14T15:07:24","guid":{"rendered":"https:\/\/sotnews.agency\/?p=3805"},"modified":"2026-09-14T15:07:24","modified_gmt":"2026-09-14T15:07:24","slug":"fiscal-pressure-from-iran-war-clouds-gulf-states-us-spending-plans-donald-trump","status":"publish","type":"post","link":"https:\/\/sotnews.agency\/?p=3805","title":{"rendered":"Fiscal pressure from Iran War clouds Gulf States\u2019 US spending plans | Donald Trump"},"content":{"rendered":"
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The ongoing conflict<\/a> between the United States and Iran could make it harder for three Gulf countries \u2014 Saudi Arabia, Qatar and the United Arab Emirates \u2014 to deliver on nearly $4 trillion in economic commitments to the US announced under President Donald Trump\u2019s \u201cAmerica First\u201d agenda, according to a new analysis from the Peterson Institute for International Economics (PIIE).<\/p>\n

The 15-page report released Monday says the Gulf states are facing growing economic pressure from the US and Israel\u2019s war on Iran<\/a>, including the need to spend more on defence, energy infrastructure and trade.<\/p>\n

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\u201cThe conflict has weakened their fiscal positions and economic prospects and may have lasting effects on their growth models. It has also weakened their confidence in the US security umbrella in the Gulf,\u201d the report said.<\/p>\n

The war has hit the Gulf economies much harder than the global economy at large, according to the report. The International Monetary Fund (IMF) cut its 2026 global growth forecast by 0.3 percentage points, but the reductions were much larger for the Gulf states.<\/p>\n

The IMF cut Qatar\u2019s growth forecast by 14.7 percentage points, to 8.6 percent. Saudi Arabia\u2019s forecast was cut from 4.5 percent to 1.7 percent, while the UAE\u2019s was reduced from 5.6 percent to 1.7 percent, as well.<\/p>\n

Gulf governments have enough financial assets and borrowing capacity to avoid an immediate funding crisis, according to the report, but PIIE said the economic pressure could lead the countries to prioritise spending at home over investments in the US.<\/p>\n

\u201cSaudi Arabia had already begun rebalancing toward domestic investment before the war; the conflict appears to have reinforced that shift,\u201d the report said.<\/p>\n

Saudi Arabia\u2019s Public Investment Fund has reduced the share of its portfolio allocated to international investments by 10 percent over the last six years to 20 percent, down from 30 percent in 2020.<\/p>\n

The report also warns that delays in fulfilling the investment commitments could lead to additional pressure from the White House, which has previously used tariffs to push other countries to follow through on their commitments.<\/p>\n

\u201cThe Trump administration has already shown limited patience with delays by other partners. In January 2026, Trump threatened to raise tariffs on South Korean goods, citing delays by the Korean legislature in enacting its US investment agreement,\u201d the report said.<\/p>\n

\u201cContinued frustration over Korea\u2019s delayed implementation also appears linked to the recent US decision to scale back joint military exercises there,\u201d the report continued.<\/p>\n

That pressure has coincided with progress on US investment commitments from South Korea.<\/p>\n

The Wall Street Journal reported last week that the South Korean government is close to a potential energy investment deal worth more than $100bn that would help support the expansion of artificial intelligence infrastructure in the United States.<\/p>\n

Qatar, meanwhile, continues to pursue investments in the US energy sector. QatarEnergy began producing liquefied natural gas (LNG) at a facility in Texas in March and began exports the following month.<\/p>\n

QatarEnergy\u2019s ties with US energy companies could expand further. It is negotiating with several US LNG producers on contracts through 2031 to help replace capacity lost after Iranian attacks damaged Qatar\u2019s LNG facilities, according to the Reuters news agency.<\/p>\n

Political pressures<\/h2>\n

The PIIE report said the lack of clear definitions, timelines and ways to measure the investment commitments could make it difficult to determine whether the countries are actually following through. The deals have also drawn scrutiny from lawmakers.<\/p>\n

\u201cPolitical concerns in the United States present another obstacle. Members of Congress have raised questions about the economic and national security effects of Gulf investments, governance, and possible conflicts of interest,\u201d the report said.<\/p>\n

One example cited in the report is a $2bn investment in Binance by a UAE-backed investment firm. The deal used a stablecoin issued by World Liberty Financial, a cryptocurrency company linked to the Trump family. Senators Elizabeth Warren of Massachusetts and Jeff Merkley of Oregon sought records about the transaction, citing concerns about the financial ties involved in June 2025.<\/p>\n

By October 2025 Trump pardoned Binance founder Changpeng Zhao, who had pleaded guilty in 2023 to violating US anti-money-laundering laws.<\/p>\n

Lawmakers have also raised concerns about Gulf sovereign wealth funds from Saudi Arabia, the UAE and Qatar being involved in financing major US corporate deals, across US media, including Paramount Skydance\u2019s proposed acquisition of Warner Bros Discovery, the parent company of CNN.<\/p>\n

\u201cThe question now is whether, and in what form, the three countries will implement their commitments,\u201d the report said.<\/p>\n<\/div>\n


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The ongoing conflict between the United States and Iran could make it harder for three Gulf countries \u2014 Saudi Arabia, Qatar and the United Arab Emirates \u2014 to deliver on nearly $4 trillion in economic commitments to the US announced under President Donald Trump\u2019s \u201cAmerica First\u201d agenda, according to a new analysis from the Peterson…<\/p>\n","protected":false},"author":1,"featured_media":3806,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"facebook_2277560469115098_106292521332774":"","twitter_aToxNzczMzI3Njk4OTg4ODUxMjAxOw==_1773327698988851200":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[11],"tags":[],"class_list":["post-3805","post","type-post","status-publish","format-standard","has-post-thumbnail","category-international-news"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t