With controversy swarming around Saudi Arabia’s role in the death of journalist Jamal Khashoggi and how that might affect the U.S. and its business relationship with the Kingdom, you might get the impression that Saudi Arabia is a gigantic trading partner with the U.S.
Saudi Arabia accounts for .99% (as in less than 1%) of U.S. international trade through August of this year, making it our twenty-third largest trading partner. Exports to Saudi Arabia totaled $9.27 billion, while imports from the Kingdom came in at $14.64 billion for that period, according to trade data site World City.
Here’s a quick breakdown.
Our two largest exports to KSA are $1 billion in motor vehicles and some $3.2 billion of “bombs, grenades, cartridges and parts,” as well as other military and aircraft sales. In other words, cars, trucks, planes and weapons.
Our largest and only significant import? You guessed it, oil — $13 billion worth of it.
Sounds like some serious money, but let’s dig a bit deeper.
First, oil. The U.S. used some $356 billion of oil last year through August, so that $13 billion of imported Saudi oil accounts for 3.82% of the dollar amount consumed. In other words, not so much.
“We’re actually exporting so much oil now you have to wonder about that,” says Ken Roberts, founder and president of World City. Roberts’s numbers show that oil is now the U.S.’s fifth biggest export, with $28 billion of oil shipped overseas through August, more than twice the amount we import from Saudi Arabia.
What about that $1 billion of auto exports through August to Saudi Arabia? Well, Ford and GM sales alone last year were $24 billion and $145 billion respectively.
How about $3.2 billion of defense exports? Same kind of thing. The top five U.S. defense contractors alone (and there are many, many more) do over $110 billion in sales.
So this whole notion of Saudi Arabia being a vital trading partner that might even in some mind-boggling way justify casting a blind eye to state-sponsored murder of a journalist is preposterous.
If all trade between the U.S. and Saudi Arabia ground to a halt tomorrow, the United States of America would be fine, and maybe even better than that because we wouldn’t have to try defend the indefensible.
Sure, there’s a strategic facet of our relationship (that’s a whole other tortured mess), but purely in terms of economic importance to the U.S., Saudi Arabia falls between Thailand and Hong Kong, our twenty-second and twenty-fourth biggest trading partners.
Andy Serwer is editor-in-chief of Yahoo Finance. Follow him on Twitter @serwer