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Trump Stays Quiet While Saudi Arabia-Canada Tensions Rise

Bloomberg logoBloomberg 10/08/2018 Nick Wadhams and Justin Sink
President Donald Trump speaks to the media in the lobby of Trump Tower, Tuesday, Aug. 15, 2017 in New York. With Trump is Treasury Secretary Steve Mnuchin. (AP Photo/Pablo Martinez Monsivais) © AP Photo/Pablo Martinez Monsivais President Donald Trump speaks to the media in the lobby of Trump Tower, Tuesday, Aug. 15, 2017 in New York. With Trump is Treasury Secretary Steve Mnuchin. (AP Photo/Pablo Martinez Monsivais)

(Bloomberg) -- The Trump administration is privately trying to coax Saudi Arabia to dial back hostilities with Canada even as the U.S. maintains a hands-off public approach to the escalating dispute between the two key allies, a senior U.S. official said.

The U.S. is now trying to do behind-the-scenes damage control after being caught off guard by Saudi Arabia Crown Prince Mohammad bin Salman’s move this week to expel the Canadian ambassador, freeze new trade deals and cancel direct flights to Toronto on its state airline, according to the official, who spoke on condition of anonymity.

U.S. officials believe Prince Mohammed thinks he has license from the U.S. to confront Canada, exploiting perceived tension between Washington and Ottawa over trade that emerged at the end of a Group of Seven summit in June. At the same time, President Donald Trump and his top advisers -- especially son-in-law Jared Kushner -- have been cultivating closer ties to the Saudi crown prince, a key supplier of oil who Kushner also wants to play a central role in his Israel-Palestinian peace plan.

The Trump administration has maintained a laissez faire approach to the row, refusing to publicly intervene in a crisis officials believe could take some time to resolve and has already created a series of diplomatic headaches.

‘Gravely Concerned’

Saudi diplomats did provide their American counterparts with an explanation for their recent actions, which came after Canada released a statement that said it was “gravely concerned” by the arrest of activists in the country and called for the immediate release of women’s rights campaigners Samar Badawi and Nassima al-Sadah, according to the official. Both activists were arrested in Saudi Arabia in July, according to Human Rights Watch.

But the extraordinary response on the part of the Saudis has led some within the Trump administration to conclude that Prince Mohammed is using the episode to demonstrate his control within the country -- and that avenues to reform travel through him. While the crown prince has sought to foster an international image as a social and economic reformer, he’s also ordered the detention of dozens of royal family members, government officials, and billionaires in what the government described as an anti-graft crackdown.

Global Affairs Canada declined to comment on diplomatic correspondence, and Trudeau’s office didn’t respond to a request for comment.

Group of Seven (G7) Leaders Summit © Bloomberg Group of Seven (G7) Leaders Summit

Canadian Foreign Minister Chrystia Freeland hasn’t yet spoken to Pompeo or any other U.S. counterpart on the Saudi issue since it erupted, though she has spoken to her German, Swedish and UAE counterparts, according to a Canadian government official, who spoke on condition of anonymity because they’re not authorized to speak publicly.

Canada doesn’t have any official clarity yet on what precisely Saudi has ordered in terms of dumping assets, only what the Financial Times and others have reported, the official said.

The Saudi reaction wasn’t to the scale of anything Canada has seen in the past, despite previous public comments on the issue of women’s rights activist arrests and human rights in the kingdom in general.

Out of Favor

The Saudis may be attempting to capitalize on the rift, believing Trump would be unlikely to come down hard in defense of an ally who has fallen out of favor, the U.S. official said. So far, that calculation appears to be correct.

State Department spokeswoman Heather Nauert, asked about the spat during a press conference on Tuesday, said that “both sides need to diplomatically resolve this together.”

“We can’t do it for them,” Nauert added. “They need to resolve it together.”

The U.S. has decided to work privately on a resolution, the official said, including attempts to prevent the Saudis from doing more than they’ve already done.

The U.S.’s silence has been mirrored by other key Canadian allies, including the U.K. That’s contributed to the sense that Ottawa has received little international support as it sought to champion human rights.

Billions at Stake

The U.K. under Theresa May has been consumed by the task of completing the terms for Brexit and is loath to irritate the Saudis given the billions at stake in defense contracts and the potential for lucrative trade deals. May openly pitched London as a listing destination for Aramco, Saudi Arabia’s oil company, and gave Prince Mohammed a warm welcome in March during a high-profile visit that drew protests.

a group of people standing in front of a building: Saudi Arabia Crown Prince Mohammed Bin Salman Visits U.K. Prime Minister © Bloomberg Saudi Arabia Crown Prince Mohammed Bin Salman Visits U.K. Prime Minister

At Trump’s urging, Saudi Arabia has boosted oil production in recent months, limiting the impact on consumers of the president’s decision to reimpose sanctions on Iran. Trump criticized OPEC on Twitter after the London crude price hit a three-year high of more than $80 a barrel in May. The commodity has since retreated to around $72 a barrel.

Saudi Arabia is also seen as the linchpin to the president’s proposal to create a new security alliance in the Middle East -- a so-called Arab NATO -- intended to limit Iranian influence in the region.

Regardless of motivation, the relative U.S. silence on the issue has been noticed in Ottawa. The American response is “a glimpse of what the world looks like without the U.S. advocating for human rights,” Roland Paris, a University of Ottawa professor and former Trudeau foreign policy adviser, said in an interview.

“Right now there is very little solidarity," he added.

--With assistance from Greg Quinn and Stephen Wicary.

To contact the reporters on this story: Nick Wadhams in Washington at nwadhams@bloomberg.net;Justin Sink in Washington at jsink1@bloomberg.net

To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Joshua Gallu, Chris Fournier

©2018 Bloomberg L.P.

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