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Why the U.S. and Saudi Arabia need each other, despite growing differences
Saudi Arabia may be the greatest holder of U.S. debt, and with a Senate bill that implicates the kingdom in the 9/11 attacks, the Saudis are threatening economic repercussions. - photo by Sam Turner
When President Obama landed Wednesday in Saudi Arabia, he wasn't greeted by King Salman as were other global leaders who arrived earlier that day. He was met instead by the governor of Riyadh.

According to CNN, while Obama did not consider this reception a snub, many social media users dubbed it thus.

The truth is, U.S.-Saudi relationships have been on the rocks for some time, especially following the impending U.S. legislation that would implicate Saudi Arabia in the 9/11 terror attacks.

The bill, if passed, would allow 9/11 families and survivors to sue Saudi Arabia, bypassing its sovereign immunity.

But the legislation may also reap unintended consequences for the U.S. and global economies.

The Saudis have threatened economic retaliation if the bill passes. According to the New York Times, Saudi foreign minister Adel al-Jubeir said the kingdom would sell off $750 billion in U.S. Treasury debt and other assets.

Economic experts are divided on whether the sell-off would severely cripple the U.S. economy and whether the Saudis would even make good on their threat. Doing so may hurt Saudi Arabia, which is already struggling with low global oil prices.

According to CNN Money, Saudi Arabia is widely believed to be one of the biggest owners of U.S. debt, but exactly how much is not disclosed by either country.

The Saudi Central Bank holds $584 billion in foreign currency reserves, but it's unclear how much of it is from the U.S. Treasury.

Likewise, the U.S. Treasury doesn't disclose exactly how much debt Saudi Arabia holds, lumping its holdings together with other oil exporters at $281 billion.

"Dumping a huge amount of U.S. debt at one time would likely cause Treasuries to tank, potentially destabilizing financial markets," CNN reported.

But Fortune reports that there is little cause for concern. Far from being a favor to the U.S., significant debt holdings are sound and stable investments for Saudi Arabia, allowing the Saudi riyal to be pegged to the U.S. dollar.

And even if the Saudis did follow through with the sell-off, the U.S. Treasury could easily shake it off, according to Fortune.

Still, the Obama administration is taking Saudi threats seriously.

The administration has lobbied hard against the bill, even suggesting a presidential veto if it passes.

It could put the United States and our taxpayers and our service members and our diplomats at significant risk if other countries were to adopt a similar law, said White House spokesman Josh Earnest, Fortune reported.

Despite their growing ideological differences, the Saudi-American alliance remains important for both countries.

For example, even though the U.S. has increased domestic oil production and reduced foreign imports, Saudi Arabia remains the greatest importer of U.S. weaponry by far and currently has at least $100 billion worth of equipment on order.

The Saudis "just don't have alternatives to the U.S.," Hussein Ibish, senior resident scholar at the Arab Gulf States Institute, told CNN. "They can talk about Europe and China and Russia all they like, but in the end, its military is structured around the United States, and only the United States can provide the leadership they're looking for."