Could Trump tariffs spell DOOM for Neom? Cost of Saudi’s barmy mega-city rockets 20-fold amid scandals & shrinking scale
DONALD Trump’s sweeping new tariffs could be the final nail in the coffin for Saudi Arabia’s Neom.
The wildly ambitious, scandal-plagued mega-city is now hurtling toward financial meltdown — with a projected price tag of £6.9trillion ($8.8tn).
Neom was originally hyped as a £396.5 billion ($500bn) crown jewel of Crown Prince Mohammed bin Salman’s Vision 2030 plan.
It was supposed to be the futuristic city of dreams.
But flying taxis, ski resorts in the desert, and the 105-mile (170-kilometre) mirrored metropolis The Line is currently looking more like a monument to hubris, mismanagement, and economic overreach.
And Trump’s tariffs are making things a whole lot worse.
While headlines have focused on new US-Saudi trade tensions, experts say it’s not just direct tariffs in play – it’s every single part of the global supply chain for Neom that touches the United States.
With the US president slapping hefty levies on China and other major trading partners, components and materials moving through American ports are being hit with multiple rounds of tariffs – choking Neom’s already sputtering logistics.
Last week, oil prices plunged 11 per cent after Trump’s tariff threats triggered a global stock market selloff.
Brent crude tumbled to £50.90 ($64.21) a barrel, while West Texas Intermediate fell to £48.12 ($60.70) – levels not seen since 2021.
For oil-dependent Saudi Arabia, that spells deep trouble.
“Non-oil revenue has risen, but spending has risen more quickly as the kingdom has stepped up its development plans,” warned Simon Williams, HSBC’s chief economist for the Middle East.
“That inevitably means the budget is more oil-revenue reliant than it has been in the past.”
Now Saudi Arabia, with its wealth inextricably linked to oil revenues, faces mounting pressure to raise debt or cut spending after the plunge in crude prices.
Tariffs up, oil down, soaring costs
Neom’s skyrocketing costs have already raised eyebrows.
According to a bombshell audit seen by the Wall Street Journal, the anticipated cost has surged twentyfold to £6.9trillion ($8.8tn), New Civil Engineer reports.
The internal audit – backed by McKinsey & Co. – found that “executives at Neom based Neom’s business plan on unrealistically positive assumptions” and uncovered “evidence of deliberate manipulation” by “certain members of management.”
With oil revenues tanking and Trump’s tariffs squeezing the global economy, the House of Saud is now facing a budgetary black hole.
Economists at Abu Dhabi Commercial Bank warned: “A sharper and sustained fall in the oil price would require a deeper retrenchment in government spending to contain the size of the shortfall and the building in government debt.”
Saudi Arabia is already staring down a £20.62billion ($26bn) budget deficit for 2025 and has raised £14.59 billion ($18.4bn) in debt so far this year.
But even that won’t come close to covering Neom’s ballooning bill.
The Saudi sovereign wealth fund – the project’s primary backer – has £733.52 billion ($925bn) in assets.
But with a GDP of £872.3 billion ($1.1tn) and oil accounting for over 60 per cent of government revenue, the numbers no longer add up.
A scandal-ridden project
Satellite images analysed by Naraspace and ESA show construction slowing across key Neom sites.
While the Hidden Marina and wind farms near The Line show some signs of life, vast swathes of the project are going dark – literally.
Nighttime light intensity, used as a proxy for construction activity, has plummeted in the eastern development zones since last September.
Bloomberg reports Saudi officials now believe just 2.4 kilometres of the 170-km Line will be built by 2030.
The original goal of housing 1 million people by then? Slashed to 300,000.
Civil engineering firms involved – including Mott MacDonald, Bechtel, and Aecom – have gone quiet.
Even when awarded contracts, many didn’t publicly acknowledge them.
The Neom project has also been dogged by scandals and controversy.
An ITV documentary alleged 21,000 migrant workers have died since 2016 under the Vision 2030 programme.
A Saudi health and safety body dismissed the documentary as “misinformation.”
In November 2024, CEO Nadhmi Al-Nasr was abruptly sacked amid damning reports of abusive behaviour.
According to the Wall Street Journal, Al-Nasr once told a colleague to “walk into the desert to die” so he could “urinate on his grave.”
He also allegedly threatened to shoot staff over a PR mishap.
Employees have also reported alleged incidents of rape, attempted murder and drug crimes riddling the hellish migrant camps for construction workers.
A Neom mirage
For now, Saudi Arabia insists Neom is simply entering “a new phase of delivery.”
But the facts suggest otherwise.
With crude prices low, foreign investment shrinking, and the US waging a new tariff war, the financial foundation of the desert dream is evaporating.
Aramco, the kingdom’s oil cash cow, just slashed dividends by nearly a third – down from £98.41 billion ($124bn) to £67.72 billion ($85.4bn).
The final vision of a clean, green, high-tech wonderland where residents zip between mirrored towers in air taxis is starting to look more like science fiction than reality.
And if Trump’s tariff war continues to spiral, Neom could be dead in the sand before it’s even begun.
Top 5 blunders plaguing NEOM project
BY Juliana Cruz Lima, Foreign News Reporter
Saudi Arabia’s NEOM project, despite its ambitious vision, has been criticized for several major blunders that have raised concerns about its feasibility, ethics, and overall execution.
Here are the top five major blunders associated with the project:
Forced Displacement of Indigenous Communities: One of the most significant controversies surrounding NEOM is the forced displacement of the Huwaitat tribe.
This indigenous community, which has lived in the area for centuries, was forcibly removed from their ancestral lands to make way for the development of the mega-city.
The Saudi government’s crackdown on those who resisted, including the killing of a tribal leader, Abdul Rahim al-Howeiti, has drawn widespread condemnation from human rights organisations.
This blunder not only sparked international outrage but also tainted NEOM’s image as a forward-thinking, humane project.
Environmental Impact and Sustainability Concerns: NEOM has been marketed as an environmentally sustainable city, but the environmental impact of such a massive development is a major concern.
The project’s scale—covering over 26,500 square kilometers—poses significant risks to local ecosystems, particularly in the Red Sea, which is home to rich marine biodiversity.
Critics argue that the construction of artificial islands and extensive urbanisation could lead to irreversible ecological damage.
The enormous water and energy demands required to maintain a green city in the desert also raise questions about the project’s sustainability.
Economic Viability and Cost Overruns: NEOM is one of the most expensive development projects in history.
But there are serious doubts about its economic viability. Critics question whether the project can attract the necessary foreign investment and whether it will generate sufficient returns to justify the enormous expenditure.
The economic risks are further compounded by potential cost overruns and delays, which are common in megaprojects of this scale.
This financial gamble has led some to worry that NEOM could become a costly white elephant if it fails to meet its ambitious goals.
Technological Overreach and Ethical Concerns: NEOM is envisioned as a high-tech city, heavily reliant on artificial intelligence, robotics, and extensive surveillance systems.
While this technological ambition is central to NEOM’s identity, it also raises significant ethical concerns. The level of surveillance planned for the city could lead to unprecedented control over residents’ lives, sparking fears about privacy and civil liberties.
The lack of transparency about how AI will be used, coupled with concerns about job displacement, has also led to criticism that NEOM’s technological vision may be more dystopian than utopian.
Cultural and Social Disconnect: NEOM’s vision of a futuristic, liberalized society clashes sharply with Saudi Arabia’s deeply conservative cultural norms.
The project plans to introduce mixed-gender sports, entertainment events, and other liberal lifestyle elements that are rare in the kingdom.
This cultural shift has raised concerns about a potential clash between NEOM’s globalised vision and the traditional values of Saudi society.
The disconnect between the project’s ambitions and the broader cultural context has led to skepticism about whether NEOM can truly integrate into Saudi Arabia’s social fabric without causing significant friction.