"The world is a very dangerous place!", Mr Trump states, before holding up Saudi Arabia as an ally of the US against Iran.
The kingdom spent "billions of dollars in leading the fight against Radical Islamic Terrorism" whereas Iran has "killed many Americans and other innocent people throughout the Middle East", it says.
The statement also stresses Saudi investment pledges and arms purchases. "If we foolishly cancel these contracts, Russia and China would be the enormous beneficiaries," it adds.
While admitting the murder of Jamal Khashoggi was "terrible", Mr Trump wrote that "we may never know all of the facts" about his death.
"The United States intends to remain a steadfast partner of Saudi Arabia to ensure the interests of our country, Israel and all other partners in the region."
Mr Trump later said he would meet Mohammed bin Salman at a G20 meeting in Argentina next week if the crown prince attended.
Secretary of State Mike Pompeo has backed his president, saying after talks with Turkish Foreign Minister Mevlut Cavusoglu that "it's a mean, nasty world out there" and that Mr Trump was "obliged to adopt policies that further America's national security".
Mr Cavusoglu said that co-operation with Saudi Arabia on the issue was "not where we want it".
In a statement, Democratic Senator Dianne Feinstein said she was shocked the president was not going to punish Mohammed bin Salman over the "premeditated murder" of Khashoggi.
The essence of America First
By Anthony Zurcher, BBC senior North America reporter
Donald Trump is a different kind of president, and nowhere is that more clear than in his foreign policy, exclamation points and all. His release on the death of Jamal Khashoggi is remarkable for many reasons, and not just its blunt language.
The president quickly tries to change the subject to Iran. He dismisses reports that Mohammed bin Salman ordered the murder with a maybe-he-did, maybe-he-didn't shrug. He cites the economic impact of $450bn in investment and arms sales to the Saudis, although much of that is little more than paper promises.
Perhaps most jarring is his casual observation that the Saudis viewed Khashoggi - a permanent US resident - as an "enemy of the state" with ties to the Muslim Brotherhood.
Mr Trump has distilled his "America First" worldview down to its very essence. Morality and global leadership take a back seat to perceived US economic and military security.
What the take-away will be in the Middle East and beyond is a serious issue, says BBC diplomatic correspondent Jonathan Marcus.
US policy in the region is so closely aligned with that of two key individuals - Mohammed bin Salman in Saudi Arabia and PM Benjamin Netanyahu in Israel - that it is increasingly hard to see how the US can play a role as an independent arbiter, our correspondent says.
Mr Trump's narrow, interests-based approach will further dismay Washington's allies in the West, he argues, reinforcing those in Moscow and Beijing who are already applying a "Russia First" and a "China First" approach in international affairs.
Iranian Foreign Minister Javad Zarif tweeted his disgust at the Trump statement, calling it disgraceful: