The killing of Khashoggi, a Saudi citizen who had been living in Virginia and who wrote columns for the Washington Post, has become one of the most consequential foreign policy crises of Trump's presidency.
Some of Trump's advisers have warned him that if he lets the Saudis get away with such a barbaric extrajudicial killing with impunity, the Saudis would not respect him as a strong leader - nor would other authoritarian regimes around the world, including North Korea and Iran.
Senator Lindsey Graham, (R), a Trump ally who has discussed the matter with him privately, said it is incumbent upon the President to "send a clear signal to the Middle East that there's a new sheriff in town".
"This is one of the most important moments of his presidency," Graham said. "He has to lead from the front. He has to be the one to make the case above all others that this is unacceptable and that our values are the underpinning of our foreign policy."
For now, at least, Trump has opted to preserve his personal relationship with the Saudi leadership because he argues it pays long-term dividends to the US in the form of arms sales.
Trump has said there would be "severe punishment" if the Saudis are found responsible for Khashoggi's killing, but has not followed through with any punishment.
Indeed, he has rejected calls from leaders in Congress to sanction the kingdom or stop its promised purchases of US weaponry. "Then all they'll do is go to Russia or go to China," Trump told the Post. "All that's doing is hurting us."
The result, foreign policy experts say, is an abdication of America's historic role as a global beacon of morality and human rights. Instead, Trump is pursuing a foreign policy shaped by commercial self-interest.
"This will reinforce the sense around the world that this is a different America, that we've become just like everybody else. We, too, are running a foreign policy not based on principles or values," said Richard Haass, chairman of the Council on Foreign Relations.
"This combination of amorality and commercialism is Chinese foreign policy - unconditional economic pursuits - and suddenly it's become American foreign policy."
Trump has long been obsessed with appearing strong, and likes to attack his enemies as weak. One of his favourite put-downs is accusing foes of "crying like a baby," and he has used the imagery of babies a number of times recently.
When a reporter asked Trump a few days ago for evidence supporting his claim that hardened criminals were crossing the border, the President replied, "Oh, please, please, don't be a baby."
And on CBS' 60 Minutes, when Lesley Stahl recounted North Korean dictator Kim Jong Un's human rights record, Trump said, "I'm not a baby. I know these things."
Foreign policy analysts said Kim, Russian President Vladimir Putin and other authoritarians around the world likely are studying how Trump handles the Khashoggi episode to gauge America's will to retaliate against human rights atrocities.
But while other leaders may see Trump as weak, the President may view himself as strong for protecting his investment in Saudi Arabia, according to David Axelrod, a White House strategist under Obama.
"He may view strength as being willing to stand up to the disapprobation of the world with an ally who he thinks might be useful," Axelrod said.
"That I think is how he describes strength. Kim Jong Un is the worst human rights violator in the world. He killed his own brother. And Trump loves him because he thinks he's going to get something out of it."
Axelrod continued by explaining that Trump "thinks strength is, are you shrewd? Do you get something out of the deal? To him that's smart and that's strong."
Some of the President's outside advisers agree.
Retired Harvard Law School professor Alan Dershowitz, who speaks frequently with Trump about the Middle East, said that while the President needs to take a tougher stand with the Saudis, he should not jeopardise his relationship with the kingdom over Khashoggi's killing.
"The President sees strength as having enormous influence over events," Dershowitz said. "He can't terminate the Saudi relationship. That would not be a show of strength."
Trump has complicated feelings towards the Middle East and advisers say he does not possess a deep understanding of the region, though he is generally wary of any engagement.
On one hand, Trump has called former President George W. Bush's wars in Iraq and Afghanistan among the biggest presidential blunders in history.
Yet he also has criticised Obama for not retaliating against Syria after Bashar al-Assad crossed Obama's "red line" by using chemical weapons.
One of Trump's motivations to protect the Saudis is the kingdom's position as a bulwark against Iran, a point he has stressed in private deliberations but has raised only sporadically publicly.
"I think it's a very important ally for us. Especially when you have Iran doing so many bad things in the world, it's a good counterbalance to the world," Trump said of Saudi Arabia in the Post interview. "They're probably laughing at this situation as they see it. Iran is as evil as it gets."
But Graham said it's incumbent on the US to not allow the value of strategic alliances to outweigh all other concerns.
"It's equally important to understand that our values are more important than money and jobs," he said.
"One thing we don't want to do is lose our moral voice. That's more important to the world than anything. We're not the policeman of the world, but we're the glue that holds it together."
Senate Foreign Relations Committee Chairman Bob Corker, (R), agreed, saying on CNN, "What we don't want is a ruler that's going to be around for 40 or 50 years going around the world continuing to conduct operations like this. And so, collectively, we have got to deal with this in an appropriate way."
After providing contradictory accounts of Khashoggi's disappearance for two straight weeks, the Saudi kingdom late last week claimed that the journalist was killed after a fistfight escalated inside the consulate in Istanbul and absolved Mohammed of responsibility.
But the Saudi explanation was met with immediate scepticism and condemned as a whitewash because it contradicted accounts from Turkish officials that a team of 15 Saudi agents - some of whom are close associates of Mohammed - flew to Istanbul and killed and dismembered Khashoggi.
"It's insulting to anyone who's analysing this with any kind of intelligent background to think that, oh, a fistfight led to a dismemberment with a bone saw," Senator Rand Paul, (R), said on Fox News Sunday.
Trump has been reluctant to publicly challenge the Saudi account, but made it clear in the interview with the Post that it strains credulity.
"Obviously there's been deception, and there's been lies," the President said.
Still, Trump refused to assign blame to Mohammed.
"Nobody has told me he's responsible," he said.
"Nobody has told me he's not responsible. We haven't reached that point ... I would love if he wasn't responsible."
