Trump made the remarks in an interview with CBS's "60 Minutes" set to be aired on Sunday.
The US president, however, stopped well short of blaming the Saudi monarchy for the disappearance of Khashoggi, who is suspected of being killed during a visit to the Saudi consulate in Istanbul on October 2.
He said that “we don’t know yet” if Khashoggi was murdered, but that the situation is “being looked at very very strongly.”
Trump on Thursday said he is not willing to throw away billions of dollars in military deals with Saudi Arabia over the suspected murder of Khashoggi.
“What good does that do us?” Trump asked. “This took place in Turkey and to the best of our knowledge, Khashoggi is not a United States citizen.”
Saudi Arabia is currently facing a growing chorus of criticism global leaders over the disappearance and alleged murder of Khashoggi inside Riyadh's consulate in Istanbul on October 2.
The 59-year-old Saudi journalist's disappearance and an explosive New York Times story alleging that he was dismembered inside the Saudi consulate, has raised concerns over the safety of Saudi dissidents inside the monarchy and abroad.
Khashoggi was known for his critical views on Riyadh. He lived in self-imposed exile in the US since September 2017, when he left Saudi Arabia amid a crackdown on dissident voices.
The New Yorker said in a recent article that the journalist had told it in August that he was worried about his life. Khashoggi also opposed Riyadh's aggression on Yemen.
In the latest interview, Trump was hesitant to draw a link between the Khashoggi controversy and a $110 billion arms deal with Riyadh.
“Everybody in the world wanted that order,” he said of the arms deal. “Russia wanted it, China wanted it, we wanted it. We got it… I don’t want to hurt jobs, I don’t want to lose an order like that. There are other ways of punishing.”
In recent days, Democrats and Republicans in Congress have said that if Saudi Arabia is behind the disappearance of Khashoggi, there should be severe consequences for the kingdom.
Trump said that Khashoggi “was a reporter, you’ll be surprised to hear me say that, there’s something really terrible and disgusting about that if that were the case.”
There is widespread speculation – specially among Turkish officials -- that Khashoggi has been assassinated by as many as 15 Saudi operatives who took him into the consulate. The journalist’s dismembered body is also reported to have been flown back to Saudi Arabia in two jets.
Adding another twist to the already complicated puzzle, The Washington Post reported Tuesday that Muhammad bin Salman had personally ordered the assassination.
This is while Riyadh had denied being behind Khashoggi’s disappearance. However, it has so far failed to provide any evidence to back its claims.