Concern over debt limit talks follows Biden to Group of 7 meeting in Japan
Hiroshima, Japan CNN —
President Joe Biden faces his fellow world leaders Friday in Japan under the shadow of a looming default on US debt, a scenario his advisers said risks subverting American leadership and sending the global economy into tailspin.
The risk appears particularly acute as Biden works to rally fellow Group of 7 officials behind a shared approach toward Russia and China. On the first day of the summit talks, the group is planning to unveil a new tightening of sanctions on Moscow – a response to the invasion of Ukraine that relies on the strength of the American financial system.
The dangers of failed diplomacy will be placed into sharp relief when leaders lay a wreath at the Hiroshima Peace Memorial,the epicenter of the American atomic bomb dropped here in 1945 that wiped out the city and more than 100,000 of its inhabitants while hastening the end of World War II.
How much the debt standoff arises in Biden’s talks in Hiroshima remains to be seen; some European officials said they had been down similar roads before as American presidents worked to avert financial disaster only to find a solution at the last moment.
But even if it does not arise substantially in the many hours of leaders’ meetings spanning the next three days, the risk of default remains the backdrop against which Biden will attempt to project strength this week in Japan.
“Debt ceiling brinkmanship that Republicans are driving in Washington, DC, undermines American leadership, undermines the trustworthiness that America can bring to not just our allies and partners but to the rest of the world,” a senior administration official said as Biden began the high-stakes G7 summit.
Biden cut his trip to Asia short to return to Washington early as negotiations continue over raising the US borrowing limit ahead of June 1, the earliest date by which the country could run out of cash to pay its bills.
An extensive agenda of issues, including Ukraine, China and artificial intelligence, are all up for discussion. But it was clear from Biden’s decision to cancel planned stops in Australia and Papua New Guinea that other matters are weighing on the US president’s time.
To that end, Biden brought with him to Japan a top domestic policy aide, Bruce Reed, to keep him continually updated on the status of talks between White House aides and congressional Republicans.
Just the threat of default has the potential to weaken American diplomatic authority, the official said, citing a sanctions regime on Russia that relies on the strength of the US financial system.
“All of those things reduce America’s capacity to lead,” the official said.
Biden’s meetings with fellow leaders in Hiroshima will present “an opportunity to highlight just how essential it is that that the Republicans work to get this done expeditiously with the president, because a lot is riding on ensuring that the United States continues to to lead and lead alongside the G7.”
Nowhere is that more evident than Russia’s ongoing war in Ukraine, which will be a key topic of discussion for the world leaders Friday as they are set to unveil new, coordinated sanctions aimed at showing G7 nations’ unity and support for Ukraine.
“All G7 members are preparing to implement new sanctions and export controls,” the senior official said, framing the US package of sanctions as “substantial.”
The US will tighten export controls, including by “extensively restricting categories of goods key to the battlefield,” and will announce nearly 300 new sanctions against “individuals, entities, vessels, and aircraft.”
Additionally, the US will place new designations across Europe, the Middle East and Asia, and expand its sanctions authorities to further target Russia’s economy.
The official previewed a five-pronged plan of new steps G7 nations are taking more broadly to further economically isolate Russia, including efforts to disrupt Russia’s ability to source inputs for its war and to close loopholes that have allowed certain Russian entities to evade existing sanctions.
The sanctions come 14 months after Russia launched its invasion and as Ukraine prepares for a counteroffensive using billions of dollars in Western military aid.
Biden and fellow leaders were planning to discuss how much progress has been made on the battlefield, with an eye toward helping Ukraine regain territory and assume leverage in potential peace talks.
While the US remains Ukraine’s largest contributor of military assistance, some leaders have begun calling for ever-more-advanced weapons, including fighter jets, to send Kyiv. Biden has resisted those calls as he works to prevent an escalation.
Source: CNN
