Trump defence spending plans will hit US fiscal limits

Significance President-elect Donald Trump plans to expand military spending as part of his "America First" foreign policy but has so far offered few details of how this expansion will be financed. The new budget will have significant commercial implications for private entities involved in US defence procurements and for Washington’s force posture abroad. Impacts Trump may focus on increasing US-based missile defence capabilities instead of regionally focused systems based overseas. Political complications over NATO deployments may ensue if US spending outstrips that of its allies. Expansion of the nuclear arsenal beyond current modernisation plans could spark an arms race with Washington’s rivals.

Significance Trump’s election has undermined the stability of the transatlantic partnership that for decades has been a central pillar of foreign policy for leading European countries and for the EU itself. Impacts Trump’s attacks on Germany’s trade surplus helped bring the issue to the fore and Berlin is likely to raise investment after the election. Merkel will seek to counter any claims from other parties that her pledge to raise defence spending implies subservience to Trump. EU leaders may highlight the role non-military spending plays in improving security to counter Trump's demands for higher defence spending.


Significance Biden and Republican President Donald Trump, seeking re-election, are already sparring over US-China policy; this and other differences over foreign policy will mark the candidates’ campaigning. Impacts Biden would reduce US tariffs on China, favouring more targeted tariffs, but still push for Chinese economic reform. He would increase US attention to the Asia-Pacific, and work with China on North Korean denuclearisation. The next president will likely have to trim US defence spending and commitments overseas. Biden will refer to the Obama administration’s record as evidence of his fitness to govern.


Subject US Taiwan policy. Significance US President-elect Donald Trump has suggested that Washington could fundamentally alter its policy on Taiwan, implying movement towards recognising Taipei as a sovereign state. The 'Taiwan issue' has little resonance in US politics but huge resonance for Beijing, whose top foreign policy priority is to prevent other governments from recognising Taiwan as a sovereign state and manoeuvre Taiwan into accepting full political unification with China. Impacts In attempting to influence US-Taiwan relations, Beijing will prefer to apply pressure on Taipei rather than Washington. China's leadership may feel they must take risks in order to mollify nationalist sentiment at home. Nothing at present suggests that war is a plausible scenario.


Significance Mattis’s launch speech is one of the first US foreign policy pronouncements of 2018, and since President Donald Trump’s administration released its NSS on December 18, 2017. NSS statements periodically detail the incumbent administration’s intended priorities and approach to foreign, defence and security policy. Impacts Trump’s administration will still need multilateral bodies in foreign policy, but friends and foes may reject ‘America First’. The administration will seek increased military spending, modernising forces and infrastructure, including the nuclear arsenal. Current congressional frictions over public spending could hinder increasing military spending. US focus on non-traditional security threats will grow, with new resources and strategic innovation needed.


Subject Russia's new foreign policy document. Significance A new foreign policy concept presents Russia as a nation facing a range of security threats but nevertheless willing to play a global role in a multipolar, chaotic and unpredictable world. Replacing the 2013 foreign policy concept, the document also attempts to assuage fears of Russian expansionist intent. Impacts Assumptions about the United States may change rapidly under President Donald Trump. Moscow will strengthen its foothold in Syria as a bargaining chip with the West and to show its resolve not to back down under pressure. Russia will refuse to relax control over Ukraine's eastern regions. Asian policy will consist partly of courting China and partly of seeking alliances to counterbalance this. Economic cooperation with Japan will be constrained by lack of a near-term deal on territorial issues.


Significance Since it began in March 2015, the many-sided conflict has become internationalised, following threats to the vital shipping artery in the Bab al-Mandab strait, through which trade worth 700 billion dollars per year passes between Europe and Asia. Previous ceasefires have not held. There is a looming humanitarian crisis. Unpaid public-sector workers are unable to buy food, boosting malnutrition rates. Impacts US President-elect Donald Trump is unlikely to take much interest in the Yemen conflict, leaving mediation to the UN and regional actors. The United Arab Emirates (UAE) will confront al-Qaida in the south of the country, but cannot extinguish its tribal support base. Hadi's vice-president, Ali Mohsen, an old enemy of the Huthis and former ally of Saleh, will be an important power broker.


Significance The Pakistan Muslim League-Nawaz (PML-N)’s five-year term ended on May 31. PML-N President Shehbaz Sharif faces a tough fight to become prime minister, with the main challenge set to come from Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) and further opposition provided by Bilawal Bhutto Zardari’s Pakistan Peoples Party (PPP). Impacts With Khan as prime minister, the military would likely have free rein to pursue an anti-India foreign policy. Khan would step up his criticisms of the war in Afghanistan and likely have a difficult relationship with US President Donald Trump. Pakistan under any government will pursue balanced diplomacy in the Middle East, seeking good ties with both Saudi Arabia and Iran.


Significance President Donald Trump said he dismissed Tillerson as he wants his cabinet to be more in line with his thinking; Trump and Tillerson had clashed over policies and priorities. CIA Director Mike Pompeo will be nominated to succeed Tillerson. The nominee to replace Pompeo at the CIA will be current CIA Deputy Director Gina Haspel. Impacts A better-coordinated foreign policy team could help Trump prepare for his new push on North Korea-US ties. Pompeo may find as secretary of state that he disagrees more openly with Trump; the CIA director is not public-facing. Conceivably, the 2018 midterm elections could further delay Trump nominees, but secretaries could work in an acting capacity.


Subject The State Department. Significance The US State Department’s third-ranking official and most senior career diplomat, Tom Shannon, announced his departure on February 1. While the 60-year old Shannon said he was stepping down for personal reasons, he is only the latest in a stream of senior career diplomats who have left since Donald Trump became president a year ago and appointed Rex Tillerson as secretary of state with a mandate to downsize the department. Impacts Minimising the benefits of diplomacy in favour of military action could exacerbate foreign policy crises and conflicts. White House heel-dragging on filling posts both 'streamlines' State and avoids congressional confirmation scrutiny of political nominees. Concerned that State wields little influence with the White House, Congress will be more assertive in the foreign policy process. Other powers -- particularly US allies -- will seek and have increased direct influence on the White House, cutting out State.


Significance The speech set out the government’s economic policy guidelines for the remainder of 2020 and 2021, largely extending the package of fiscal measures in place since April 2020. Mitsotakis also announced the start of a new investment cycle in national defence, in response to rapidly deteriorating relations with Turkey. Impacts The latest stimulus package will widen the 2020 primary budget deficit to about 3.5% of GDP. The announced increase in military spending is fuelling fears among the public of an arms race with Turkey. The rise in defence expenditure will divert public investment into economically unproductive ends.


Sign in / Sign up

Export Citation Format

Share Document