Biden’s Latest Gaffs Renew Concerns

After months of build-up, and at a critical time for geopolitical stability, key players in NATO will no doubt be disgruntled that the Summit in Washington has arguably been overshadowed by President Biden’s latest gaffs.

With world leaders from NATO’s 32 members gathering to mark 75 years of the Alliance, headlines this morning have centred President Biden introducing to the stage Volodymyr Zelensky as his “President Putin”.

Following the initial gaff, Biden then referred to his vice president Kamala Harris as “Vice President Trump” during a press conference.

The latest mishaps – and the way in which they are dominating international press headlines – will do little to assuage concerns over Biden’s prospects of winning the Presidential race.

According to CNN, former President Barack Obama has expressed worries about Joe Biden’s chances of re-election. This follows reports – as voiced on The Rest is Politics USA and cited in Politico – that Obama did not object to George Clooney’s Op-Ed in the New York Times, despite having known about it. As we looked at yesterday, Clooney’s fundraising events have helped raise tens of millions of dollars for the Democratic party and his wider influence is hard to understate.

Clooney’s comments that “the one battle [Biden] cannot win is the fight against time” come as senior democrats including Nancy Pelosi raise concerns over Biden. According to Politico’s Rachael Bade Pelosi “advised some Democrats in swing districts to do whatever they have to do to secure their own re-elections — even if it means asking Biden to relinquish his place atop the ticket.”

While the latest summit of the North Atlantic Treaty Organisation may have been overshadowed by airtime and columns on Biden, the meeting was highly consequential.

The Summit in Washington comes against the backdrop of the war in Ukraine, fragility in the middle east and increasingly shaky relationships with Beijing, over topics including Taiwan.

The summit thus aimed to “address the challenges facing the Alliance and further strengthen NATO’s deterrence and defence”.

Key takeaways from the Summit include: providing Kyiv with minimum of €40 billion in military aid over the course of the next year, taking a harder stance on China which it called a “decisive enabler” of the Kremlin’s war in Ukraine, and an agreement to enhance Integrated Air and Missile Defences.

Major players in NATO renewed calls on member states to ensure spending on defence meets the 2% of GDP target. The 2% defence investment guideline was put in place in 2006 to “continue to ensure the Alliance’s military readiness” but presently, it looks as though only 23 of the alliance’s 32 members will meet the target. (Though this is itself a considerable rise from just three countries which met the target in 2014). During the Summit, NATO Allies also agreed that at least 20% of their defence expenditure should be devoted to major new equipment.

According to The Economist for Example, European NATO members will spend some $380bn on defence – with the alliance expecting that at least 20% of member states’ budgets being put towards weapons. While this will mark an increase in spending as a whole, it is estimated that EU NATO member states have racked up a shortfall in spending of $600bn since 1991.

Following yesterday’s softer-than-expected US CPI print, today focus will turn to US PPI released at 13:30 ahead of the Michigan Consumer Sentiment Index released at 15:00 this afternoon. This comes as markets continue to speculate on when the Federal Reserve will make their first rate cut, with money markets implying that a 25bps cut is fully priced in by their 18 September meeting.