by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
IT’S NO SECRET that Joe Biden’s advisers cringe when the boss meets with the press; Biden unscripted is a verbal mine field. And so it was overnight, as the president diverged from his pro-trade message in Asia with comments on Taiwan that required an immediate White House clarification.
ONCE AGAIN, BIDEN HAS SEEMINGLY REJECTED his staff’s pleas that he stick with the carefully nuanced U.S. assertion of a “strategic ambiguity” on Taiwan. Biden indicated this morning that he would use the U.S. military if Beijing ever attacks Taiwan, which is not the official U.S. stance.
BIDEN SUGGESTED that he would be willing to go further on behalf of Taiwan than he has in helping Ukraine, the New York Times reports this morning. Biden said the U.S. had previously made a commitment to intervene military if China attacked Taiwan, but in fact Washington has never been so explicit.
BIDEN’S AIDES SCRAMBLED TO CLARIFY his comments, which they did earlier this year after he made a similar assertion. Biden seemed to indicate last night that the U.S. would respond militarily to any invasion — perhaps even more aggressively than Washington’s response to the Russian invasion of Ukraine.
THIS PROMPTED AN IMMEDIATE CONDEMNATION FROM CHINA that Biden is rhetorically reckless, and it scrambled what was looking like a relatively successful trip that bolstered U.S. trade ties and improved relations with South Korea. Now the trip will be remembered for Biden’s misstatement of U.S. policy — still another un-forced error by a president who is dangerous when he’s unscripted.
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FOR THE FIRST TIME IN WEEKS, there’s a glimmer of hope that negotiations could resume between Ukraine and Russia on a possible cease-fire. President Volodymyr Zelensky said over the weekend that negotiations eventually will end the war; his demand for talks are that no captured Ukrainian troops are mistreated, and that the Ukrainian-Russia border must be returned to its pre-war status.
THE LATTER is a non-starter for Moscow. Its troops now control much of the eastern Donbas region, with just one major city left to fall — Severodonetsk — one of the last areas of the eastern Luhansk region still in Kyiv’s control, with a high-ranking Ukrainian official stating that the city is becoming “a new Mariupol.”
TWO OF RUSSIA’S GOALS, the capture of the Donbas region and control over the Black Sea, are close to being realized. The cost has been enormous — at least 25,000 Russian troops killed, another 50,000 wounded or captured, and at least a third of its tanks, helicopters and military equipment ruined. Ukraine’s losses also are mounting, with hundreds of its soldiers killed every week.
ZELENSKY IS CORRECT — negotiations are inevitable. But a truce doesn’t seem to be imminent — and it may not be until both sides realize that “winning” this war is virtually impossible. Eventually there will be a deal, with new borders and security assurances, but a deal may not come until thousands of more troops are killed.
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This post was first published at the AGF Perspectives Blog.