Washington’s robust spending in response to the coronavirus crisis is helping to pull the United States out of its sharpest economic slump in decades, funneling trillions of dollars to Americans’ checking accounts and to businesses.
Now, the rest of the world is expected to benefit, too.
Global forecasters are predicting that the United States and its record-setting stimulus spending could help to haul a weakened Europe and struggling developing countries out of their own economic morass, especially when paired with a rapid vaccine rollout that has poised the U.S. economy for a faster recovery.
As Americans buy more, they should spur trade and investment and invigorate demand for German cars, Australian wine, Mexican auto parts and French fashions.
The anticipated economic rebound in the United States is expected to join China’s recovery, adding impetus to world output. China’s economy is forecast to expand rapidly this year, with the International Monetary Fund predicting 8.1 percent growth. That is good news for countries like Germany, which depends on Chinese demand for cars and machinery.
just begun to push infections higher in the United States — and a large policy response, including more than $5 trillion in debt-fueled pandemic relief spending passed into law over the past 12 months. Those trends, paired with the accelerating spread of effective vaccinations, seem likely to leave the American economy in a stronger position.
“When the U.S. economy is strong, that strength tends to support global activity as well,” Jerome H. Powell, the chair of the Federal Reserve, said at a recent news conference.
A year ago, it was not at all certain that the United States would gain the strength to help lift the global economy.
International Monetary Fund forecast in April 2020 that the U.S. economy might expand by 4.7 percent this year, roughly in line with forecasts for Europe’s growth, following an expected slump of 5.9 percent in 2020. But the actual contraction in the United States was smaller, and in January, the I.M.F. upgraded the outlook for U.S. growth to 5.1 percent this year, while the euro area’s expected growth was marked down to 4.2 percent.
I.M.F. has signaled that the estimates for the country’s growth will be marked up further when it releases fresh forecasts on April 6.
The recent relief package continues a trend: America has been willing to spend to combat the pandemic’s economic fallout from the start.
America’s initial pandemic response spending, amounting to a little less than $3 trillion, was 50 percent larger, as a share of G.D.P., than what the United Kingdom rolled out, and roughly three times as much as in France, Italy or Spain, based on an analysis by Christina D. Romer at the University of California, Berkeley.
Among a set of advanced economies, only New Zealand has borrowed and spent as big a share of its G.D.P. as the United States has, the analysis found.
In Europe, where workers in many countries were shielded from job losses and plunging income by government furlough programs, the slow pace of the European Union’s vaccination campaign will probably hurt the economy, said Ludovic Subran, the chief economist of German insurance giant Allianz.
On Wednesday, France announced its third national lockdown as infected patients fill its hospitals.
Mr. Subran also questioned whether the European Union can distribute stimulus financing fast enough. The money from a 750 billion euro, or $880 billion, relief program agreed to by European governments last July has been slow to reach the businesses and people who need it because of political squabbling, creaky public administration and a court challenge in Germany.
administered only about 1 vaccine dose per 1,000 people, if that, based on New York Times data. In the United States, the rate is more than 400 doses per 1,000 people.
Still, a booming American economy poses some hazard to other nations — and especially emerging markets — as economic fates diverge.
Market-based interest rates in the United States are already climbing, as investors, sensing faster growth and quicker inflation around the corner, decide to sell bonds. That could make financing more expensive around the globe: If investors can earn higher rates on U.S. bonds, they are less likely to invest in foreign debt that offers either lower rates or higher risk.
If the United States lures capital away from the rest of the world, “the rose-colored view that we are helping everyone is very much in doubt,” said Robin Brooks, chief economist at the Institute of International Finance.
trade tensions with Europe, which the Trump administration treated like an adversary. President Biden met online with European leaders last week.
The U.S. stimulus packages “will be part of the water that lifts all boats,” Selina Jackson, senior vice president for global government relations and public policy at consumer products company Procter & Gamble, said during a recent panel discussion organized by the American Chamber of Commerce to the European Union. “We are hoping for a calm slide out of this economic situation.”
Keith Bradsher contributed reporting.
WASHINGTON—President Biden has directed the Pentagon to begin removing some military capabilities and forces from the Gulf region in the first steps of an effort to realign the U.S. global military footprint away from the Mideast, changes that come as Saudi Arabia endures rocket and drone attacks from inside Yemen and Iraq.
In moves that haven’t been previously reported, the U.S. has removed at least three Patriot antimissile batteries from the Gulf region, including one from Prince Sultan Air Base in Saudi Arabia, that had been put in place in recent years to help protect American forces.
Some capabilities, including an aircraft carrier and surveillance systems, are being diverted from the Middle East to answer military needs elsewhere around the globe, according to U.S. officials. Other reductions are under consideration, officials said.
The removal of Patriot batteries, the permanent aircraft-carrier presence and other military capabilities means that several thousand troops may leave the region over time. As of late last year there were about 50,000 troops in the region, down from a high of about 90,000 at the height of tensions between the Trump administration and Iran about two years ago.
Defense officials declined to provide specifics about the reductions in military capabilities or forces. Saudi officials didn’t respond to a request for comment about the U.S. plans.
President Biden wants to forge an “alliance of democracies.” China wants to make clear that it has alliances of its own.
Only days after a rancorous encounter with American officials in Alaska, China’s foreign minister joined his Russian counterpart last week to denounce Western meddling and sanctions.
He then headed to the Middle East to visit traditional American allies, including Saudi Arabia and Turkey, as well as Iran, where he signed a sweeping investment agreement on Saturday. China’s leader, Xi Jinping, reached out to Colombia one day and pledged support for North Korea on another.
Although officials denied the timing was intentional, the message clearly was. China hopes to position itself as the main challenger to an international order, led by the United States, that is generally guided by principles of democracy, respect for human rights and adherence to rule of law.
John Delury, a professor of Chinese studies at Yonsei University in Seoul, said of China’s strategy.
As result, the world is increasingly dividing into distinct if not purely ideological camps, with both China and the United States hoping to lure supporters.
geopolitical competition between models of governance. He compared Mr. Xi to the Russian president, Vladimir V. Putin, “who thinks that autocracy is the wave of the future and democracy can’t function” in “an ever-complex world.”
He later called the challenge “a battle between the utility of democracies in the 21st century and autocracies.”
declared a genocide.
quashing of dissent in Hong Kong, from Saudi Arabia’s crown prince, Mohammed bin Salman, though a Saudi statement did not mention Xinjiang.
China’s most striking alignment is with Russia, where Mr. Putin has long complained about American hegemony and its use — abuse, in his view — of the global financial system as an instrument of foreign policy.
The Russian foreign minister arrived in China last Monday railing about American sanctions and saying the world needed to reduce its reliance on the U.S. dollar.
China and Russia have drawn closer especially since Mr. Putin’s annexation of Crimea in 2014 was met with international outrage and Western penalties. While the possibility of a formal alliance remains remote, the countries’ diplomatic and economic ties have deepened in common cause against the United States. So have strategic ties. The People’s Liberation Army and the Russian military now routinely hold exercises together and have twice conducted joint air patrols along Japan’s coast, most recently in December.
The two countries announced this month that they would build a research station on the moon together, setting the stage for competing space programs, one led by China and the other by the United States.
“The latest steps and gestures by the Biden administration, seen as hostile and insulting by the Russian and Chinese leaders, have predictably pushed Moscow and Beijing even deeper into a mutual embrace,” said Artyom Lukin, a professor of international studies at the Far Eastern Federal University in Vladivostok, Russia.
report on human rights in the United States on Wednesday, using as an epigraph George Floyd’s plea to the police, “I can’t breathe.”
“The United States should lower the tone of democracy and human rights and talk more about cooperation in global affairs,” Yuan Peng, president of the China Institutes of Contemporary International Relations, a government think tank, wrote the same day.
From that perspective, Mr. Xi’s outreach to North Korea and Mr. Wang’s visit to Iran could signal China’s interest in working with the United States to resolve disputes over those two countries’ nuclear programs.
Mr. Biden’s administration may be open to that. After the Alaska meetings, Secretary of State Antony J. Blinken mentioned both as potential areas where “our interests intersect” with China’s.
sealed trade and investment agreements, including one with the European Union, hoping to box out Mr. Biden.
It didn’t work. The first results of Mr. Biden’s strategy emerged last week, when the United States, Canada, Britain and the European Union jointly announced sanctions on Chinese officials over Xinjiang. China’s condemnation was swift.
“The era when it was possible to make up a story and concoct lies to wantonly meddle in Chinese domestic affairs is past and will not come back,” Mr. Wang said.
China retaliated with sanctions of its own against elected officials and scholars in the European Union and Britain. Similar penalties followed Saturday on Canadians and Americans, including top officials at the United States Commission on International Religious Freedom, a government body that held a hearing this month on forced labor in Xinjiang. All affected will be barred from traveling to China or conducting business with Chinese companies or individuals.
Theresa Fallon, director of the Center for Russia Europe Asia Studies in Brussels, said China’s sanctions on Europeans were an overreaction that would drive officials into an anti-China camp.
They could also jeopardize China’s investment deal with the European Union, as many of those penalized are members of the European Parliament, whose approval is required. So could new campaigns by Chinese consumers against major Western brands like H & M and Nike.
Until now, many European Union nations have not wanted to explicitly choose sides, eschewing the kind of bipolar ideological divisions seen during the Cold War, in part because of deepening economic ties with China.
With each new twist in relations, however, clearer camps are emerging. “The Chinese mirror all the time,” Ms. Fallon said. “They always accuse people of Cold War thinking because I think that’s really, deep down, how they think.”
Chris Buckley contributed reporting, and Claire Fu contributed research.
WASHINGTON — As President Biden signaled this week that he would let a May 1 deadline pass without withdrawing American troops from Afghanistan, some officials are using an intelligence assessment to argue for prolonging the military mission there.
American intelligence agencies have told the Biden administration that if U.S. troops leave before a power-sharing settlement is reached between the Taliban and the Afghan government, the country could fall largely under the control of the Taliban within two or three years after the withdrawal of international forces. That could potentially open the door for Al Qaeda to rebuild its strength within the country, according to American officials.
The classified assessment, first prepared last year for the Trump administration but not previously disclosed, is the latest in a series of grim predictions of Afghanistan’s future that intelligence analysts have delivered throughout the two-decade-long war.
But the intelligence has landed in a changed political environment. While President Donald J. Trump pushed for a withdrawal of all forces even before the terms of the peace deal required it, Mr. Biden has been more cautious, saying Thursday that he does not view May 1 as a deadline he must meet, although he also said he “could not picture” troops being in the country next year.
has been said to have privately described as haunting the possibility of allowing the country to descend into collapse.
Some senior Biden administration officials have expressed skepticism of any intelligence prediction of a resurgence of a weakened Al Qaeda or of the Islamic State. Taliban commanders remain opposed to the Islamic State in Afghanistan, and Al Qaeda, which has little current presence in the country, could regroup instead in any number of other lawless regions around the world.
Also left unanswered by the intelligence warning is the question of whether Afghanistan could really prosper if American troops remain indefinitely. Their presence would most likely prevent a collapse of the nation’s own security forces and allow the government in Kabul, the Afghan capital, to retain control of its major cities, but the Taliban are still likely to gradually expand their power in other parts of the country, including curbing the rights of women.
A Taliban spokesman said on Friday that the group was committed to last year’s peace agreement “and wants the American side to also remain firmly committed.” If troops are not withdrawn by May 1, the spokesman promised, the Taliban would “continue its jihad and armed struggle against foreign forces.”
Biden administration officials insisted no final decision had been made. Nevertheless, with the deadline looming, administration officials are jockeying to influence Mr. Biden and his top national security officials. While Lloyd J. Austin III, the secretary of defense, has not signaled what course of action he prefers, some Pentagon officials who believe American forces should stay longer have pointed to the intelligence assessment predicting a Taliban takeover of the country.
approximately 3,500 American troops who remain, whether it is May 1 or at the end of the year, will doom the mission. The only way to preserve hard-fought gains in Afghanistan, they said, is to keep the small American presence there long enough to force a lasting deal between the Taliban and Afghan government.
These officials have used the intelligence assessment to make the point that a withdrawal this year will lead to a fall of the current government, a sharp erosion of women’s rights and the return of international terrorist groups. A rush to the exit, some officials said, will only drag the United States back into Afghanistan soon after leaving — much as was the case in Iraq in 2014, three years after the Obama administration pulled troops out of that conflict.
The White House has held a series of meetings on Afghanistan, and more are to come. On Thursday, the president said he was waiting for briefings from Mr. Austin, who met recently with Afghan officials, and Secretary of State Antony J. Blinken, who conferred this week with NATO allies, for their bottom-line advice on what he should do.
For many Biden administration officials, the issue that has resonated the most clearly is the threat that a Taliban takeover could pose to Afghan women. While some former intelligence officials predict the Taliban will initially take care not to roll back women’s rights altogether — at least in major cities — if they take over the entire country, it will be difficult to guarantee protections for women, such as education for girls and access to health care.
“Any agreement must preserve their gains if Afghanistan wants to ensure the international community’s continued political and financial support,” Linda Thomas-Greenfield, the U.S. ambassador to the United Nations, told the Security Council this week. “We will not give an inch on this point.”
The Biden administration is making a final effort before May 1 to show progress in slow-moving negotiations between the Taliban and the Afghan government in Doha, Qatar. The Taliban, according to American officials, are stalling.
The administration is pushing the two sides to participate in a peace conference in Turkey to demonstrate progress. Simultaneously, the American and Taliban negotiators continue to try to cement a 90-day reduction in violence, but so far, both sides have hesitated to agree.
The classified intelligence assessment of the Taliban largely taking control assumes that the Afghan government and the Taliban fail to reach a political agreement and that a civil war would erupt after the American exit.
Administration officials warned that making any intelligence estimate is challenging, that predictions about the future are always imprecise and that various factors influence the analysis.
For example, intelligence estimates depend on whether international funding for the Afghan government remains in place. The more money the United States and its allies provide Afghanistan, the longer the government in Kabul should be able to retain control of some of the country. But some officials said that history shows that once American troops are withdrawn, Congress moves quickly to cut financial support for partner forces.
There is also a debate in Washington about the seriousness of the threat of a return of terrorist groups. For now, the number of Qaeda and Islamic State militants in Afghanistan is very small, a senior U.S. official said.
Some senior lawmakers with access to the classified assessments said that it was not certain that if the United States withdrew that Al Qaeda could rebuild a base in Afghanistan from which to carry out terrorist attacks against the United States.
“What is that threat really going to be?” Representative Adam Smith, Democrat of Washington State and the chairman of the House Armed Services Committee, said this week during a virtual conference on Afghanistan. “This isn’t the 1990s when Al Qaeda set up camps, and they had the Taliban and no one was paying attention to them.”
Mr. Smith said keeping U.S. troops in Afghanistan actually increased the risk to Americans there, incurred greater financial costs and handed a propaganda victory and recruiting tool to the United States’ enemies.
Some counterterrorism officials believe that Al Qaeda would prefer to re-establish its headquarters in Afghanistan, should American troops withdraw. But other officials said Al Qaeda’s leadership might be just as likely to look to Africa or the Middle East.
While American intelligence officials have been mostly focused on the threat of Al Qaeda, senior military officials have also raised the prospect of a growth in the power of the Afghanistan arm of the Islamic State.
But in recent years, the Taliban have been at odds with the Islamic State. The two groups have fought, and the Taliban have for the most part pushed back Islamic State forces.
“I can’t imagine a scenario where ISIS and the Taliban would strategically cooperate or collaborate in Afghanistan,” said Lisa Maddox, a former C.I.A. analyst. “The Taliban is an ideological organization, and that ideology is Afghan-centric and not aligned with ISIS’ overarching goals.”
The intelligence estimate predicted that the Taliban would relatively swiftly expand their control over Afghanistan, suggesting that the Afghan security forces remain fragile despite years of training by the American military and billions of dollars in U.S. funding.
Offensives last year in Kandahar and Helmand Provinces, two areas in the country’s south where the Taliban have long held sway, demonstrated that the police and local forces are unable to hold ground, prompting elite commando forces and regular army troops to take their place — a tactic that is likely unsustainable in the long run.
The Afghan security forces still rely heavily on U.S. air support to hold territory, which American military leaders acknowledged this week. It is unclear whether that American air power would continue if U.S. forces left Afghanistan, perhaps launched from bases in the Persian Gulf, although the Pentagon has drawn up such options for the White House.
“The capabilities that the U.S. provides for the Afghans to be able to combat the Taliban and other threats that reside in Afghanistan are critical to their success,” Gen. Richard D. Clarke, the head of Special Operations Command, told the Senate on Thursday.
Julian E. Barnes and Eric Schmitt reported from Washington, and Thomas Gibbons-Neff from Kabul, Afghanistan. Najim Rahim contributed reporting from Kabul.