The midterm elections in November 2022 have resulted in Republican-control of the House in the US Congress. In the build up to the elections there had been strong rhetoric from Republicans questioning the value of providing further military aid to Ukraine. In recent weeks the US’ European allies have taken the step of agreeing to supply Ukraine with increasingly capable armoured vehicles including discussions over the provision of tanks. With the war continued to be waged on their doorstep, European states will likely pick up the slack of US aid, should Republican law makers interrupt the ongoing flow of US aid, says GlobalData, a leading data and analytics company.
GlobalData’s latest report, United States of America (USA) Defense Market Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape and Forecast, 2022-2027, reveals that the US defense budget has grown to reach $827.6 billion in 2023. This is a 12% increase from 2022. GlobalData forecasts that the budget will continue to grow, at a rate of (4%), to reach $861.4 billion in 2027.
Madeline Wild, Associate Defense Analyst at GlobalData, comments: “The likelihood of Germany joining the UK in sending tanks to Ukraine seems to be increasing. While there have been suggestions around whether Germany will do so if the US does not, European action in providing aid has been largely independent of the US. However, the threat of war is much closer to home for those in Central and Eastern Europe and so any slowdown in US aid – which has so far been pivotal to the Ukrainian war effort – would likely result in Europe reassessing the volume and rate of its own contributions however.”
The fast-approaching debt ceiling has the potential to disrupt US aid to Ukraine. The so-called debt ceiling is a level of national debt put in place by the US Treasury, once reached, government spending cannot continue.
Wild concludes: “Political reticence attributed to Republican political gains is not the only thing with the potential to disrupt US aid. Economic pressure is being felt by the US with fears that the US will imminently reach the debt ceiling. This will mean that the US cannot borrow any more money, thus restricting spending. This year’s appropriations for Ukraine have already been signed off in the 2023 NDAA, however, should the debt ceiling be reached any future contributions will be prevented until what would be a major financial crisis is resolved. This is especially likely considering the Republican position on how to solve the crisis – through spending cuts.”