Quad Leaders to Meet on G-7 Sidelines in Japan After Biden Shortens Asia Visit

(Bloomberg) -- President Joe Biden has scrapped planned stops in Australia and Papua New Guinea following his trip to Japan for the Group of Seven meeting to return for continuing negotiations with Republicans over raising the US debt ceiling.

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The decision to cut short the president’s trip threatens to undermine efforts by the administration to strengthen ties in the Pacific, in a bid to counter Chinese influence.

Shortly after Biden’s cancellation, Australian Prime Minister Anthony Albanese announced that the Quad meeting in Sydney next week would no longer go ahead and instead the meeting of the four leaders — including Indian Prime Minister Narendra Modi and Japanese Prime Minister Fumio Kishida — to take place in Japan over the weekend.

In a radio interview after Biden told him that he was postponing the visit, Albanese described the American president as “very disappointed at some of the actions” of lawmakers in the US House and Senate. The debt ceiling standoff involved “behavior that clearly is not in the interests of the people of the United States, but it’s also because the US has a critical role as the world’s largest economy,” Albanese said.

Biden, who departs for Japan on Wednesday, invited the Australian leader to Washington for an official state visit. US officials also reached out to Papua New Guinea Prime Minister James Marape’s team, said White House Press Secretary Karine Jean-Pierre.

“We look forward to finding other ways to engage with Australia, the Quad, Papua New Guinea and the leaders of the Pacific Islands Forum in the coming year,” Jean-Pierre said.

Read More: McCarthy Sees Debt Deal Possible Even With Negotiators Apart

Biden would have been the first US president to visit Papua New Guinea, and has strived to strengthen ties with Australia, including by signing a deal to provide Canberra with US nuclear-powered submarines.

He had scheduled meetings with Pacific island leaders in Port Moresby, before continuing to Sydney and Canberra for the Quad summit with leaders of Australia, Japan, and India.

“Revitalizing and reinvigorating our alliances and advancing partnerships like the Quad remains a key priority for the president,” Jean-Pierre said. “This is vital to our ability to advance our foreign policy goals and better promote global stability and prosperity.”

The cancellation comes after Republicans, including House Speaker Kevin McCarthy, heavily criticized the president for his upcoming travel plans as debt negotiations continued. At a meeting Tuesday at the White House, Biden told McCarthy and other congressional leaders he planned to call them for updates on staff-level negotiations during his trip to Japan, and follow up with an in-person meeting upon his return.

Failure to reach an agreement with congressional Republicans will likely push the US over its debt ceiling as soon as next month, triggering a default that could rock global financial markets, raise borrowing costs for the government, companies and consumers and imperil an economic expansion that’s already begun to show signs of weakening.

Earlier: Goldman CEO, Top US Executives Urge Quick Action on Debt Limit

Wall Street showed fresh anxiety Tuesday about Washington’s ability to raise the debt limit and prevent a historic default with both stocks and bonds falling. Yields rose across the US curve, with the rate on 30-year notes climbing to around 3.9% — the highest since the turmoil affecting regional banks that erupted in early March.

Corporate heads including the chief executive officers of Goldman Sachs Group Inc., Pfizer Inc. and Nasdaq Inc. called on both sides Tuesday to take action to avoid a default.

--With assistance from Ben Westcott and Tim Smith.

(Updates with more Albanese comments on Sydney quad meeting cancellation in third paragraph.)

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