Outlook for Asia

US election: impact on Ukraine and European security

  • Momentum will be behind Russia in 2024, with Russia now in a position to make slow but significant territorial gains in Ukraine. We continue to forecast that the war will be a protracted conflict. However, the outlook for US aid to Ukraine—which is critical to Ukraine’s ability to defend itself—is highly uncertain, owing to the approaching US presidential election.
  • A second term for Joe Biden as US president (currently our core forecast) would mean continued (but diminished) military support to Ukraine, at a level that we believe would not tip the war heavily in Russia’s favour.
  • If Donald Trump were elected president in November, we would expect a sharper reduction in military and financial support for Ukraine. In this scenario, a compromise deal would probably be imposed on Ukraine on Russia’s terms. Mr Trump would also be an untrustworthy security partner for Europe and NATO, which would lead to serious concerns about security across much of eastern Europe, especially Moldova and the Baltic states.

Momentum will be behind Russia in Ukraine in 2024, and we expect it to make slow but significant territorial gains. Russia has fewer problems with manpower than Ukraine, as it has been able to replace its losses. In terms of artillery ammunition, Russia has a firepower advantage of about 5:1 or 6:1 (compared with about 12:1 at the beginning of the war) as well as a production advantage over Ukraine. The Ukrainian military is currently working on stabilising the front line after losing the city of Avdiivka. However, Ukraine still has serious issues including manpower (rationalising the force and mobilisation, which will take time and could become a serious problem in the second half of 2024), as well as ammunition supply and fortification to hold its lines (both of which depend on Western aid). There are constraints, although smaller, for Russia as well, including in terms of equipment repair and replacement (vehicles, for example), especially following the battle of Avdiivka, and an inability to employ forces at scale.

The outlook for the flow of US aid to Ukraine is uncertain

The outlook for the flow of US aid to Ukraine, which is highly uncertain, could have an important impact on the progress of the war. Western arms and funds are crucial for Ukraine to be able to hold its lines against Russia’s superior manpower and firepower. The US has provided about US$75bn in assistance to Ukraine since the start of the war, including about US$44bn in military assistance (as at April). The size of US military aid stands out when compared with other countries. However, passing new aid packages has become increasingly difficult for the US administration. On April 20th the House of Representatives (the lower house of Congress) approved $61bn in military aid, which will prevent serious setbacks for Ukraine on the battlefield in the near term. However, the delay (about six months) in passing this aid bill highlights the bitter wrangling over Ukraine within Congress.

What to expect under a Biden presidency

A second Biden administration would continue to provide military support to Ukraine, but at a reduced level—although not a level that would tip the war heavily in Russia’s favour. However, it would take Democratic majorities in both houses of Congress to ensure continued support for Ukraine, and our baseline forecast is that the next Congress will be divided. Furthermore, we expect that even Democratic support will weaken over time, albeit from a high base. As the conflict drags on, war fatigue will rise across the board in Western countries.

Overall, under a Biden administration we would expect aid to decline over time to a level that would prevent Ukraine from regaining the land currently under Russian control, but to remain sufficient to stabilise the front lines again.

What to expect from a Trump presidency

We believe that Mr Trump would be in favour of an even sharper reduction in military and financial support for Ukraine in order to force Ukraine to the negotiating table. The rest comes down to Congress: there is still bipartisan support for Ukraine, but, assuming that political polarisation remains high, little funding is likely to pass Congress without firm White House support. A radical minority of Republican lawmakers loyal to Mr Trump have blocked aid for Ukraine in the House for months; they would probably be emboldened further under a Trump presidency. Mr Trump would probably agree to some reduced economic aid to Ukraine, and in the form of loans instead of grants—which would not change the result for Ukraine’s war effort—as a more palatable alternative to voters.

Under Mr Trump, we would expect an early and fairly concerted effort to open negotiations between Ukraine and Russia. Mr Trump’s administration would be likely to use financing levers to force Ukraine to the negotiating table, while Russia would probably see this as an opportunity to strike favourable terms. Similar to Mr Trump’s failure to strike a deal on North Korea’s nuclear weapons during his first term, we would have low expectations for success in negotiations, given the gulf in interests. However, if a compromise were to emerge, it would probably favour Russia, most likely formalising the existing loss of about a fifth of Ukraine’s territory.

There is a moderate risk that US aid could be completely withdrawn or massively delayed under Mr Trump. Under this scenario Russia could make major territorial gains. This would also send a strong message about the West’s lack of unity and sticking power, undermining the credibility of its security guarantees more broadly. Europe would face severe threats to its security from an emboldened Russia. Countries most exposed to Russia’s revisionist goals (such as the Baltic states or Moldova) would be legitimately fearful, and investor sentiment across much of eastern and western Europe would take a serious hit.

What is the future of NATO and European defence under a Trump administration?

In the two decades leading up to Russia’s invasion of Ukraine, Europe increasingly leaned on the US for security. The risk that the US’s security role in Europe would diminish under a Trump presidency, coupled with the rising Russian threat, means that the EU’s investment in defence will have to grow dramatically in the coming years. Even under a Biden administration, we would expect increased pressure to raise European defence spending.

If Mr Trump won the election, we would expect the US to become a more untrustworthy security partner for Europe and NATO. Mr Trump has threatened not to respond to an attack on NATO members who do not meet the 2% of GDP target for defence spending, and has also threatened in the past to leave NATO. This would need congressional approval, and we believe that it would face stern opposition in Congress. However, alliances rely on trust, and merely suggesting that the US would not fight for the other allies could seriously damage the credibility of NATO.

EU defence spending reached a record €270bn in 2023. However, Europe would have to significantly step up its defence capabilities to make up for the loss of US support, which would take years. European NATO members have nearly 2m troops and some experience operating together, while the UK and France have nuclear weapons. However, European countries tend to act individually when it comes to defence and lack cohesion. The European Parliament estimates that EU countries could save between €24.5bn and €75.5bn annually if they joined forces and avoided duplication. At present, Europe’s spending is dispersed among many armies. Although most member states want to strengthen European defence and decrease the current reliance on the US, the difficulty of expanding Europe’s military capabilities will be very high when public finances are already strained, and while divisions over a common strategic defence vision are large.

A Trump presidency would incentivise further increases in European defence spending and collaborative defence production in the coming years. We would expect a much faster increase in EU involvement in defence industrial matters. However, for Europe to be able to push back an attack by a reconstituted Russian force (to pre-war level) would require not only raising defence spending, but also (crucially) revitalising its arms industry, designing a new nuclear umbrella and coming up with a new command structure, which would take years.

In early March the European Commission unveiled a new strategy for the bloc’s defence industry. The plan includes buying more weapons together and fewer from the US, ensuring weapons supply security, and cutting red tape for European defence Projects of Common Interest. However, the plan still needs to be approved by the European Parliament and member countries. This is likely to meet some resistance at the national level, as countries are highly defensive when it comes to their national sovereignty over military and weapons spending. This means that Europe’s security dependence on the US will continue over the next decade.

The analysis and forecasts featured in this article can be found in EIU’s Country Analysis service. This integrated solution provides unmatched global insights covering the political and economic outlook for nearly 200 countries, enabling organisations to identify prospective opportunities and potential risks.