President Biden will arrive at the Group of

seven 7

summit in Hiroshima, Japan, on Thursday, with a long to-do list: reassuring Western allies of US commitments in the Indo-Pacific region while calling for economic unity against China and Russia.

But

politics

dysfunction at home was debilitating

Biden’s foreign policy agenda, even

before Air Force One took off from the US on Wednesday morning. The president on Tuesday scrapped plans to visit Papua New Guinea and Australia next week, and will instead return to Washington this weekend for ongoing debt limit negotiations with congressional Republicans.

Biden scrapped the last leg of the trip after talks with House Speaker Kevin McCarthy and other congressional leaders failed to strike a deal to raise the government’s debt ceiling and avoid bankruptcy.

could make markets roll, stop the flow of capital and trigger a global financial crisis.

The Treasury Department has warned that the government could run out of money for the first time on June 1.

“The whole credibility of this country…

certainly our currency all over the united states

our leadership in any capacity would be compromised by a default,” Chuck Hagel warned,

a former Republican senator from Nebraska who served as Secretary of Defense under President Obama.

“Especially at a time when China is challenging America as the preeminent power in the world.”

House Republicans have refused to raise the debt limit, a once perfunctory practice that has turned into a political battle in recent years unless the White House agrees to cuts. Biden firmly believes that the two issues are separate. He has said he is happy to negotiate future cuts, but stressed that it is Congress’s responsibility to allow the government to continue borrowing to pay bills already accrued.

White House and Republican congressional aides plan to continue negotiations while Biden is abroad, but the outcome will be closely watched in Hiroshima, home to the world’s most advanced economies

try to estimate the probability of a US default.

The president

plan

to use the annual global meeting

to announce

new restrictions on US investment in China in advanced technology industries, including semiconductors, quantum computing and artificial intelligence.

He wants allies to impose similar measures

. The US and other G7 countries, including Britain, Canada, France, Germany, Japan and Italy, are also considering ways to increase economic pressure on Russia in response to the ongoing attack on Ukraine. A total ban

export to Russia

is on the table.

Josh Lipsky, senior director of the Atlantic Council’s GeoEconomics Center, said that’s a tough sell as the US teeters on the brink of bankruptcy.

“This is creating so much tension that the US is trying to force these G7 allies to do more than they have done before with Russia and China,” he said. “But this huge problem weighs on everyone’s head.”

McCarthy said the two sides remain miles apart, but told reporters after the meeting

with Biden on Tuesday

that it was possible to reach a deal by the end of the week. While Biden has insisted he is not negotiating the debt limit, his shortened journey indicates progress over the months

–

long stalemate. The two sides appear to have reached tentative agreements on several issues, including paying back unused COVID-19 funds and adopting reforms to accelerate energy development.

White House officials insist the fiscal confrontation will not upset G7 allies and undermine the president’s mission to strengthen ties with the

Pacific

region part of a larger whole

US

efforts to counter China’s more aggressive economic and military actions.

G7 leaders “know that our ability to pay our debts is an important part of US credibility and leadership around the world,” National Security Council spokesman John Kirby told reporters on Tuesday. “They understand that the president also needs to focus on making sure we don’t default and having these conversations with congressional leaders.”

Kirby pointed out that Biden will meet with the leaders of the Quadrilateral Security Dialogue or Quad alliance on the sidelines of the G7 summit. The group, which consists of the US, India, Japan and Australia, was scheduled to perform at the Opera House on Sydney Harbor on May 24.

Although Biden canceled his performance at the Quad meeting

Hi

has

invited Australian Prime Minister Anthony Albanese to the White House for an official state visit to be determined later.

Past US presidents have also cut foreign travel to address domestic tax battles.

President Obama had to cancel a 2013 trip to Indonesia and Brunei due to a potential

government

closure while President Clinton skipped Japan’s 1995 Asia-Pacific Economic Cooperation forum to address a budget impasse.

But “the world is now much more turned upside down, more volatile and uncertain,” Hagel said. The large-scale Russian invasion of Ukraine has changed the world order, while rising tensions with China over Taiwan have raised the specter of war in the South China Sea and put the region on edge.

While it is unclear exactly what would happen, as the US has never defaulted on its debts, the economic fallout could erode confidence and increase other countries’ dependence on

by

the dollar, according to Lipsky.

According to the International Monetary Fund, the US dollar is the world’s most widely distributed currency, accounting for nearly 60% of global central bank reserves. A decline in the dollar’s value could lead countries to stop trusting the banknote, ending its reign as the world’s reserve currency.

Any default would amount to a “gigantic self-inflicted wound” and undermine the United States’ international position, said Jonathan Kirshner, a professor of political science and international studies at Boston College.

“If the United States voluntarily and unnecessarily defaults on its national debt, that will be a very important data point for countries making assessments of their expectations of US behavior… of its reliability, of whether it will be controlled by adults in the room capable of representing America’s best interests,”

Kirshner said.

Biden’s decision to skip the second leg of his journey will not go unnoticed in Beijing, where Chinese President Xi Jinping has increased doubts about America’s trustworthiness and pitched China’s authoritarian system as an alternative to Western democracy .

Xi, who doesn’t have to worry about opposition parties, is the most powerful Chinese leader in decades and could keep his post for life. Biden, who could lose the 2024 election to former President Trump or another Republican, cannot promise that kind of continuity.

“What it says to our competitors and adversaries around the world is that this is just more evidence that the United States is a country in decline,” Hagel said.

Biden was scheduled to stop in Papua New Guinea, where he planned to spend a few hours with Pacific island leaders as Washington continues to battle with Beijing for influence across the Pacific. Biden, who would have become the first sitting US president to visit the country, hosted Pacific Island leaders at the White House last year.

Biden’s canceled visit to Australia would have been his first as president and the fourth meeting between Quad leaders since taking office.

“The nature of the presidency is that many of the critical issues are dealt with all at once, so I am confident that we will continue to make progress to avoid default and fulfill America’s responsibility as a leader on the global stage,” said Biden during the press conference. a celebration of Jewish American Heritage Month at the White House after meeting with McCarthy

on

Tuesday.

The alternative would destroy the economy, he warned,

other

“and our international reputation would be extremely damaged if we let that happen.”