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Washington’s World: June 27th, 2016 – July 2nd, 2016

The White House reaction to unexpected result of the British EU referendum together with statements by other Administration leaders have been solidly respectful of the British decision. Measures to ensure financial stability are in place. However, as we commented last week, behind the scenes concerns are more deep-seated. Most of these focus on the long period of uncertainty that is now likely to come over the European Union and on the prospect that the UK’s own need to renegotiate its relationship with the EU will distract it from its valued role as a key US ally. Defense issues are of less concern as these are covered by NATO, but there are concerns that possible economic problems may retard the UK’s commitment to increased defense spending. Meanwhile, other business continues with Secretary of State Kerry due to meet Israeli Prime Minister Netanyahu in Rome on July 27th. With the latter already having rejected recent French proposals to reinvigorate the Middle East peace process, most of the discussion is likely to focus on other regional issues. Of these, Iran looms large, where US officials are encouraging business deals as a means of shoring up the nuclear agreement. This will not make for a harmonious conversation, but exchanges about continuing US progress against ISIS targets in Iraq and Syria will help redress the balance. None of this progress, however, lessens the warnings being given by the Intelligence Community that future terrorist attacks launched or inspired by ISIS may take place inside the US.  In terms of future US foreign policy, major shifts are already underway. While Donald Trump has welcomed the British decision, other prominent Republican foreign policy experts continue to gravitate toward Hillary Clinton. For the 2016 presidential election it appears likely that, highly unusually, the Democratic platform will be more muscular in terms of openness to military action than the Republican one.

Key Judgments

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