Forced Away; Forced Together
The BRIC countries have delivered little for one another in the last 15 years. Expedience could ensure that changes.
The American empire rose over the last 200 years. Its rise was supercharged after the Second World War with the rise of American manufacturing and the nation’s ability to manipulate international politics, mostly through regime change, using the CIA.
Annie Jacobsen, writing about the CIA, says that the US has three levers for foreign policy management. Diplomacy, War and the Hidden Hand of the President - CIA.
In the current context,
Over the last 80 years, America has engaged in consecutive wars - Korea, Vietnam, Libya, Grenada, Cuba, Iraq, Afghanistan, to name a few. All of them have resulted in the loss of time, treasure and lives. Each war only helped to underline the impotence of the American war machine. Since George Bush, presidents have been wary of using this tool. They would much rather send weapons to countries that are willing to send their own to die.
War is out of the question.
In Donald Trump, they have a president whose head does not know what his mouth is saying. So diplomacy is out of the question. As an extension to that, the CIA requires a president who can shut up. With Trump, nothing covert will remain covert. I am sure their operatives just point-blank refused field assignments.
Therefore, all foreign policy tools are out!
Trump is trying to use trade as a lever to make countries acquiesce.
Maybe in the 1970s, America was the be-all and end-all in trade and could call the shots, but not today. Many economies are on their path to growth, while the US economy has displayed, at best, stunted growth. The business leaders in the US are more focused on appropriating the value generated through productivity in the name of AI than on broader prosperity.
America has been on the long road of deskilling its people so that a few families could amass all the riches.
The Trump tariffs will break the back of the poor in America, and it will make the middle class realise how close to poor they really are. At the same time, it will provide the rest of the world with an impetus to find ways to work with one another.
In 2009, the BRICS was created and underwent expansion only last year. For more than a decade, this group of countries have met and discussed cooperation and delivered little in the way of results are suddenly talking to one another.
Brazil's Ambassador to India, Kenneth Felix Haczynski Da Nobrega, emphasised that India and Brazil are working to turn current global economic challenges, especially the tariff hikes imposed by the US, into new opportunities for deeper bilateral cooperation.
Referring to a recent call between Brazilian President Lula and Prime Minister Narendra Modi, the envoy said the leaders are focussed on charting a long-term strategic road map despite uncertainties in global trade.
Source: NDTV
Amid the tension in ties with the US after President Donald Trump doubled the tariff on India over its purchase of Russian oil, Prime Minister Narendra Modi and President Vladimir Putin held a phone conversation Friday during which they discussed “the latest developments on Ukraine” and “reaffirmed our commitment to further deepen the India-Russia Special and Privileged Strategic Partnership”.
Source: Indian Express
China on Friday welcomed Prime Minister Narendra Modi’s upcoming visit to Tianjin for the Shanghai Cooperation Organisation (SCO) Summit later this month. This will be PM Modi’s first trip to China since 2019.
Chinese foreign Ministry spokesperson Guo Jiakun said the summit, to be held from August 31 to September 1, will see participation from leaders of over 20 countries, including all SCO member states and heads of 10 international organisations. Calling it the largest SCO meet since the grouping’s inception, Guo Jiakun said, “We believe the summit will be a gathering of solidarity, friendship and fruitful results.”
Source: India Today
Before going further, I will admit that these jokers have not been able to work together for a variety of reasons, mostly because China harbours expansionist ideas on all sides.
I had written earlier that if Russia, China and India were to work as a block, given the declining fertility in the West, a considerable counter-force can be created. Trump is doing his level best to enable this.
European Abdication
The Europeans have been willing to play the role of the American Vassal. Since the Second World War, their abdication of power has been total.
Now, as they scratch their cheeks and wait for the outcome of the meeting between Trump and Putin, they are completely impotent when it comes to matters concerning Europe. Trump laid out a 19% tariff, and the EU simply accepted with no retaliation. They simply bent over.
To their embarrassment, Trump is unable to inflict any damage on Russia or China, neither of whom has been subjected to any tariffs, while the EU itself got a raw deal.
India, a country that was marginally aligned with the US, is also being alienated now!
American Woes
One can safely conclude that Trump is neither a student of Economics nor business. If we were to go by Trump’s assumptions that sellers pay the US tariffs, they are bound to pass the cost on to the buyers. There are very few products in the world that afford more than a 20% margin. If the tariffs are in the range of 15% to 50% no seller is going to sell at a loss. They are bound to pass on the cost or stop supplying altogether.
The US will either see a supply crunch or mega inflation. This will make the Fed push interest rates up to temper the inflation. This will further push bond yields up, weakening the dollar, which in turn will make imports more expensive.
In the meantime, countries forced away by Trump are being forced together by expedience. What 15 years of diplomacy could not achieve, 6 months of unnecessary antagonism is delivering.