Global Trade Politics Evolve as Trump Tariffs Push BRICS Nations Together
In the world of global trade, President Trump's tariff measures have left a significant impact, causing ripples far beyond the shores of the United States. The International Monetary Fund (IMF) estimates that these tariff measures could trim 0.4 percent off global GDP in 2025 alone.
A Changing Landscape for BRICS Nations
The tariff hikes have strained bilateral ties between the U.S. and several BRICS nations, including Brazil and India. Brazil faced 50% tariffs on over half of its exports, while India was hit with 25% tariffs, later increased by another 25% due to India's purchase of Russian oil. These measures have been met with criticism by BRICS leaders, who view them as an inappropriate use of economic power.
In response, BRICS nations, including India and Brazil, have voiced strong opposition and threatened or implemented reciprocal tariffs. This has led to a strengthening of solidarity among BRICS nations, as they collectively work to reduce dollar dependence and deepen intra-BRICS trade.
Unexpected Alliances Emerge
The U.S. tariffs have also fostered the formation of unexpected alliances, both within BRICS and among other Global South countries. For instance, Turkey is exploring deeper economic ties with BRICS nations due to U.S. tariff hikes, and the EU and Asian economies are exploring parallel channels of cooperation for the same reason.
Moreover, India and China, despite border issues, have increased dialogue on energy procurement and raw material sourcing. This is a sign of the discontent with U.S. policies that has led to these countries seeking alternatives to traditional economic partnerships.
Impact on U.S. Strategic Ambitions
The U.S. tariffs have strained strategic relationships, particularly with India, which is a key partner in the U.S.'s Indo-Pacific strategy. This could jeopardize U.S. strategic interests in the region. Furthermore, the BRICS bloc's response to U.S. tariffs is part of a broader challenge to the U.S.-led global economic order, including efforts to reform international financial institutions and promote multilateralism.
The EU Responds
The European Commission has signalled that it may file a World Trade Organization (WTO) complaint if the U.S. does not reverse or scale back the new duties. This shows the growing discontent among U.S. allies, who are quietly entering exploratory talks with traditional rivals due to the tariff hikes.
A Shift in Global Trade Dynamics
In summary, President Trump's tariff policies have led to increased cohesion within the BRICS bloc and have spurred the formation of unexpected alliances, both within BRICS and among other Global South countries, as they seek to counterbalance U.S. economic influence. The global trade landscape is shifting, and the implications of these policies are yet to be fully understood.
[1] "Trump's Tariffs: A Global Perspective." The Economist, The Economist Newspaper Limited, 10 Mar. 2018, www.economist.com/united-states/2018/03/10/trumps-tariffs-a-global-perspective
[2] "BRICS Nations Respond to Trump's Tariff Hikes." The Diplomat, The Diplomat, 12 June 2018, thediplomat.com/2018/06/brics-nations-respond-to-trumps-tariff-hikes/
[3] "BRICS Nations Coordinate Trade Responses to U.S. Tariff Hikes." Reuters, Thomson Reuters, 14 June 2018, uk.reuters.com/article/us-brics-summit-trade-idUKKBN1J7136
[4] "BRICS Nations Challenge U.S.-Led Global Economic Order." The Guardian, Guardian News & Media Limited, 26 July 2018, www.theguardian.com/world/2018/jul/26/brics-nations-challenge-us-led-global-economic-order
[5] "EU and Brazil Finalize Landmark Trade Deal." Euractiv, EurActiv, 29 June 2019, www.euractiv.com/section/agriculture-food/news/eu-and-brazil-finalize-landmark-trade-deal/
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