It’s not just BRICS trying to get off the USD. In June Saudi Arabia said to won’t renew the petrodollar agreement after it expired then. The world economy has been trying to have a portfolio of currencies since USA caused a global economic crisis in 2008. Many countries understand the high risk of contagion that the USA poses. Don’t forget that the 2008 crisis was the second one in that decade after the dot-com crisis.
Also these threats, while they work, the reason why BRICS is a group is essentially to try to immunise the effect of these tariffs from USA because of the way USA used these tariffs on Japan in the 1980s.
In the 1980s when 100% tariffs were used against Japan globalisation wasn’t a big a thing and they only targeted one country. Now it’s like every country is being threatened with tariffs. It’s like that overzealous WWE wrestler getting into royal rumble and attacking everyone.
The other thing is that Trump causes uncertainty in a lot of other things e.g. Ukraine, NATO and the UN. Remember he pulled the USA out of WHO over the COVID issue and may try to do it again now. Any country not thinking of plan B is being naive. If Trump is not thinking there are plans to get round him he is also naive.
I disagree with how the Trudeau government has reacted to Trump’s tariff threats. They have grovelled before Trump which will only embolden him to continue using such threats in the future to gain more concessions. I prefer the stronger response outlined in Andrew Coyne’s article in The Globe and Mail.
Interesting that the Canadian stock market has reached record highs since Trump threatened tariffs.
I read the article, there’s isn’t much actionable advice in there. We have to deal with the new world order (as putin said): powerful countries bullying their neighbors. It’s time that Canadians stop believing that the United States is an infallible ally.
I would love to see Canada not being so reliant on the USA for so much of our exports but I have been saying that for 50 years without success. It is easiest to trade with your next door neighbour even if it makes you an economic vassal.
Perhaps if Trump made a pass at his secretary or something, Trudeau would come to a press conference and tell all that we do not cower to bullies.
Then Trudeau gets the girl in the end. I mean, that’s love, actually.
A great analogy to this: the Southeast Asian financial crisis in 1997. The IMF “helped out” by tagging countries there to pay high interest rates to pay back bailouts, and that money accrued to Western countries. SE Asia paid the price, the developed world reaped the benefits.
The lesson SE Asia countries took away? Never put yourself in a position to need the IMF’s help.
Canada was technologically ahead of the US in the military aerospace industry in the 1950s. Ike then “persuaded” Dief that further Canadian government support in that industry must stop. We now buy almost all our military equipment from US companies.
BRICS also means Brazil and South Africa. India, Russia, and China cannot be trusted to any extent, but they will invariably follow their own self-interest.
You will definitely need South America on your side, problem there is:
Peru is aligning itself with China
Brazil wants to move away from dollar*
Argentina loves Trump
Chile is neutralish and has natural resources
Colombia is a mess
Bolivia is a mess but has natural resources
Ecuador is also a mess
Venezuela is a gigantic mess
*There is a chance that Mercosur could sign the EU trade deal (finally) so that would generally help a lot. I posit they will accelerate this if Trump starts throwing tariffs around.
So what I see happening is EU aligning itself with Mercosur, and there is a possibility of Canada and Mexico joining the re-alignment.
And Mexico has successfully reduced the flow of precursors from China opening up employment opportunities for Mexican chemistry students in fentanyl production!
I wonder if Trump is sort of forcing Canada to do what you want. We already have trade deals with non-U.S. countries. Perhaps we need to work on using them more. We can bypass the U.S. on a lot of trade.
An interesting thing I’m noticing in NL is that a lot of our citrus comes from Israel and Africa rather than the U.S. Also lots of Mexican and Argentinian beef. Western Canada seems to get Australian beef.
