An Important Distinction That the Media Has Been Missing About Trump’s Current Tariffs Threat
Donald Trump, in a pre-inauguration day attempt to begin slowing down what has been termed the global “de-dollarization” process, has threatened to slap a 100% tariff on BRICS nations if they try to replace the US dollar with another currency. Notice that Trump used the words “if they try to replace the US dollar”.(1) He didn’t say “if they choose not to use the US dollar”. In other words, SO FAR, Trump has not said that a tariff will be placed on nations who don’t use the dollar. What he’s said essentially, so far, is that if the new economic alliance of BRICS nations creates a currency whose aim is to replace the dollar, then there will be tariffs of 100%. These are two entirely different declarations. The distinction is very important.
Exorbitant Tariffs Will Strengthen Rather Than Weaken Nations Like China, Russia and India
If however, Trump changes the wording of his initial threat and says that he will employ a 100% tariff on countries that choose not to use the dollar, which he very likely will, then he’s going to be in for a surprise. Since early 2023, BRICS charter has grown to include, so far, 10 countries, with dozens more prospective countries waiting to be approved for BRICS membership. BRICS already contains half of the world’s population, almost half of the world’s oil and is fast approaching 50% of the worlds GDP. BRICS members span four continents as well, with members in South America, Asia, Europe and Africa.(2)
In other words, the world economic order that Trump is going to be dealing with in 2025 is completely different than the one he was dealing with from 2017 to 2020. If Trump tries to use tariffs against the members and the prospective members of the BRICS alliance, he’s going to find that it will have the opposite effect from the one he desires. The tariffs will eventually, if not immediately, drive nations further away from the dollar and into the arms of BRICS and its soon to be developed new global currency.
An Example of How Trump’s Tariffs Will Essentially Be Large Taxes on American Consumers
Aside from weapons of war, there isn’t anything that the US produces that the BRICS alliance can’t produce better and more cheaply. Even weapons, the BRICS alliance is more than capable of producing without US help.
Here’s an example of what I’m getting at: China makes the best and least expensive electric cars. Let’s take an electric car made in China that costs the equivalent of 15,000 US dollars. For an American to buy one of these cars, with Trump’s tariff imposed, they’d have to spend 30,000 dollars. This discrepancy will allow American car companies to jack up their prices for their less well made versions of similar cars to somewhere around 25,000 dollars a piece, because that’s how big profits are made. The consumer ends up paying an extra 10,000 dollars for an electric car that’s inferior to the car from China that really only costs 15,000, even though it’s advertised here in the US for 30,000 dollars.(3)
Are You Ready for 20 Dollar Lattes?
Most of the world, Asia, Europe, Australia, much of South America, etc. have already made the move toward electric vehicles, away from gas powered cars. The data is clear, electric cars are the future. There’s absolutely no doubt about it.(4) Now Imagine a 100% tariff slapped not only on cars, but on almost EVERYTHING that’s made outside the US. Keep in mind that over the past 30 years, the US has essentially become a finance based economy. We’ve de-industrialized over the course of the last three decades. Very little is produced here that isn’t produced better and more cheaply elsewhere.
You’re getting the picture, yes? Are you ready for 20 dollar lattes? Add to this the fact that Europe has been following the US model over the course of the last two-plus decades. They have also de-industrialized, to a large degree.
Even if these tariffs Trump is promising to employ somehow produce an initial upturn in the American economy, as a long term option this tariff model is bound to fail. Logic as well as the global players and their playing cards are stacked against it.
The New Multipolar World Order and the Increasing Futility of US Tariffs and Sanctions
A large red flag was raised when the Biden administration tried to sanction Russia (14 rounds of sanctions) in 2022 – 2024. The sanctions produced a “bolt to BRICS” as Russia’s economy soared from being number six in the world to number four. This is because China, India, Russia, Brazil, South Africa and the other BRICS nations have created an interdependent hybrid economy that no longer needs to bow to the dictates of the US.
The unipolar Era of US dominance is over.(5) The final nails in the unipolar coffin were hammered in in 2022, when China and Russia officially joined forces and in 2023-2024, when Russia triumphed economically despite the US and NATO’s attempt to crush them.(6)
The multipolar era has begun. Trump and co. need to become aware of this and to begin working with our global neighbors rather than threatening them. This, whether one wants to argue with the facts or not, will be the only way to global peace and prosperity in the future.
CITATIONS:
3) https://www.youtube.com/watch?v=NyYPlCOOX3M&t=153s
