Trump tariffs are reshaping old alliances as the global south plots its own path | Trump tariffs

While nations in the South world intensify their discussions on how to respond to Donald Trump’s trade war, the British defender of the beginning of the 20th century of prices Joseph Chamberlain could hold lessons.

Like Trump, Chamberlain considered prices as a cure -all and believed that imperial preference – the preferential rate system with the British Empire – could not only advance national interest, but act like glue linking the colonial British Alliance together.

Chamberlain’s brother, Austen, argued that “this mutual trade, we can strengthen our common interest, we can turn an increase in force between each part of the Empire and we can make our interests so inseparable that when the days of stress and test can think of everyone that he can think and no man can dream of lulling so intimate and advantageous links that he cannot think”.

Trump, on the other hand, did not initially seem to consider prices as a means of nourishing a canvas or an alliance. On the contrary – they have become a raw reaffirmation of American economic domination, designed to repair American historic commercial imbalances.

For the most part, he seems to have worked – insofar as he was able to vulnerate from the dependent savings of the United States – forcing them to reduce its prices or make vague commitments to invest in the American economy.

But in recent months, Trump’s tactics are starting to produce a perceptible political counter-reaction. It is premature to claim that the prices lead to a large -scale political realignment, but the resistance presented in recent weeks by the leaders of Brazil, Russia, India and China, suggests how Trump’s prices could in the return to the medium term, creating an axis of resistance according to the belief that this is possible to bypass the power that the American economy gives.

Otherwise, is not controlled, Trump’s pricing diplomacy will not only weaken their savings, but will destroy their sovereignty.

Chinese President Xi Jinping said so much following a recent telephone call from his Brazilian counterpart, Luiz Inácio Lula Da Silva, whose country is subject to a large -scale attack confronted with 50% prices on a range of goods as part of a great attack on Brazil which confuses questions of trade, politics and even personal revenge.

“We have to unite and take a clear position against unilateralism and protectionism,” said Xi.

Lula was also on the phone with other victims of Trump’s anger, Narendra Modi and Vladimir Putin. Modi, formerly considered to be the great ally of Trump’s security, also faces 50% of August 27 rates on exports to the United States. He is expected to visit China next month for the first time in seven years, with talks on the restoration of thefts and the strengthening of trade after years of tensions.

Lula summed up the new pragmatism. “We will continue to sell [our products] … If the United States does not want to buy [from us]We will find new partners, “he said.” The world is big, and it is impatient to do business with Brazil. “”

The Rift of the Global South with Trump is deepened because the American prices – all implemented by a presidential decree of the very questionable legal authority – are now used by Trump not only to “rebalance” the account trade deficit of $ 1.18TN, or to demand that countries provide funds to Trump to invest in the United States.

Trump now uses prices to impose his political will on questions entirely unrelated to trade. Although President Claudia Sheinbaum denied any link between the two questions, Mexico has undertaken a series of actions against organized crime while he is trying to fight a threatened rate of 30%. India considers the doubling of 50% prices as an unfair punishment for having increased its reduced Russian oil purchase. The decision of Canadian Prime Minister Mark Carney to recognize a Palestinian state was cited by Trump as making Canada “very difficult”.

In Brazil, Trump tries to stop the “witch hunt” against the ally of Trump, former president Jair Bolsonaro, contesting the law of the Brazilian Supreme Court to determine if Bolsonaro had tried to set up a coup at the end of his mandate. As part of the campaign, he also sanctioned the judge of the Supreme Court Alexander of Moraes and demanded that the restrictions provided for on American social media societies be lifted.

Thus, in several cases, Trump tries to use his American economic lever effect not only to advance American economic interests, but to trample national sovereignty.

The threat of a denial of access to the great American consumer has become his diplomatic weapon of choice, exercised several times as a sword of Damocles on the head of any recalcitrant foreign government.

But more and more victims of climbing and requests from Trump, Trump, discuss whether it is wise to continue to continue peace – at the risk of being chosen one by one – or if it can somehow protect itself collectively, probably by the shelter of the BRICS, the alliance of 10 countries forged as a counterweight to the Western G7.

After all the BRICS, the savings now house approximately 4.5 billion people – more than 55% of the world’s population. The Brics group also represents around 37.3% of the global gross domestic product according to the parity of purchasing power.

The key question is whether the prices and political requirements that accompany them will force a change in the character of the block – so far an ideologically inconsistent group deeply containing countries hostile to America such as China and traditionally friendly countries in the United States such as India and Brazil.

Lula’s thought seems to be evolving, finding himself on a national wave of popular nationalism, fueled by anger against the multiple interference from Trump.

Until recently, Lula hoped that the special Multi-Alignment brand in Brazil could fly under the Trump radar, Oliver Stéenkel, an associate professor at the School of International Relations, told São Paulo. In addition, Lula for all its left-wing policy was reluctant to allow China to transform the BRICS into an explicitly anti-Western alliance, opposing the group’s expansion to include countries like Iran.

But faced with Trump’s requests, Lula must recalibrate. “It made Brazil more convinced of the need to diversify, to have BRICS. It strengthens the need to find new friends and to have as many friends as possible,” said Stuenkel.

“Politically, diplomatically, I think that the Chinese are the big winners of these prices,” said Matias Spektor, professor of politics and international relations at Fundação Getulio Vargas in Brazil.

Lula has also taken the cause of bypassing the dollar, a long -standing goal of China which, in practice, has reached little in the past two decades. “Brazil cannot depend on the dollar and the Brics group should test if it can have a currency for trade,” he said earlier this month.

“I am not obliged to buy dollars to trade with countries like Venezuela, Bolivia, Chile, Sweden, European Union or China. We can use our own currencies. Why should I be linked to the dollar, a currency that I do not control? It is the United States that print dollars,” said Lula.

For the moment, Brazil is reasonably placed to hold Trump’s prices. The United States only absorbed 12% of Brazil’s total exports, down 24% in 2000. China was the largest market in Brazil, taking $ 94 billion in products, including iron, soy and beef ore last year.

But Brazilian industries such as coffee oil, seafood, textiles, shoes and fruits will take a hit, and companies are offering emergency government’s credit lines while they are looking for alternative markets.

UBS BB analysts believe that it is even possible that three-quarters of Brazilian exports to the United States can be redirected, an estimate that suggests that the potential blow to economic growth will only be 0.6% maximum.

India, the fourth largest economy in the world is also faced with pressure to choose a team.

He insists that he has a great economy to challenge Trump, while Modi even in his third term believes that he has no choice but to hold to protect the products of his small farmers, the main target of American trade negotiators. However, it is an extraordinary turnaround that India is dealing with a higher American tariff rate than even China, the country which, at least until recently, successive American administrations wanted New Delhi to help.

In a potential straw in the government’s thinking group, Niti Aayog, proposed to soften foreign direct investment rules that require an additional examination for Chinese companies.

Another key test will be to know if China is authorized to join the complete and progressive agreement for the Trans-Pacific Partnership (CPTPP), the successor to the transpacific partnership (TPP), which was abandoned by Donald Trump in 2017. Beijing applied to 2021 but was prevented from doing so by the company from the request in the same way.

This week, the two countries continued to strengthen ties, announcing that they would resume direct flights, would facilitate visas and intensify trade, while the Chinese Minister of Foreign Affairs, Wang Yi, visited New Delhi.

Without a doubt, Trump’s pricing war will go into phases. For the moment, Trump salutes his victories with the EU, Japan and South Korea, adding that the US Treasury increases billions of additional income. Inflation has not been removed in the way in which some provided, but it is a long war, in which the battle lines are only slowly. It will be deeply ironic if the liberation day ends up isolating America from the rest of the world by encouraging all other countries to exchange with each other.

As such, it will be the polar opposite of what Chamberlain wanted with the imperial preference.