In his second term, Trump appears angry about an exhausting US trade dominance and easing clout of its currency. He has begun to threaten the fast rising economies, especially BRICS, perhaps the biggest geopolitical and a major economic bloc in the world. Trump’s US nationalism may not have a road ahead as smooth as it could ride on after the Second World War. The day of the US stake in every piece of global trade is becoming a history.
Is Donald Trump worried about something or many things before he takes the oath as President of the United States? After his first term as the President, the world has changed a lot. We must understand that from his speech and body language; yes, he is scared. A worried person often threatens his opponent and speaks loudly. Trump has warned many countries, including India, Canada and Mexico against dumping more products into America. He threatened the countries with a message of hiking duties by 25%. Mexico is a long-time adversary for him. He believes Mexico ships ‘migration’ to the US. After his sudden reaction, Trudeau quickly arranged a meeting with him, fearing his baseless stance on Canada. Just imagine, that Trump has not yet been sworn in as President. He is still in the lounge of the White House, waiting for Biden to vacate his chair.
Trump may face unprecedented challenges in his second term, and the US economy is shrinking. Reports indicate that the looming recession in the US economy may be severe. This will be one of the biggest challenges for him. Additionally, environmental changes due to global warming are also pressing issues, which he has not addressed in his policies. He is yet to come to terms with reality so that he may learn to adapt to the evolving global scenario.
Recently, BRICS countries have decided to enhance their domestic currencies or introduce a new currency similar to the Euro. This is worrying news for Trump. A new currency of a big bloc may signify the end of the US dollar’s dominance. BRICS is a coalition of the US’s arch-rivals: Russia, China, South Africa, and Brazil. None of them maintains cordial relationships with the US, especially China and Russia. India has an inconsistent rapport with the US, and so is Brazil. India has never had an unsuspicious relationship with the US. After Trump’s first term, the US-India relationship turned in a different direction. Trump did not favour Pakistan. That time, India and the US had right-wing leaders at the helm of the affairs. But Trump always prioritizes business relations.
Vladimir Putin’s push to shift to another currency or a Belgium-based SWIFT system has been a long-time strategy. Even after the Ukraine war, he could sustain trade using the ruble with India and China. India has bought a huge chunk of Russian oil in INR, immensely benefiting both. The US warned India many times. Now, if BRICS decide to trade in domestic currencies, it will have a huge impact on the US, as all of them hitherto rely heavily on trading in US dollars. For every country, trading in domestic currency can be both a dream and a nightmare, a dream of self-sustaining, and a nightmare of making an enemy of the vengeful US.
If India trades in INR with all countries, the currency value will increase, which would benefit India in the long run. However, there is also a threat from the US of imposing a 100% tariff on our products, which may have an immediate adverse impact on our trade, especially since India maintains a strong trade relationship with the US. The US is India’s largest trading partner, with bilateral trade surpassing $120 billion in FY24. India’s export portfolio to the US is diverse, spanning textiles, pharmaceuticals, engineering goods, IT services, etc.
The US controls the world by spreading its currency and using war as a weapon for business. It either exports war or encourages war, as seen in Afghanistan, Iraq, and now Ukraine. It is an expert at leaving countries stranded after fulfilling their intentions. India, even while being a partner in the BRICS, is highly dependent on the US for exports. The US cannot simply ignore the decisions made by this group. For India, it is a double-edged sword. If we don’t handle it carefully, we may land in trouble.
India’s External Affairs Minister has stated that India has no intention of de-dollarizing the world, even though it may be a part of our global plans. India must navigate its ships carefully. If BRICS countries do their internal business as a trade bloc, the US has no role to play. Still, the US seems to believe it has a stake in every buying and selling in the world. That exposes the real face of the US, which sustains not on its hard-earned money but on the others’ sweating.