Washington: U.S. President Donald Trump recently introduced a new trade project by which he has charged another 10 percent tariff on goods that are produced in the five BRICS countries; Brazil, Russia, India, China, and South Africa. The President said that India is specifically covered by this measure. Mr. Trump defined the group as a harmful contributor to the U.S. economy and a catalyst of the decline in the dominance position of the dollar on a global scale in a powerful piece of commentary on social media. He said no exception would be offered to any country that is a member of such an organization, stating that the consequences will be experienced.
The President went even further in a later briefing at the White House where he said the BRICS were not a threat but that an attempt to challenge the power of the dollar would be dealt with at great costs. He was affirming, and he was saying, the dollar is king, the dollar we will keep that way. He was also implicit about some other steps, including a 50 percent tariff on copper imports and a staggering 200 percent tariff on pharmaceuticals, but little has emerged.
The decision was announced after the recent BRICS meeting in Rio de Janeiro, Brazil, when member states criticized the U.S. policies regarding trading. Mr. Trump attacked India, a traditional American trading partner, as a member of the bloc accusing it of having boycotted with anti-American trends. However, implementation of the new levies will not take place instantly, according to Reuters, which quotes U.S. Treasury Secretary Janet Yellen saying that the policy would be postponed past August 1 to allow the negotiators additional time to find a resolution.
Japan and South Korea Express Alarm
The tariff expansion is not only BRICS but there are 14 countries that have issued the tariff implementation notices by 25 percent to 40 percent. Japan and South Korea were quick to declare the intention of holding emergency talks with the U.S. authorities to lessen the blow. Japan, one of the most vital allies in the Asian Mainland, raising concerns of the impending economic impacts and a move by Tokyo and Seoul to harmonize actions to challenge the actions.
Wider Protectionist Programme
The new order issued by Mr. Trump is a significant next step to support his administration protectionist agenda. He presented the tariffs as a protection against attempts to destabilize the U.S. economy and in particular an attempt to weaken reliance on the dollar. Analysts caution that implementation of sanctions threatens to complicate diplomacy and disruption of global supply chain, particularly to India, which has significant trade relationships with the United States.
The world is looking forward to economic fall out but The white house is undeterred. Mr. Trump said: “You know, anybody can challenge us and go ahead.” But they will pay heavily.