New Delhi:

Donald Trump on Tuesday denounced India, China, and Brazil as “tremendous tariff-maker(s)” and said his government would not allow the three to continue down this path, declaring, “… we’re not going to let that happen any longer because we’re going to put America first.”

Speaking to House Republicans at a Florida retreat, the United States President acknowledged the three countries – founding members of the increasingly influential BRICS bloc – were acting in their respective best interests, but seemed also to insist “… they mean us harm”.

“We’re going to put tariffs on outside countries and people that really mean harm to us. Well… they mean us harm, but they basically want to make their country good. China is a tremendous tariff-maker, and India, Brazil, and so many other countries. (But) we’re not going to let that happen any longer… because we’re going to put America first,” Trump declared to cheers.

The comments came shortly after it emerged Prime Minister Narendra Modi is likely to meet Trump in Washington, as early as next month. The two leaders spoke on the phone Monday night; it is unclear if tariffs were on the agenda, but New Delhi’s view on ‘illegal immigrants was.

READ | “Mutually Beneficial, Trusted Partnership”: Modi-Trump Phone Call

However, the US President’s view on India and tariffs is seen by many as problematic, given he slammed Delhi – the US’ largest trading partner – as a “very big abuser” during his campaign.

Trump also spoke of a “very fair system” to “very quickly” make the US “richer and more powerful”, repeating what he said after he was sworn in last week; he said, “Instead of taxing our citizens to enrich other countries… we will tariff and tax foreign countries to enrich our citizens.”

And if foreign companies – Indian, Chinese, Brazilian, or others – want to avoid these high tariffs, Trump said, they would have to “build your plant right here in America”.

He also told the House Republicans of plans to slap tariffs on steel, aluminium, copper, and other materials required by the American military. “We have to bring production back… There was a time we made a ship a day. Now we can’t… We don’t know what the hell we’re doing.”

READ | “America First”: Trump Vows Tariffs On Nations That “Mean Harm” To US

High tariffs on goods imported into the US – specifically from China – were a frequent refrain during Trump’s campaign. He also warned of “100 per cent tariffs” on BRICS nations to (in his mind) shut down talk of member-nations not using the dollar as the common currency.

Trump’s tariffs tirade has a clear economic agenda, questionable though the means may be, and that is to jumpstart manufacturing in the US. By marking up the prices of key commodities like steel, semi-conductors, medicines, etc., he is hoping to do just that. “Under the ‘America First’ economic model, as tariffs on other countries go up, taxes on American workers and businesses will come down and massive numbers of jobs and factories will come home.”

READ | How Donald Trump Is Using “Tariffs” As A Weapon

The other perspective is ‘tariff as a weapon’, a point-of-view underlined by Trump’s clash with Colombia over deportations. The South American country initially refused to accept a plane loaded with ‘illegal immigrants’, only then to face massive 25 per cent tariffs and a trade war.

Colombian President Gustavo Petro eventually relented; he had to, of course.

READ | “Cooperate Or…”: In Colombia Face-off, Trump’s Strong Message

White House Spokeswoman Karoline Leavitt was quick to claim a ‘victory’, saying: “Today’s events make clear to the world that America is respected again”, and Trump echoed that sentiment Monday, telling reporters “it serves the world well to look at” the Colombia spat.

With input from agencies

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Washington DC:

Donald Trump has sniffed trouble brewing afar against the United States – one that may topple the US’s position as a dominant global power and end Washington’s ability to impose economic sanctions against those it deems fit for the case. The storm in question is the steadily-expanding BRICS+ grouping.

Within hours of taking office as President of the United States, Donald Trump went after the BRICS+, threatening to impose 100 per cent tariffs on member countries. The reason Washington feels threatened by the grouping is because it makes the US dollar, America’s greatest weapon – one it can actually use, vulnerable.

In recent times there have been reports of a possibility of the BRICS+ nations working on a common currency which would replace the US dollar for international trade. The founding members of the BRICS are Brazil, Russia, India, China, and South Africa – the acronym of which is BRICS. Over the years, several other countries have become members of the bloc, namely Egypt, Ethiopia, Iran, the United Arab Emirates (UAE), and Indonesia. Saudi Arabia has accepted the membership, but has not formally joined yet, saying that the matter is under consideration.

BRICS+, which is shaping up to be the developing world’s alternative to the West-led G7, has set up its own financial structure and institutions, and is cooperating economically and diplomatically to reduce its dependence on the US Dollar – the default currency for international trade.

Donald Trump has now said his administration will impose 100 per cent tariffs against countries of the BRICS+ bloc, should they take any steps to replace the US dollar. “If the BRICS nations want to do that (replace the US dollar), that’s okay, but we’re going to put at least a 100 per cent tariff on the business they do with the United States,” President Trump told the international media shortly after his presidential inauguration.

“They will have a 100 per cent tariff if they so much as even think about reducing the use of the US Dollar in global trade,” he threatened.

Less than a month before he took office, Mr Trump had made a similar reference warning the BRICS+ countries. “We require a commitment from these countries that they will neither create a new BRICS currency, nor back any other currency to replace the mighty US dollar or, they will face 100 per cent tariffs and should expect to say goodbye to selling into the wonderful US economy,” Donald Trump, then President-elect, had warned in December.

HOW THE US DOLLAR IS WEAPONISED IN SANCTIONS

The US Dollar, has for decades, been the world’s principal reserve currency. It has been the case since the Second World War, following which global institutions like the United Nations, World Bank, and International Monetary Fund, among many others were set up. All these institutions were set up in the United States – And America being the largest trading country of the world at that time led to US Dollar becoming the default currency for global trade.

In 1973, a new system was set up to moderate international transactions. This system is known as SWIFT, which is short for Society for Worldwide Interbank Financial Telecommunication. Since then, this has become the world’s commonly accepted and standardised model for international money transfers.

According to its website, SWIFT is a member-owned cooperative connecting more than 11,000 banks, financial institutions and corporations in more than 200 countries and territories. SWIFT is neither a payment nor a settlement system, and is therefore is not regulated as such by any of the world’s central banks.

SWIFT is overseen by the central banks of G10 nations – namely, Belgium, Canada, France, Germany, Italy, Japan, The Netherlands, United Kingdom, United States, Switzerland, and Sweden.

Since the US Dollar is the default currency of trade globally, and SWIFT is the method or channel of settlement, sanctions are imposed by controlling these two. Sanctions are imposed via SWIFT by restricting access to the network or completely prohibiting individuals, institutions, and countries from using its services. When sanctions are imposed, it completely freezes an account and restricts any further transactions from it.

SWIFT sanctions can freeze any bank’s ability to transact with the rest of the world. Under an international rules-based order, much of the global financial governance is dominated by the US-led West.

MULTI-POLAR WORLD

In the 21st Century, with the rise of Asia, and economies like China, India, Russia, Indonesia, UAE, Saudi Arabia, and others, the world has become much more multi-polar, instead of being bipolar – which was the case during the Cold War between the US and USSR through much of the 20th Century, post the two world wars in the first half of the century.

Brazil in South America and South Africa in Africa were also rising global economies.

With time, emerging economies became increasingly disgruntled with the dominance of the US Dollar being the default in almost all global transactions. This also kept them under a constant threat of Western sanctions, should they not two the line. To deal with this, BRICS leaders have for long reportedly advocated for de-dollarisation, and been in favor of increased trade in local currencies and even reportedly explored the possibility of a potential common BRICS currency.

The BRICS members have even set up the New Development Bank (NDB) and the Contingent Reserve Arrangement or CRA – which act and function exactly like the World Bank and the International Monetary Fund or IMF, respectively.

The so-far 10-member BRICS+ grouping already comprises nearly half of the world’s population and over a third of the global economy. It also has more than 25 per cent of the world’s landmass, produces more than 30 per cent of the world’s oil output and is on track to surge ahead of the G7 economies in less than 20 years.