A Prophecy of Esau and Jacob

Donald Trump’s threat to slap countries that shun the US dollar with 100% tariffs is a “lose-lose” situation for both America and Brics countries.

During a rally in Wisconsin on Saturday local time, the former president promised that he would push to keep the US dollar as the world’s reserve currency, if elected in November.

“Many countries are leaving the dollar. They not going to leave the dollar with me. I’ll say, you leave the dollar, you’re not doing business with the United States because we’re going to put 100% tariff on your goods,” Trump said.

The US dollar is a sort of privilege that the US economy has been enjoying, and it’s sort of a liquidity tax on the rest of the globe, so we shouldn’t not surprised to see this kind of threat. And in recent years, from Brazil to Southeast Asia, countries have been calling for trade to be conducted in currencies besides the greenback.

CNN by Katie Lobosco • September 9, 2024

Tariffs are a tax

Here’s how tariffs work: When the US puts a tariff on an imported good, the cost of the tariff usually comes directly out of the bank account of an American buyer.

“It’s fair to call a tariff a tax because that’s exactly what it is,” said Erica York, a senior economist at the right-leaning Tax Foundation.

“There’s no way around it. It is a tax on people who buy things from foreign businesses,” she added.

Trump has said that if elected, he would impose tariffs of up to 20% on every foreign import coming into the US, as well as another tariff upward of 60% on all Chinese imports. He also said he would impose a “100% tariff” on countries that shift away from using the US dollar.

These duties would add to the tariffs he put on foreign steel and aluminum, washing machines, and many Chinese-made goods including baseball hats, luggage, bicycles, TVs and sneakers. President Joe Biden has left many of the Trump-era tariffs in place.

It’s possible that a foreign company chooses to pay the tariff or to lower its prices to stay competitive with US-made goods that aren’t impacted by the duty.

But study after study, including one from the federal government’s bipartisan US International Trade Commission, have found that Americans have borne almost the entire cost of Trump’s tariffs on Chinese products.

To date, Americans have paid more than $242 billion to the US Treasury for tariffs that Trump imposed on imported solar panels, steel and aluminum, and Chinese-made goods, according to US Customs and Border Protection.

But China is only one member of BRICS, there are also Brazil, Russia, India, South Africa; then Iran, Egypt, Ethiopia, UEA and Saudi Arabia. All these countries have already pledged to use local currencies in their trade with each other.

Then there are some 30 or 44 more countries vying to join BRICS. The 16th BRICS summit, scheduled for October 2024 in the Kazan region of Russia, will serve as the platform for deliberating on the new membership applications. 

~ by Joel on September 16, 2024.

Posted in BRICS, Trump, US