How Trump's anti-Brics crusade is giving bloc new strength and meaning
Brics bloc of developing nations. With threats of punitive tariffs and direct provocations, Trump has positioned Brics as a target in his second term. Yet rather than splitting the bloc apart, his aggressive policies are fortifying it.
His threats are not having the intended effect. Instead, it is the US' own relations with the Brics members that have come under strain. The clearest example is India, a critical 'swing state' within Brics. Despite India's strategic importance to Washington as a counterweight to China, Trump has repeatedly undermined trust between the two nations.
He invited Pakistan's army chief Field Marshal General Asim Munir to a
private lunch at the White House in June. More recently, after slapping a 25 per cent tariff on Indian exports, Trump announced an
additional 25 per cent tariff over its purchases of discounted Russian oil, a move India's Ministry of External Affairs condemned as 'unjustified and unreasonable'.
Trump's relationship with Russia is little better. While he has positioned himself as a
would-be peacemaker between Russia and Ukraine – raising the prospect of luring Russia away from China in a reversal of Richard Nixon – in reality he has only heightened the risks of a nuclear war.
In response to remarks by former Russian president Dmitry Medvedev about Russia's nuclear strike capabilities, Trump said on social media that he had ordered
US nuclear submarines to be positioned in 'the appropriate regions'. The Russian foreign ministry followed up by declaring that Moscow was
no longer bound by a moratorium on the deployment of short- and medium-range nuclear missiles.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South China Morning Post
8 minutes ago
- South China Morning Post
On the ground: US President Trump mobilises National Guard for Washington crime prevention
US President Donald Trump arrives for a news conference on Monday to discuss crime in Washington,... US President Donald Trump arrives for a news conference on Monday to discuss crime in Washington, announcing the... share
South China Morning Post
3 hours ago
- South China Morning Post
As Trump prepares to meet Putin, peace prospects in Ukraine war seem slim, analysts say
The stage is set for what could mark a turning point – or yet another false dawn – in efforts to end Europe's deadliest conflict since World War II. In a dramatic escalation of diplomatic efforts to resolve the grinding Ukraine conflict, now in its fourth year, US President Donald Trump is hosting Russian President Vladimir Putin for face-to-face talks in Alaska on Friday. Security will be extraordinarily tight: airspace over the port city will be closed on Friday and Saturday and the US Secret Service will work closely with Russia's Federal Protective Service to ensure the leaders' safety. Indeed, the meeting's exact venue has not been officially disclosed, though The New York Times and local media reported that it would be held at the Joint Base Elmendorf-Richardson, a combined US Air Force and Army base in Anchorage on Friday. While observers worldwide fixate on how the summit might shape the war in Ukraine – and possibly scramble the geopolitical landscape – the White House has worked to temper expectations. On Tuesday, Karoline Leavitt, the White House press secretary, acknowledged that with 'only one party' present, a deal was not possible. Despite strong objections from Kyiv and Brussels, neither Ukrainian President Volodymyr Zelensky nor any EU official will take part in the talks. The White House said that Zelensky was not included because the invitation to meet came directly from Putin.
AllAfrica
4 hours ago
- AllAfrica
Why Trump bows to Xi but batters and mauls Modi
US President Donald Trump's 90-day extension of a tariff truce with China while tightening the screws on India is rooted in the cold arithmetic of open macroeconomics – where the balance of real economic power, supply chain leverage and strategic resources determines who can endure a trade war and who must yield. In 2024, the United States ran a US$295.5 billion goods trade deficit with China, a function of China's dominance in manufacturing and its role as the world's low-cost supplier of electronics, machinery and intermediate goods. Roughly 30% of US imports originated in China, embedding a structural dependency that tariffs alone could not unravel without provoking inflation and supply chain chaos at home. Trump's peak tariff threat of 145% on Chinese imports was a negotiating tactic, not a path to decoupling. The macroeconomic reality was unavoidable: the United States consumes what China produces, and China produces at a scale and price that sustains US price stability. By May 2025, the so-called 'truce' reducing tariffs to 30% acknowledged that the costs of a prolonged tariff war would fall squarely on US consumers, industries and markets. China's $3.59 trillion export machine is not merely large; it is diversified and resilient. In 2024, despite punitive tariffs, Beijing maintained a $262.33 billion total goods and services trade surplus with the US, offsetting losses by diverting goods to ASEAN, Europe and Belt and Road Initiative partners. Its sheer export scale—nearly 30 times India's—allows it to absorb shocks that would cripple smaller economies. When Washington escalated tariffs, Beijing countered with up to 125% duties on US farm products, hitting Trump's electoral base. This capacity to impose politically targeted retaliation, while sustaining export growth, forced Trump into the Geneva negotiations of May 2025 to stabilize trade flows and global GDP projections, which had slid to 2.8% amid market turbulence. For the US, continued escalation risked not only consumer price spikes but also investor panic, as evidenced by a 3% drop in the S&P 500 during the tariff peak of 2025. The yuan, unlike the rupee, is a controlled currency, enabling Beijing to offset tariff impacts through managed depreciation—5% against the dollar in 2024—keeping its exports competitive without triggering domestic instability. This monetary lever is a powerful macroeconomic equalizer in trade conflicts, one India simply does not possess. Washington's August 2025 extension of the tariff ceasefire implicitly recognized China's ability to neutralize tariff pressure through currency policy, ensuring that US tariffs could not structurally undermine Chinese competitiveness without self-inflicted inflation. Critical supply chains cemented China's negotiating position. In 2024, 60% of U.S. semiconductor imports came from China or Chinese-affiliated networks. Beijing's dominance in rare earths and strategic minerals—the indispensable inputs for high-tech, energy, and defense industries—means that any prolonged disruption would raise US production costs in technology and automotive sectors by 10–15%. In open macroeconomics, the ability to choke an adversary's production chain is as potent as controlling oil in the 1970s. China wields that leverage; India does not. Trump could threaten tariffs of theatrical proportions, but Beijing could quietly remind Washington that it sits atop the supply of critical minerals without which the 'real' US economy—production of goods, services, energy, raw materials and technology—cannot function. Trump's 'madman' tariff brinkmanship was designed to extract concessions, but it met a near-peer in China—a $1 trillion trade surplus economy in 2024 with $3.4 trillion in reserves, 5% GDP growth and diversified markets. By contrast, US inflation had climbed to 4.2% in 2025 under tariff pressure, and farm-state discontent was mounting. The June 2025 agreement, which included expanded US agricultural exports to China, was less a victory than an admission that the world's largest manufacturing economy could not be coerced into submission by tariff policy alone. India's predicament is the mirror opposite. With a $3.9 trillion GDP in 2024—about one-fifth of China's—its real economy lacks the scale to withstand a full-spectrum trade confrontation with the United States. Its $87 billion in exports to the US, equal to 2% of GDP, are concentrated in vulnerable sectors like pharmaceuticals, textiles, and IT services. Trump's 50% tariff regime (a 25% baseline plus 25% penalty for Russian oil imports) jeopardizes $40 billion in annual export revenue. The macroeconomic translation is stark: a potential GDP contraction of 1–2% and job losses in the millions, especially in labor-intensive industries where political backlash is swift and meaningful. India's trade dependence compounds its weakness. It runs an $85 billion trade deficit with China, heavily reliant on Chinese electronics, APIs and industrial inputs. This dependency blunts any capacity for symmetrical retaliation against US tariffs because Indian manufacturing competitiveness is hostage to Chinese supply chains. In open macroeconomic terms, a nation that must import its intermediate goods from the very country it competes with cannot dictate trade terms to a third power. China can redirect exports; India must keep buying them. Currency and reserve limitations deepen India's exposure. The rupee, subject to market pressures rather than administrative control, depreciated 3.9% against the dollar in 2024, importing inflation and eroding household purchasing power. With $700 billion in reserves—a fraction of China's—India lacks the firepower to defend its currency or subsidize export industries for long. India's core Inflation, already at 4.5% in 2025, could easily breach 7% under sustained tariff shocks, while the fiscal deficit of 5.1% of GDP leaves little room for counter-cyclical spending. China, by contrast, could deploy $500 billion in economic stimulus in 2024 without risking fiscal credibility. The domestic political economy amplifies India's fragility. The 2–3 million jobs at risk from US tariffs on leather, gems, and other labor-intensive exports would fuel immediate political unrest in a democratic system sensitive to price shocks and unemployment. Beijing can suppress dissent and stretch a trade war over electoral cycles; New Delhi must answer to voters far sooner. This structural asymmetry in political tolerance is a critical, if rarely stated, element of trade resilience. Geopolitically, India has blundered. Its $40 billion in Russian oil imports in 2024 triggered US secondary sanctions, inviting Trump's tariffs. China also buys Russian oil but is shielded by its economic indispensability and its ability to threaten reciprocal harm to US supply chains. India, with its smaller market and weaker bargaining power, became the softer target. Trump's selective enforcement—sparing the EU's $67.5 billion in Russian trade—was a calculated move, exploiting India's vulnerability while avoiding a rupture with Europe. The 'China Plus One' opportunity—where multinationals seek to diversify supply chains away from China—has largely passed India by. Infrastructure gaps, regulatory hurdles and policy inconsistency have limited its attractiveness to global manufacturers. NITI Aayog's own 2024 review admitted that India had failed to capture significant FDI from firms leaving China. Meanwhile, China, even under tariffs, retained its manufacturing dominance and posted a $1 trillion trade surplus. In the arithmetic of global production, size begets resilience; India's smaller base magnifies shocks. From an open macroeconomics perspective, tariffs are supposed to hurt real production—goods, services, energy, raw materials, and technology—by raising costs and distorting flows. A smaller real economy cannot inflict lasting harm on a larger one; the larger can, in time, dictate terms to the smaller. This is why China could compel Trump to negotiate: it produces at the scale, diversity, and technological sophistication of a near-peer competitor, and it controls strategic minerals that underpin advanced manufacturing. India, lagging far behind both China and the United States in technological capacity and resource leverage, cannot play the same game. Trump's selective punishment and engagement strategy reflects this asymmetry. With China, he faced a rival that could both harm US industries and absorb its own losses. With India, he confronted a partner dependent on US markets, vulnerable to currency and fiscal pressures, and unable to mobilize equivalent retaliation. In the logic of open macroeconomics, the stronger player extracts concessions; the weaker offers them. For India, the path forward is neither simple nor short. Diversifying export markets through accelerated FTAs with the EU, UK, ASEAN and RCEP could reduce US dependence, but such deals take years to mature. Building reserves via diaspora bonds or gold monetization could provide currency stability, but only at the margins. Allowing selective Chinese investment in non-sensitive sectors might boost manufacturing competitiveness, though it risks political backlash. Infrastructure investment on the scale of $100 billion over five years is necessary to attract serious FDI, yet fiscal limits constrain ambition. BRICS, under China's leadership, offers a platform for trade resilience, but India's influence within it will remain modest until its economic scale grows. Trump's dealings with Beijing were shaped by the recognition that tariffs cannot break a bigger, resource-rich, technologically advanced real economy without inflicting worse damage on one's own. With New Delhi, the calculus was simpler: tariffs would bite quickly, politically and deeply, making resistance costly and compliance more likely. Until India builds the scale and strategic assets to negotiate from strength, it will remain, in the unforgiving ledger of open macroeconomics, a taker of terms, not a setter. Bhim Bhurtel is on X at @BhimBhurtel
