| PYQ Relevance: Q) The broader aims and objectives of WTO are to manage and promote international trade in the era of globalization. But the Doha round of negotiations seem doomed due to differences between the developed and the developing countries.” Discuss in the Indian perspective. (UPSC CSE 2016) |
Mentor’s Comment: UPSC mains have always focused on various international fora in the context of geopolitics (2022), and Stability in the Indo-Pacific region (2020).
While Trump’s bombastic style may be aimed at negotiating better deals, his administration’s approach could undermine established global alliances and institutions, raising concerns about the future of international cooperation. This approach may also embolden countries like China and Russia to pursue more aggressive territorial ambitions.
Today’s editorial discusses the potential consequences of Donald Trump’s second term on international relations and global governance. This content can be used to present tussle between developed and developing countries in your mains answers based on the issues related to the global governance and multilateral stage.
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Let’s learn!
Why in the News?
US President Donald Trump has warned that BRICS countries will face 100% tariffs if they attempt to reduce their reliance on the US dollar for trade. He stated that any such efforts would not be tolerated and emphasized that this is a firm position, not just a threat.
What are the main points of Trump’s warning to BRICS nations?
- 100% Tariffs: Trump threatened to impose 100% tariffs on BRICS countries (including India), if they attempt to reduce the use of the US dollar in international trade. He emphasized that even contemplating such actions would trigger these tariffs.
- Economic Leverage: Trump asserted that the United States holds significant leverage over BRICS nations and dismissed claims that they have the upper hand. He stated, “We have them over a barrel,” indicating that the US would not tolerate any moves towards de-dollarization”.
- Commitment Against New Currency: Trump has previously demanded a commitment from BRICS countries not to create or support a new currency that could replace the US dollar. He has warned that failure to comply would result in severe economic consequences, including exclusion from the US market.
- The warning is a direct response to ongoing discussions among BRICS nations about reducing dollar dependence, particularly led by countries like Russia and China.
What is de-dollarization and why is it significant?
De-dollarization is the process of reducing reliance on the US dollar for international trade and finance. Countries aim to use other currencies instead of the dollar for transactions and reserves.
Why is it Significant?
- Economic Independence: Countries want to avoid risks from US economic policies and sanctions.
- New Trade Opportunities: It allows nations to trade more freely with each other without using the dollar.
- Response to Geopolitical Tensions: Many countries are looking for alternatives due to conflicts with the US.
- Emerging Financial Systems: This shift could lead to new global financial systems that lessen the dollar’s dominance.
| USA Scenario under the Trump 1.0 Period: • Although the U.S. has influenced areas like climate change, human rights, and trade law, it faces criticism for violating the very norms it helped create. This duality has led to a decline in U.S. influence and credibility in international affairs. • During his first term, Donald Trump adopted a “sovereigntist” approach to international law, prioritizing American sovereignty over multilateral agreements. This led to significant withdrawals from key treaties and organizations, such as the Paris Agreement on climate change and the Trans-Pacific Partnership, as well as blocking appointments to the WTO’s dispute resolution body. • The U.S. has also withdrawn from several international institutions such as UNESCO, and attempted to withdraw from the WHO. • Critics argue that this undermines both U.S. global standing and the effectiveness of international law itself, calling for greater engagement with these legal frameworks to restore U.S. leadership on the world stage. Present Onslaught: • Potential Withdrawal from Multilateral Institutions: Trump’s return to the White House may lead to renewed disengagement from multilateral organizations, similar to his first term, with immediate plans to withdraw from the WHO and the Paris Agreement. • Unilateral Trade Policies: Trump has proposed a 25% tariff on imports from Canada and Mexico, indicating a continuation of protectionist measures that could violate WTO rules and escalate trade wars. • Revival of Conquest Mentality: Donald Trump has expressed intentions to annex Greenland, reclaim the Panama Canal, and potentially include Canada as the 51st state, suggesting he may use coercive methods to achieve these goals. These ambitions reflect a historical approach to territorial acquisition reminiscent of earlier eras of conquest, which could encourage other nations like China and Russia to pursue similar territorial claims. |
How will Trump’s 2.0 approach redefine U.S. foreign policy and its impact on BRICS?
- Shift to Expansionism: Trump’s “America First” philosophy is evolving from isolationism to expansionism, which may lead to more aggressive U.S. actions on the global stage, including potential territorial ambitions and unilateral policies that challenge existing international norms.
- Increased Trade Tensions: His administration plans to impose substantial tariffs on key trading partners which could escalate trade wars and disrupt global trade dynamics, affecting BRICS countries that engage with the U.S.
- Diminished Multilateral Engagement: Trump is expected to withdraw from or disengage from various multilateral institutions and agreements, undermining the normative authority of these bodies and potentially leading to a less cooperative international environment.
- Impact on Global Alliances: The shift in U.S. foreign policy may embolden countries like China and Russia within the BRICS framework, as they could exploit the perceived vacuum left by U.S. disengagement from traditional alliances.
What are the implications of Trump’s domestic policies on civil liberties and social issues?
- Increased Executive Power: Trump may limit First Amendment Rights (these rights are fundamental to American democracy and are designed to ensure individual liberties), using executive power to surveil citizens and suppress protests.
- Targeting Immigrants: His administration could aggressively target immigrant communities, leading to racial profiling and violations of constitutional protections.
- Justice Department Focus: Appointments may shift the Justice Department’s focus away from civil rights, potentially reversing progress in voting rights and police accountability.
- Crackdown on Advocacy: There could be increased government scrutiny of advocacy groups and individuals opposing his policies, threatening free speech.
What should India watch out for?
- Strengthen Multilateral Cooperation: Countries like India should enhance collaboration through existing international institutions and treaties to collectively uphold the international legal order and counter unilateral actions.
- Promote Norm Setting: India with other nations can work together to establish and promote norms that reinforce a rules-based international system, ensuring that their interests are represented and protected.
- Engage in Strategic Partnerships: Forming alliances with like-minded states can amplify their influence in global governance and provide a united front against any erosion of international law.
