Trump tariff consolidates BRICS

Sometimes strategy returns unintended consequences. Trump tariff business strategy instead of damaging BRICS gave a fillip to the group to consolidate amongst themselves and support each other in using the force of the tariff blow against Trump to get him boxed out:

This is a grand Judo/Aikido technique that redirects the force of the blow towards the opponent who delivered it in the first place. As a proponent, Sun Tzu used this technique in military warfare. It can be similarly executed in business warfare as well where an action of the opponent could be tuned into a counter blow where confidence of the person who punched first gets shattered. Here are few of the outcomes.

1.  Leaders of the BRICS countries started to call each other. Even the arch enemies India & China did this in the broad daylight to annoy Trump to shake his belief that India is the weaker party.

2. Iran assiduously got into the centre of action where its foreign minister played more than useful role in getting the fellow members to toe the line against Trump mania.

3. BRICS agreed for a collective response instead of individualist ones. They agreed to ignore the Tariff and started work not on counter tariff steps but on non-tariff sanctions and export licensing system against USA.

4. BRICS immediately announced that this is Trump’s proxy war using financial and trade related restrictions against the three biggies namely Russia, India and China the so called Primakov Triangle.

5. When Trump threatened to enforce secondary  sanctions against countries such as China & India who are  buying oil from Russia and Iran his bravado was not only ignored by both of these countries, who went on the spree to  buy more.

6. De-dollarization was given further fillip where use of domestic currency for bilateral trade was strengthened. In order to do so payment system that is currently in use in Russia & China are to be combined as a solo one to become a conduit.

7. A settlement system is being studied where all the currencies of the individual members are to be aligned under a Central Settlement Unit which would be maintained by the BRICS National Development Bank.

8. Lula de Silva, President of Brazil nonchalantly declared that he does not mind any quantum of tariff rate as Brazil can survive without America. The point here is, USA cannot forego Brazilian goods.

From the above happening one can draw a lesson: business warfare in the form of tariff is outdated and the West led by America has to come to terms with BRICS while navigating business strategy amid geoeconomics!

Cheers! 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist