On the world’s response to Trump - Issue #134
If history is written by the victors, journalism, too, amplifies the powerful. Trump’s tariffs are the latest instance.
The Big Picture
If history is written by the victors, journalism, too, amplifies the powerful. Trump’s tariffs are the latest instance.
Last week, the US president walked back on his “90 deals in 90 days” promise. As the FT reported, his administration will now impose higher tariff rates on many of its trading partners, rather than striking deals with all of them. These tariffs will be announced “over the next two to three weeks”. As expected, this announcement made global headlines.
Less known is the world’s response to the tariff shock. As this newsletter has written earlier, countries are looking to negotiate; derive more growth from their domestic markets; trying to grab US trade from nations hit by higher tariffs; and focusing on boosting non-US trade. Of these, the greatest potential for dramatic change lies in the last option, replacing US trade with fresh trade relations.
On this point, you need to watch this episode of Panagenius, on how African leaders are responding to Trump’s tariffs.
The concluding remarks from Sandra Babu-Boateng are worth reading. It’s a summary of the creative potential of this ongoing moment.
“What we're seeing right now across the continent is more than just a reaction to US tariffs. It's a real-time test of Africa's trade mindset, economic independence and, most of all, leverage.“
”Some countries like Zimbabwe and Lesotho are folding. They're trying to stay in Washington's good graces by scrapping tariffs or pleading for relief and others like Uganda, Rwanda and Madagascar are pushing back or pivoting hard toward regional trade, warning that this is exactly why Africa needs to reduce dependency on single markets like the US. And then you have countries like Ghana, Kenya and Mauritius who are walking the middle-line trying to stay diplomatic. You know, assess the damage and quietly shift strategy while keeping the relationship with the US intact.”
“But here's the bigger truth. These tariffs didn't create a crisis. They exposed one. They exposed just how vulnerable African economies still are when it comes to external demand, raw material exports, and low value trade. The second someone in Washington sneezes, entire industries in Africa catch a cold. And the second prices dip or preferences change, entire sectors can collapse.”
“That's why leaders like President Museveni are sounding the alarm. His message was clear. Africa isn't trading, it's donating. Donating value, donating jobs. And the cost of staying in this cycle is no longer just economic, it's existential. Because when you don’t control the value chain, when you don't build industries at home, and when you rely on foreign markets to survive, you're not just exposed, you’re expendable.”
“So what now? If there's a silver lining in all of this, it is that the tariffs may finally force a reckoning. More countries are talking about regional integration, infrastructure, investment, value addition and trade diversification not as buzzwords but as survival strategies. The question is whether this moment will finally push Africa from reaction to reinvention…”
“...That’s it for today’s breakdown. If you've been nodding along, shaking your head, or yelling at your screen, good! That means you're thinking because this moment isn't just about trade. It's about power and who gets to shape the future of Africa's economies! Whether your country is negotiating, pivoting or resisting, one thing's clear. The old model isn't working and maybe, just maybe, these tariffs are the wakeup call we've needed.”
With that as backdrop, here is how countries are responding to the tariff shock.
In the YouTube link above, we have Barbados’ remarkable Mia Amor Mottley, who developed the Bridgetown Initiative on how to recast climate finance, saying the Caribbean needs to — apart from engaging with the USA — also “invest in Caribbean agricultural production and light manufacturing” and “build our ties with Africa, Central and Latin America, and renew those ties with some of our older partners around the world, in the United Kingdom and Europe, and in Canada”. “We must not rely solely on one or two markets. We need to be able to sell our Caribbean goods to a wider, more stable global market,” she said.
A clutch of other countries are trying the same mix. Here is Brazil. “It will prioritize trade negotiations with the United States… (even) as it continues to expand commercial agreements with other countries as a way to offset the impact,” AP reported last week. Or take Mexico. “If the tariffs continued, Mexico would ‘reach out to Canada and other nations’,” Al Jazeera quoted President Claudia Sheinbaum as saying. “She added that Mexico… could shift trade alliances ‘if necessary’.”
As the PanaGenius episode shows, a clutch of countries in Africa are making similar sounds. In South Africa, as an article by Wandide Sihlobo, a senior fellow in the Department of Agricultural Economics, at Stellenbosch University, says, “Efforts will intensify to diversify export destinations, targeting markets across Africa, as well as in Asia, Europe, the Middle East, and the Americas.”
This, as Al Jazeera wrote, is the deepening of an ongoing trend. “Already, for nearly 20 years, China has overtaken the US as Africa’s top trading partner and represents one of the continent’s largest bilateral lenders.”
If that is LatAm and Africa, what is happening in the middle-east? There, too, as Middle East Eye wrote, businesses and governments are asking “tough” questions — such as whether they are overly exposed to a single market, and how they can future-proof their trade strategies.
Another commentator, Tamer Al-Sayed, chief financial officer at the Future Investment Initiative Institute, told Arab News that he expects greater regional integration. “In times like these, neighbors matter. So, the US will remain a key player, but the region is clearly tilting toward a more balanced, multi-polar trade approach,” he said. He foresees targeted, sector-specific trade agreements across the globe. Green energy partnerships with Europe, digital and AI cooperation with Asia, and food security initiatives with African nations, all part of this evolving trade blueprint.
What about Asia? “As the reactions of the Thai and Vietnamese governments suggest, major Southeast Asian economies now have a strong incentive to reduce their heavy reliance on the US market,” wrote The Diplomat.” While this is easier said than done – replacing the US market could well take years, if not decades – the indiscriminate nature of the Trump tariffs could create new economic convergences between Southeast Asia and many other economies, among them the European Union, Japan, South Korea, India, Australia, the United Kingdom, and Russia. It is also very likely to tighten China’s already considerable economic linkages with the region, as Beijing presents itself as a proponent of mutually beneficial economic exchange.”
What does one make of all this?
Much of this decoupling is indeed easier said than done. As CarbonCopy reported last week, global trade institutions, too, are such that they serve US interests better — making decoupling yet harder. There are questions, too, on whether Global South leaders can make more of this moment than just bilateral trade agreements. As Sandra Babu-Boateng says in her concluding remarks, the African Union is silent.
It’s not the only one. As economist Jayati Ghosh told CarbonCopy last week: “There is an absence of global strategic thinking. Trump has starved WHO for funds. All it needs is $2.1 billion for two years. The EU could give this sum without blinking an eye. So could India or China. The World Food Programme needs even less — just $400 million. But no country is stepping up to fill these gaps.”
What we have, in effect, is a litmus test for Global South leaders. Their predecessors ended colonialism and left us with the high idealism of Bandung. What happens now?
PS: It will be interesting to see how things unfold. The share of the dollar in international trade will be one barometer. That said, here are some reads for you on this ongoing moment.
China’s exports to US plunge 21% amid Trump’s tariff surge, as trade realigns toward global south (MoneyControl)
Tariffs, Like Free Trade, Discipline the Global South (Jacobin)
The Global South Will Pay for Trump’s Trade War (Project Syndicate)
Trump’s Trade War Revives a Vital Old Question: Can the Global South Go Its Own Way? (CarbonCopy)
Can China win the financial cold war? (Bloomberg)
News of the week
The abrupt termination of Solar Energy Corporation of India (SECI) chief might be related to SECI allowing Anil Ambani’s Reliance Power to bid with fake documents, said Economic Times. Winners of the PLI scheme for batteries — Ola, Reliance Industries and Rajesh Exports — want relief on penalties. GAIL is considering investing in US LNG projects.
In other news, the pattern of expensive solar tenders in Andhra continues. The state just agreed to buy solar power at Rs 4.60/unit. Elsewhere in the country, however, solar + storage tenders are fetching prices of Rs 3.32/unit. And Adani’s Godda project, last in the news for payment trouble with Bangladesh, is now in labour trouble. Workers want permanent jobs. Adani is hiring them, however, through outsourcing firms. These are precarious jobs. Robin Hembrom, a resident of the village of Gangta, told Scroll he had worked at the plant in 2024 in a housekeeping role. “But the contract got over, and the contractor left, now I’m sitting unemployed at home,” he said.
Stepping beyond energy, last week saw two large developments. One, in a new low, India picked up 38 Rohingya refugees from Delhi and dumped them in the seas off Myanmar. Two, the Indian government didn’t report 37.4 lakh deaths from Covid.
Climate investigation of the week
“The carbon capture company Climeworks only captures a fraction of the CO2 it promises its machines can capture. The company is failing to carbon offset the emissions resulting from its operations – which have grown rapidly in recent years,” from Climeworks’ capture fails to cover its own emissions (Heimildin)
Climate longreads of the week
“District cooling is a solution where multiple buildings in an area are connected to a centralized system. In this model, large centrifugal chillers produce chilled water, which is piped to buildings for cooling. The process uses water instead of refrigerant gases and can reduce energy use by at least a third.”
From Hot profits from an AC gold rush. But where's the climate-smart tech? (Livemint)Massive wildfires in Canada helped keep the world cooler in 2023 (New Scientist)
“When Xi Jinping took over the leadership of the Chinese Communist Party in late 2012 he quickly identified a national security vulnerability… Reliance on oil and coal imports had surged to record highs, exposing China to potential supply disruptions via chokepoints in trade channels from the disputed waters of the Taiwan Strait and the South China Sea to the Strait of Malacca and the Indian Ocean. Today, as the world is rocked by Donald Trump’s trade war, the view from the CCP’s leadership compound in Beijing’s Zhongnanhai is starkly different. China is on its way to becoming the world’s first “electrostate”, with a growing share of its energy coming from electricity and an economy increasingly driven by clean technologies. It offers China a strategic buffer from trade decoupling and rising geopolitical tensions with the US.” From How Xi sparked China’s electricity revolution. (FT)
Clean energy, costly future: Rajasthan’s forest communities fight to save ancestral land (The Print)
A rare jaguar rewilding story highlights obstacles to the big cat’s conservation in Brazil (Mongabay)
‘All other avenues have been exhausted’: Is legal action the only way to save the planet? (Guardian)
Higher Prices, Rolling Blackouts: The Northwest Is Bracing for the Effects of a Lagging Green Energy Push (ProPublica)
The Latest Trump and DOGE Casualty: Energy Data. The Energy Information Administration has long provided reliable data on everything from oil and gas to alternative energy. Now, one of its signature reports has been slashed, and a second one canceled entirely amid sweeping job reductions and turmoil (ProPublica)
Books of the week
This week’s newsletter has alluded to the idealism of Bandung. For more on the founding idealism and how it was dashed, read The Jakarta Method: Washington’s Anticommunist Crusade and the Mass Murder Program that Shaped Our World. This week, we have also alluded to how global trade arrangements favour the USA. One glaring instance there was the USA’s crackdown on Huawei. On that and more, The House of Huawei: The secret history of China’s most powerful company is worth a read. Here you get geopolitics, technology, state surveillance and China’s blinding rise over the last 40 years.
Here is a review.