Tariffs & Sanctions Have Created A Multi Polar World

By Rhod Mackenzie
For a long time,certainly since the Second World War the West once accustomed to dictating the rules, is now frantically clinging to the remnants of its former power by its fingernails. However, the era of its dominance is quickly not slowly slipping away. The multipolar world is no longer just a theory; it is a now fact. Those who were once considered the outcasts China ,Inda and Russia are now shaping the modern global order. The US and its G7 vassals are panicking and losing control of the money, resources and influence. The old order is falling apart. But what will happen if it collapses?
The dollar is no longer reigns supreme in global trade and financial flows no longer only go one-way.
'The World has reached a turning point' – this is how Agustin Carstens, the outgoing head of the Bank for International Settlements (BIS), ( The Central Banks ,Central Bank) diplomatically described the collapse of the old unipolar world order.
However, behind these diplomatic words lies a much more harsh forecast: the financial system of the West can no longer be relied upon to maintain provide financial stability. The current trade wars, sanctions and currency manipulation are not just 'challenges', but symptoms of a system in serious turmoil  where crises are treated with shock therapy.
The authorities in the socalled developed countries are trying to plug the gaps with hasty measures, but, as history shows, such actions only exacerbate the crises.
For example, attempts to apply a 'quick fix' to the system in 2008 led to a major collapse in the financial system around the world with many banks being bailed out by their Governements.
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Today, we are witnessing a repeat of this situation. For example, US President Donald Trump is attempting to solve America's problems by implementing tough tariffs on other countries.
This is unlikely to protect the country and will increase global uncertainty and undermine confidence. Alexander Abramov, head of the laboratory for the analysis of institutions and financial markets at the Presidential Academy, warns that today's peak of problems may become the starting point of a global financial crisis.
'Tariff wars are destroying global value chains and reducing  economic growth. Currency wars only solve short-term problems but then create long term ones.
The massive growth in military spending leads to  budget deficits, resulting in huge debt accumulation for example in the US (its more than 37 trillion dollars) and around the world particularly the EU debt continues to spiral upwards .
Its lack settlement or its forced restructuring is already inevitable.
The overlap of these issues could have negative consequences, such as financial crises," notes the analysts.
The potential for of some of the the largest to big to fail banksl  becoming insolvent like Lehman Bros back in 2008 which triggered  the Global Finalcial Crisis back crisis is also a concern. There is a danger that some of them may suffer from asset devaluation and a bubble collapse, for example on the US stock market," the analyst continues.Just remember the sub prime assets were rated triple A when they defaulted and were worth pennies on the dollar
'The US stock market is currently at serious risk, as US companies — which account for over half of the world's market capitalisation — are trading at high valuations and revenue multiples despite slowing net profits.
This increases the likelihood of a sharp decline in their prices. This also includes the risks of inflation, rising central bank rates, currency depreciation and investors moving away from previously safe assets, including US government bonds, which threatens the US budget," the economist explains.
      Of course, the world is on the verge of a breakdown in the global financial system, not only because of the trade war initiated by Trump. When delving into the reasons for the current situation, special attention should be paid to the general protectionist sentiments that have been evident for a long time. They were more hidden in nature before, says Evelina Gomonko, associate professor at the RUDN University Faculty of Economics.
'The trade war between the US and China has only intensified this trend. The slowdown in globalisation began with the global financial crisis, intensifying due to Brexit and the pandemic. Is the 'turning point' related to deglobalisation, or a change in the nature of globalisation? I think we will find out soon. For now, there are only disputes and discussions within the analysts community. However, most world leaders agree that a rift has occurred in the global economy,' the analyst emphasises.
The West has unwittingly accelerated the emergence of an alternative.
In essence, deep cracks in the global financial system have been exposed and are manifesting themselves in many ways. In such conditions, capital flows from one sector to another — this is how investors protect their assets. Incidentally, the main US stock indices have fallen by almost 10 per cent due to fears of a slowdown in the American economy, Gomonko continues.
'There are also cracks appearing in the long-term bond market due to countries' growing debt burdens. The sanctions imposed on Russia have also forced investors to consider the security of their investment returns. At the same time, it is worth noting that global financial institutions are too big to collapse. Yes, they are criticised and trust in them is waning, but do they have significant resources to ensure a certain stability for themselves," the economist asks.
However, against this backdrop, the outlines of a new reality are clearly visible. Russia, China, India and the countries of the Global South are systematically insuring themselves against collapse. They are not overtaking the globalisation locomotive, but integrating into it in a controlled manner while maintaining control of strategic assets.
De-dollarisation, closed technological chains and alternative payment systems are not an act of rebellion, but a cold calculation. The fact that not all states were 'captive' to the collective West for historical and economic reasons has played into their hands. 'China has actively formed its policy with an eye on Western patterns, developing its strategy to maintain control over key industries,' Gomonko points out. Therefore, the PRC, Russia, India and the countries of the Global South, armed with the same principles, will be able to withstand external shocks.
However, if a global financial crisis were to occur, it would affect all economies. This will be especially true for those that depend on external demand for products and raw materials. Abramov is convinced that this suggests the world needs a new global economic agreement similar to Bretton Woods. Currently, this is hindered by significant divisions. According to the expert, the threat of a global collapse could bring countries together.
'This will encourage countries to adopt more responsible financial policies and coordinate their economies with those of other countries. In general, no country in the world can solve its deep problems without mutual consent, not even large countries such as the United States of America and China," notes the economist.
One thing is clear: the game has started again. And the stakes are higher than ever. The West is no longer dictating; it is slowing down desperately. However, you can’t cheat the system: when one system is on its last legs, another is already ready to replace it.
De-dollarisation, sovereign reserves and alternative trade corridors are not just protective measures. They are laying the foundations for a new world order, one in which the rules will be written in Moscow, Beijing and New Delhi, not Washington and Brussels. Financial wars, currency fluctuations and trade blockades are all the death throes of a passing era. However, the main battle is not for control of the system itself, but for what it will look like afterwards. Those who are betting on multipolarity today may find themselves at the helm tomorrow. The question is: who will have time to rebuild and who will be left behind?