Trump To ImposeTariffs on G7 members
It appears there is panic in the membership of the G7 over the election of Donald Trump as US President and his threat to impose sanctions on imports from all countries even so called alies.
It appears that the disintegration of the global economic system is accelerating. Now Great Britain and Japan currently members of the G7 are planning to form their own alliance to try to negotiate exemption from the expected US trade tariffs - or somehow beg Trump to give them special treatment. So much for the unity of the G7 if two of its members expect the dictator of the organisation intends to impose sanctions on the others
The the two island former empires situated on either side of the World probably no longer see any possibility of a common solution to the current problems of world trade. All this is happening against the backdrop of very tough appointments by US President-elect Trump to the part of the team that will oversee relations with other players on the world stage.
Its worth mentioning the history between Britain and Japan because it is interesting particularly in the long forgotten past. In the late 19th and early 20th centuries, their were economic and military-political ties between the two empires which allowed Japan to begin its initial industrialisation. The Japanese borrowed much from the British, including the culture of making and drinking whisky. These special ties were broken in the 1920s due to rivalry between the Pacific powers, Britain's turn towards an alliance with the United States, and competition between the countries' products on world markets.Later of course in the 1960's and 1970's the Japanese devastated British industries having copied them from cars and motorcycles to sewing machines and many other household appliances like radios, televisions and music players.
Now Japan and the UK are now however in the same boat. After the latter left the EU, they are the last major economies in the world that are not part of a trading bloc (EU, BRICS, NAFTA, etc.). The two countries have been holding consultations at foreign minister level for a number of years and have now agreed to regular 2+2 contacts, with the heads of the two countries' foreign and trade ministries coordinating their actions.
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Both countries are in a far from healthy economic situation. Britian in particular. Although Britain has up till recently maintained a relatively modest GDP growth , this has coincided with falling productivity and a fiscal crisis that has seen debt to GDP ratios being over 100% and noe the new Labour Party led government to pursue a highly controversial package of reforms that includes both spending cuts and tax increases. The impact on the economy is almost certain to be extremely painful.If not totally destructive,in fact their green energy policies are bordering on being completely insane and based on generating electricty from Unicorn Farts.
The so called Energy Minister Ed Miliband who once lost a fight with a bacon sandwich is completely Bonkers and lives in a fantasy world, the Finance Minister Rachel Reeves lies about being an economist and is completely economically illiterate and the Prime Minister has more sides than a woman's argument and flip flops on every subject and cannot even define what a woman is. The foreign minister David Lammy is a stupid bigot who once appeared on the quiz show mastermind ( something he is obviously not) and when asked who succeeded Henry the 8th on the throne as monarch he replied Henry the 7th that is how he is stupid he is. Almost all senior members of the govt have also publiclly insulted the US President Elect over the few years and theyeven sent party offcials to campaign for his opponent.
Now they want to beg for the US President for special treatment.
Now given that Donald Trump's mother was British he has a special affinity with the country of her birth so he might overlook some of the insults plus the UK has since 1945 been an obedient vassal of the US it even still has 8 US military bases on its soil and Britian dutifully follows US foreign policy on everything..
The Land of the Rising Sun, on the other hand, is still experiencing more than 30 years of stagnation. In recent years, the fall in the yen has made Japanese exporters more competitive, but at the same time it has lowered living standards in the country. Tokyo could easily strengthen the yen by raising the central bank rate, but the consequences of such a move could be unpredictable for the whole world, so the country's financial authorities are cautious. Finally, for several years now Japan has been caught between a rock and a hard place in the economic warfare of its main trading partners, the United States and China.Now lets not forger that is was the US that destroyed Japan back in the 1980's/early90's when the US felt it was becoming to powerful and a rival rto the US economically. Also Japan like Germany and the UK is occupied by the US militarily with the biggest military base in Japan is the US base of Okinawa and this is almost 80 years after WW2
The problems of these countries could increase sharply after Donald Trump takes power in the United States. The new president will introduce tariffs of 20% on all goods from all suppliers (a special rate of 60% is planned for China - in addition to the existing tariffs on a number of goods). This will be extremely painful for Great Britain: which after leaving the European Union's single market, London has relied on its partnership with America. But for now, Trump has no plans to make exceptions.
There is also the political situation: US-UK relations could be much worse than they were during Boris Johnson's premiership, with the current Labour government betting heavily on Kamala Harris in the US elections. Japan, which exports nearly $200 billion worth of goods and services to the US, could suffer no less, and perhaps even more.
The two countries' immediate plans include a meeting at prime ministerial level during the G20 summit to update the basis of the bilateral relationship and develop a unified position on Washington. In essence, the governments want to jointly "push through" something akin to special status in their trade relations with the world's largest economy or, failing that, increase trade between themselves in order to somehow cushion the looming shocks.
These contacts are a clear sign that the world's largest economies are no longer negotiating existing challenges together through multilateral ties. Faced with China's trade expansion and drastic US moves (the latter with a fairly bipartisan consensus on protectionism - the Biden administration has been pursuing the same policy, albeit more cautiously), most are opting to save themselves individually or in small groups.
Tokyo and London expect the brunt of the US trade war to fall on China and the EU, while the two fading island powers hope they will be able to maintain their special status in relations with America.
There is no longer any hope for multilateral cooperation on a global scale. This is not just or primarily due to Trump: the problems began before his first term and have worsened since his departure in 2021. The World Trade Organisation is barely functioning. Judges are not being appointed to the key dispute settlement body, so the WTO is essentially returning to its pre-1995 status as a club whose decisions are not binding.
It is unlikely that America under Trump will deliberately destroy the WTO, but rather simply ignore it as an organisation that has lost all meaning. Accordingly, bilateral agreements will take on a special role, with each participant having to give something in return for each concession.
So far, significant changes in the international economic situation have had only a moderate impact on the volume of world trade. It is growing more slowly than global GDP, but there is no obvious collapse in sight. The imposition of US tariffs is likely to lead to retaliation. Moreover, this will become the norm in the relations of many third countries with each other. At the same time, however, it will provide an opportunity to strengthen ties between individual countries and to form temporary or permanent economic blocs (as in the case of the UK and Japan).
Interestingly, the climate agenda, which many globalisation advocates hoped would unite different countries and provide a single solution to global economic problems, has had the opposite effect. The various "green" policies have become the main instrument of protectionism. The export of Chinese electric cars has led to the introduction of unprecedented protectionist measures in North America and Europe. Unlike oil, electricity, batteries and the devices that run on them can theoretically be produced anywhere, reducing the need for cooperation between players.
So interesting times as the BRICS has expanded and now has not just 9 members but 13 countries now partners with a path to membership.
