With the Dollar Strengthening, and With Easily Predictable Economic Outcomes Looming, President Trump Targets BRICS

Sundance  reporting  for  CTH 

The latest announcement by President Trump via Truth Social [SEE HERE] should not come as a surprise to anyone here.

As the economic impact of MAGAnomics starts to sink-in to the global psyche, once again it is predictable that China and the EU will use their central banking system in a defensive posture against President Trump’s economic, trade and tariff policies.  As a direct result, the value of the dollar increases, and as we noted before, “Exports from the USA ultimately cost more because the dollar is stronger against EU and Asia currencies. However, a stronger dollar is an offset to BRICS leverage and allows Trump to play economic chess.”

That’s the background for this:

[Source]

President Trump knows how to leverage U.S. market access as part of the economic security program for the entire country.  President Trump is the only person who can do this.   If a nation wants to align with an alternative trade currency, President Trump will tariff their products at 100%, and/or shut them out of the USA market completely.

MAGAnomics Simplified: Everyone who is a pragmatic critical thinker knows that China will (a) subsidize their targeted industries; then (b) devalue their currency to lower the impact of exports to the USA. Beijing controls the banks, and they did this before. As a result, the dollar value increases and imports cost less.

The Chinese imports then enter the USA at a lower price consistent with their cost estimate as a tariff offset. China takes in a lower price but retains access. That’s just how it works. The importers pay the tariff with a lowered price and a higher valued dollar. Essentially statis for the time being.

Then…..

EU industrial products to Chinese manufacturing plants start to contract, due to China’s aggressive cost cutting initiatives.

The EU gets angry about the impact to their economy. The EU then follows the same path and devalues their central bank currency; further pressuring the dollar to an upward price. Exports to the EU are now more expensive; however, imports from the EU to the USA are now cheaper. Again, the EU goal is statis.

Both scenarios create cheaper USA imports despite the tariffs. However, on the EU side Trump then ends the Marshal plan and executes “tariff reciprocity” against the EU. More frustration and gritted teeth by Brussels.

[NOTE: Avoiding this squeeze also explains why U.K PM Starmer was all snuggly to Trump at Trump Tower in October – he’s hedging.]

Exports from the USA ultimately cost more because the dollar is stronger against EU and Asia currencies. However, a stronger dollar is an offset to BRICS leverage and allows Trump to play economic chess.

Trump uses part of the tariff income to underwrite agriculture exports, but… here we have fun… if agriculture exports are impacted, domestic foodstuffs drop in price.

Into this dynamic Trump turns to Mexico. We have a strong dollar, all those Western Union transfers to Mexico are more valuable. Leverage is created for multiple ancillary policy benefits. The economic situation then overlays the secure border dynamic and if Mexico wants to retain trade access within the USMCA agreement, the part that no one discussed comes into play.

Unbeknownst to all those except those who watched Robert Lighthizer do it, the USA has first right of refusal to any trade agreement made by Mexico or Canada. That’s correct, Trump now controls a veto on trade agreements within USMCA partnered countries. Suddenly Xi Jinping is vulnerable in Mexico if Trump nixes the EV production. Beijing is financially exposed and vulnerable. Big Panda not happy.

This is what Trump did in 2017.  This is what President Trump is promising to do again.

Trump will likely divide the globe into three trade areas. Asia, Europe and the Middle East. Each area will have a trade advisor with specific instructions on that region.

The U.S. Trade Representative (USTR) Jamieson Greer will likely have primary focus on Asia, i.e. China.  U.S. Commerce Secretary Howard Lutnick will likely have primary focus on Europe.  The Mid-East trade advisor could even be President Trump himself or from the energy sector, someone like President Trump’s interior secretary pick, Doug Burgum.

Trump will lead approximately 4 people in this MAGAnomic initiative (the 4th is the Chair of the Council of Economic Advisors Kevin Hassett), while holding all the approvals of negotiation and policy very tight. Economic and trade policy will be used to create peace and global stability.

Warmest best,

~ Sundance