IT IS being reported that US President-elect Donald Trump has belted a threat that his government will impose 100% tariffs on countries within the BRICS bloc if they commit to creating a new currency for international trade.
In late October 2024, Malaysia officially became a partner country in the BRICS alliance. This followed confirmation by Prime Minister Datuk Seri Anwar Ibrahim in July that Malaysia had applied for full membership.
Trump’s warning to “comply or kiss US market goodbye” is a concern that calls for serious consideration by Malaysia.
This is a legitimate concern for all Malaysians given the fact that in 2023 alone, the trade value between the United States and Malaysia saw our nation exporting goods worth $35billion (RM160 billion) to the US.
The US’ warning that BRICS countries “should expect to say goodbye to selling into the wonderful US economy,” matters much to countries like Malaysia given the disproportionate export currency earnings that helps to develop nations.
While we may seemingly take comfort in the fact that BRICS now has now some 34 countries interested in the bloc, can Malaysia develop sizeable markets in order to forgo US trade to reduce our reliance on the US dollar?
Have we taken cognisance of the prospect that a “new” currency within BRICS is unlikely, given the alliance’s internal economic and geopolitical disparities?
We could be taking comfort under the expansionary trade wings of China. But have we taken into consideration that trade is never about charity and sacrifice, or sheer corporate social responsibility (CSR) for any ambitious nation?
It is no surprise that the two nations spearheading the BRICS thrust – Russia and China – are in partnership to challenge American leadership.
Suppose Trump bulldozes his painful tariff threat, what are our safety net alternatives in so far as foreign (US and Europe) investments in the country are concerned, as well as our export earnings, food supply and supply chains, and the huge investments our GLCs, GLICs and other government agencies including entities like MARA have made?
Former Goldman Sachs economist Jim O’Neill predicted that BRICS countries would challenge the global dominance of Western economies. But we must not lose sight of the fact that many analysts and predictions have gone wrong, too.
Today the BRICS bloc which comprises 45% of the world’s consumer population yields the power of controlling 28% of the global economy. But will the US allow that percentage to go on a trajectory?
While Anwar’s strategic aims to maintain the nation’s economic and geopolitical independence should not be dismissed in its entirety, we nevertheless need convincing answers to what are our assuring alternatives towards striking a balance in our national trade and investment plans for the future.
Has Anwar’s assertion that Malaysia’s position along the crucial Straits of Malacca – a key shipping route that facilitates global crude oil transport – is our best bet for courting BRICS, also taken stock of China’s interest in alternative shipping routes?
No one leader or a political party in power should trap our beloved nation into a painful future.
We are at the cusp of needing a united, learned, national decision and all Malaysians must be concerned as the ultimate responsibility and consequences will fall on every one’s shoulders – citizens, lawmakers and rulers. – December 2, 2024
JD Lovrenciear reads Scoop