Podcast#43 Will Trump's 100% Tariff Plan Stop De-Dollarization? #dedollarization #brics

[Music] hi guys so today's podcast is about President Trump and his statement now before I start this thing uh there is a disclaimer I want to say that this is some thing this podcast basically I'm not doing it to endorse anybody or any entity because this is the election here and I'm not doing it to make somebody look bad either okay this is just the something uh the scenario that was circulating in the media that President Trump said that he's going to apply 100% tariffs from the on the countries that are going to walk away from the dollar now before we move forward before we move forward I want to say this that the exact statement let's first look at the exact statement all right this is the exact statement that media outlet that you leave the dollar and you're not doing business with the United States because we are going to put a 100% tariff on your and media Outlets are saying that this was said during one of his rallies now to be honest I have not found this exact statement anywhere I have not found him say this thing exactly okay so I'm just letting you guys know and if you find any any find it anywhere justst it in the comment and I'll be glad to probably add it or do something thank you for that in advance all right now what I have found is this okay what I have found is that President Trump has said that we are going to be a tariff Nation for the countries that are going to abandon US dollar that's one statement okay the Tariff Nation is the keyword all right but he's never said that it will be 100% tariff a second thing that I have found out that he has said is that there will be tariff on the cars that are being exported to the USA okay so it's on the cars and we will be a tariff Nation he never mentioned I have not at least I haven't found it okay now so why am I doing this thing so see I'm doing it because it's a it's a fascinating idea to really analyze okay just for the analysis because president Trump may not do it but there are lots of folks who can do it and I think we all know what I'm talking about and who I'm talking about right so they may do it they may try to you know because when you don't have your own brain then and you're doing it based on what who's when somebody's telling you to do it then uh then chances are that it it can happen but in case if it happens then what are the repercussions of it is it going to benefit us as a country or is it going to hurt us as a country and what will be the long-term implication of it these are the things that we are going to talk about in today's podcast okay so as usual normally I don't say like And subscribe but if you do thank you so let's move forward all right now let's look into first of all we'll look talk about the shortterm effectiveness of it okay so in short term okay in short term this may actually imposing tariff could have potentially discourage some of the countries from moving away from the US especially the the countries that are uh that are heavily dependent on exporting to the US right so there are lots of small countries like for example Bangladesh or Pakistan or there are lots of African countries then there are lots of indopacific countries that that solely export to the US right and then there are countries like uh um like Ecuador or El Salvador Panama then Zimbabwe then there are lots of other countries these countries have dollar as their National currency that is US dollar not dollar US dollar is their National currency like martial Islands then we have Puerto Rico and then there are some territories right US Virgin Guam Northern Marana Islands these type of things so they all use US dollar as a national currency now and then there are countries in this region in North American region or we call it what Americas right so in the americaas region there are countries that are solely reliant on us because us is their biggest consumer like for example Mexico we have Cuba then we have Nicaragua then we have Venezuela we have Canada and all other countri car an island and all that right so let's say if these countries or at least one of these countries they decide to walk away from Dollar then there will be heavy tariff on them and considering that the US exp the their export in US is solely on you with with us then what's going to happen they will a little bit think about it until they uh find another resource or another country to export their or consume their whatever they're producing right so for example one of the countries that could be planning this thing is Cuba okay Cuba has been planning to join bricks Cuba and then Venezuela also has been planning to join bricks so they have filed their application but after the application is accepted we don't know if they're going to join or not that is still to be seen all right now uh so if let's say Cuba or Venezuela decide to uh walk away from Dollar then there will be heavy tariff Cuba and on Venezuela Venezuela is already facing sanctions so I don't think that it's going to make much uh impact on Venezuela in fact Venezuela is doing this thing so that they can nullify the sanction effect and for Cuba Cuba will be hurt so so in the in the in the short ter like in the in the in the very say very short short term I think uh Cuba will be hurt and and Cuba will have to look for Al until at least at least until they find some other alternative right so in short the countries that have uh the balance of trade this whole thing will depend on what balance of trade so let's say the countries that have a uh positive balance of trade with United States meaning that their Imports I mean they import less from us and Export more they will be impacted but the countries that actually um import more and Export less to the United stat they will be impacted the least why because they're importing more so if if us will basically let's say if the the Tariff is applied on the import then what's going to happen actually this is going to be like shooting your own foot why because if you increase the Tariff on the Imports any countries that are importing things from us then the prices of the Commodities are going to go up and when prices of the Commodities are going to go up then countries are going to look for other Alternatives right so you have to understand this thing that uh after we started to do trade with China um only thing that we have sold or are exported throughout the years is the Petr dollar there is no other export pretty much or all the weapons and most of these Weapons Systems or the military uh by the military industrial complex most of these weapon systems are given for free actually to theil okay we bear the cost of it we just show that yeah we selling it to them but eventually the dollar uh comes back to us right so basically it's like uh you print something then you legitimize it to maintain the flow of dollar in the market that's why lots of NATO becomes even more important that if NATO let's say if NATO is abandoned then what's going to happen that the whole there will be another place from where the dollar circulation will stop right H in the in the global market and if dollar circulation stops in the global market then guess what the all the debt that we have that debt is going to to go up inflation is going to go up again why because anything that we print there will be nobody to consume dollar that we print needs to be consumed dollar at this point is a commodity dollar is not a currency so so in the short term coming back to the topic right so in the short term this may uh deter some countries until they find their Alternatives countries that have uh that have that export more to us and import L those are the countries that will be hurt until they find some other alternative and also when you apply the 100% tariff then this is going to severely disrupt the global supply chain why because every time first thing is that see every time there is a change in US dollars or its situation whether it becomes weak whether there is a pegging that is removed like you know in 197 when the dollar pegging from the gold was removed guess what from 73 to 83 to 84 around the mid 80s up to mid 80s the global economy was in recession that's what happened and not not to mention when it was removed in 1970 that there was a oil embargo by the Middle East and the Western countries pretty much so that didn't help the situation either and uh uh by By 1979 when the oil for dollar deal was signed right to curve this whole problem when the dollar was the dollar pcking was removed the countries didn't know how to respond to it they didn't know how to really use the dollar because nobody had the dollar in their Reserve why because dollar dollar circulation in the market was very less now since dollar circulation was less in the market so what happened countries didn't have Dollar in their foreign Reserve now when you don't have Dollar in your foreign exchange then and you want to trade then how you going to trade and you don't have the money right meaning that when countries wanted to import something in dollar they couldn't do it so that basically slowed down the whole entire global economy now to to solve this problem okay to solve this problem before 1979 I'm going to go into all this very a little bit uh deta because this is very interesting thing before 1979 right right before the Iranian Revolution actually um us as a country we as a country we offered Iran a nuclear deal okay we were ready to make Iran nuclear and the Sha of Iran was there and Sha of Iran was Prett Pro West so we were of course ready to offer him a nuclear deal and all that's why you always suspect that Iran has new news but that's a whole different discussion all right now but why I'm telling you all this is I'm going to get to it right now so U when this happened right so the see the important question that we have to ask ourselves is this that there were op country there five op country founding OPAC countries right founding op countries are the ones Iran Iraq Saudi Arabia Venezuela and kuet okay these five countries were the founding members of now out of which and sorry Venezuela not not qu but Venezuela I'm sorry Venezuela okay now out of these countries okay we have bad relationship with Iran then Iraq we whacked Iraq sdam Hussein G Pon then we have Venezuela we have sanctions on Venezuela okay then we have Saudi Arabia right Saudi Arabia is under our defense and but and it's and even the relationship with Saudi Arabia is not very good right so the question is this how in 1979 we were able to get all these opic countries to sign oil for a dollar deal the deal was called oil for dollar meaning that when uh when this was this happened then under this deal um opic countries decided that they agreed that they're going to sell oil for dollar that was done so that dollar circulation in the global market can be improved and increased and now the question was that okay so the countries who don't have that much export and countries that uh that do not have export how they are going to get the dollar right because look you export you get the dollar then you go buy the oil in dollar right so what happens it's a closed loop so you constantly keep doing it but the countries that didn't have dollar they didn't have that much export like Sri Lanka for example right so what do we do to curve that to curve that that problem problem of negative dollar they came up with IMF IMF basically decided to give these countries loan the multilateral banks were created like World Bank and all these bodies were created so that loans will be given to these countries okay now why I'm telling all this this is I'm telling all this because the whole entire thing the dollar is very important right now the D the world order is of at first from 1945 till 1973 the world order was of United Nations World Order okay which was created by USA and few other countries but uh that's when the whole British colonies were removed because we as a country we asked other England to actually now so so over the years we what what we did is that after oil for dollar we needed countries that would actually consume the dollar and whatever we do we just so that we can print dollar and somebody else is out there who can consume we created treasury bonds for it and uh we created so we started to do business with countries like Brazil we started to do business with countries like China and today whatever China is we created China actually Why by asking them to manufacturer we started exclusively import from China I mean it was so much so in the beginning we started exclusively import from China and by giving them dollar but then as Chinese market started to become saturate we decided that okay let's invite other countries as well right so that we keep printing the dollar and these countries can consume the dollar that's how we became exporter of dollar and to maintain the to Cur to to actually work with the to deal with the inflation problem here every time we we were printing dollar dollar was losing its value just because there are countries that can consume the dollar but that that didn't mean that they were going to consume all of it so whatever dollar was left in the global market extra dollar that is right extra dollar that was left in the global market that became inflation that devalued the dollar now to curve the inflation counter the inflation problem we basically uh what I was going to say I just totally forgot Chain of Thought right so so to curve the inflation to counter the inflation problem so that inflation does not really go too high or anything so we started to give subsidies to these countries and subsidies as in import subsidies meaning that countries that will sell to United States and they are developing countries so we are going to give them uh we we will give them tax breaks the tariffs that is the Tariff that Donald Trump is talking about those are were the tariffs that were that those tax breaks that were given to these countries so that they keep selling us cheaper products and what we did is to maintain that cheaper product and to counter the inflation how do you counter the inflation by making sure that prices stay low or within the range within the reasonable range right now to do that what you do when you you totally kill the competition what was the competition competition was the local business so the local what we did we as a country we killed our own exports that were going to counter all this that situation that we are in today we killed all that by our own hands our own policies our own regul regulations we killed our own all own businesses and by allowing what allowing CH Chinese businesses or other businesses that are the countries that um that don't even follow that don't abide by our policies or want to work with us in a positive way right so so and we gave them the trade uh the the Tariff or trade tax breaks tariff breaks on import d and on export duties or anything else we provided them uh loans from our multilateral banks and all that that's why I was telling you because that's where the Tariff actually comes right so so that's how it will disrupt because if you start to apply 100% tariff and don't give tariff break or anything what's going to happen the supply chain is going to be disrupted why because countries will scramble immediately they're going to scramble to find the alternate so the bigger countries like bigger bricks countries most of these bricks countries are will be able to find Alternatives why because countries that have strong manufacturing then they already have the alternative like for example we will get into that later on right but once they start to find until that they find the alternative they will have to deal with the tar little bit but sooner or later they're going to go and that's that's when prices of all all the Commodities in this country are going to go up so the only way only way okay only way to save the dollar right now is to increase our exports there is no other way so if somebody tells you that oh this way that way we can play this loan that way or blah blah blah it's all Bs you cannot save the dollar without increasing the exports so when you see these semiconductor talks right the you might have heard from the president vice presidents and before right that United States is investing too much into right now semiconductors that's why we be supporting Taiwan as well why because if China takes Taiwan China takes control of Taiwan then China will have monopo on semiconductors semiconductor manufacturing and all and this is why this is why Taiwan is Shifting all its exports to different different other countries like India or us or some other European country somewhere like right but they are what they doing is they are not keeping their companies headquarters in Taiwan they're diversifying all that so in case say China decides something some some ill intentions right they decide something someday then uh they they will they will get nothing so so so that's that right now so in the short term shortterm it may show some benefits it may come countries May a little bit stop instead of you know D okay no we we're not going to do trade in dollar this that why because their their import is going to suffer I mean their export is going to suffer so their trade is going to suffer too so nobody wants to do that so maybe for some for a few years this may be fine but as as soon as countries start to find the alternative they're not going to with the high tariff right now especially the countries that have uh the countries that have a a positive or say where with the where us has a deficit of trade of balance balance of trade for example with China if you look at it right with China the deficit is of $300 billion meaning that China uh China exports us more and imports less and that difference comes that the difference is $300 billion so let's say China exports us say $800 billion and imports us imports from US $500 billion worth of stuff then that's like $300 billion doll but does China really uh does China really do that I don't think so I think that the it's mostly the the dollar that and the treasury bonds and all that China buys from us maybe here and there some products of McDonald's Burger King type of stuff but that's not called export man now second thing like India if with India deficit is $40 billion think about that uh and and and I think the way apple and all other companies have moved to India right now so I think that this deficit is going to go up actually meaning that India exports us and imports us the difference that comes down to is $40 billion right and this is like a little bit probably a couple of years old data but $40 billion so and this is going to go up over the years okay over the Year this is going to go up and with China it may come down but I don't think the decoupling with China is going to be possible so let's say let's say if uh uh if if us applies tariff on these countries right we are already in they we are already in deficit with these countries so if you apply one 100% tariff on these countries what they're going to do they import Less on us what they're going to do they're going to actually apply 100% tariff on our Imports too the products they are importing from us right so if they will apply 100% tariff on our products guess what our products will be out of Market we won't even have whatever import is left it will be gone that our products will be expensive and that's going to only kill our own industry so so like here like see Imports Electronics Machinery consumer goods textiles some of the stuff and then key exports from USA see aircraft Machinery agriculture products aircraft I think is BS though and maybe the the trainer aircrafts and all but that's about it but I don't think that we going to we selling them f16s and F22 Rafters or thing maybe Machinery agricultural Machinery maybe a little bit here and there but that's about it agriculture products then far and with India key Imports to USA Pharmaceuticals textiles gems jewelry IT services I mean it Services the remittance in itself is like $120 billion and then here aircraft no India hasn't bought bought any aircraft yet it's in talk but India does buy a g404 engine and then Machinery jet engine that is and agriculture products chemicals then there are some defense equipments like uh howzer and all that [Music] hitzer the machine the big gun right the hiters then few other things that I know of I think they order Apache and all but here's the here's the worst part uh that uh that they are ordered all this and then we haven't even delivered them and then we wonder why country don't trust us to do business with us then Brazil Brazil is there Brazil has surplus of 10 billion meaning that Brazil Imports more from us and exports less so which means that if Brazil decides to walk away from Dollar right away then Brazil will take the hit the with the with the with tariff but other than that but but Brazil I think is not going to do this thing because Brazil will as soon as Brazil I mean Brazil definitely do it when they have the alternative right now South Africa Surplus 1 to2 billion meaning that South Africa may be impacted by the Tariff but once again Africa is a very big continent and it won't be hard for South Africa to find the Alternatives quite frankly because if you look at this I key exports what we export is important here right Machinery Vehicles chemicals right it's all chemicals chemicals Africa is full of chemicals you can always buy that thing last of see he's what happens lots of times we do business with countries not because we cannot find that product uh somewhere else we do business with the countries because we want to have a good bilateral relationship with them just for the sake of a bilateral relationship a trade relationship to open that those channels we do business with them so so so so I don't think that any or any country should ever take this thing as a uh as a big deal that or take it for granted right that somebody's doing with business we are exporting this to this country so we can damage them or we can weaponize our Commodities or exports especially when when you have a BAL negative B def negative balance of trade with lot of countries so so so yeah so in short term it's it it may be effective in certain countries but it definitely it's not going to be effective on in the countries where it is we have a trade deficit and because this is something this was Tried by Trump and when they applied the when they increased the T tariffs on China and India India and China actually they increase tariff on our products their market so it became a whole trade war and it didn't end up well so that's a different story uh now now let's move forward now what are the longterm implications of it so before so before we get into this so here's the thing uh so you have to understand the balance of trade right I think if you understand the balance of trade a little bit then um lots of things will start to even make more sense balance of trade will be uh is something like U like I said right so a country exports to you and then they import from you right so let's say country exports $5 billion and imports $2 billion so the balance of trade will be 5 minus two that is like3 billion meaning that if country Imports uh less and exports more you then we have a deficit why because we are exporting them less and we are importing from them more but if the country is uh has more import from us and uh less export then it's a surplus all right now the long-term implications so so long-term implications will be like we talked about right the acceleration of Alternatives right so in the long term um instead of detering countries from uh this whole policy change and try country is trying to deal with it uh they are going to come up with the alternative because there's see here's the thing the very basic the the fundamental premise fundamental behind this whole dollarization is this to stop the weaponization of dollar as a currency and counter it right so if countries will be affected by the Tariff increase then clearly there is no counter right they're not countering it so well so and but but but and if we are if we are applying tariff then clearly countries are walking away and if countries are walking away then it's highly likely highly likely that they have the Alternatives so the whole soul the whole purpose the entire purpose of dollarization is to avoid this type of situation meaning that avoid uh unnecessary policies policies that really hurt other countries un totally biased policies or you know so these type of things that countries want to avoid that's why they are going with the de okay and also and why is that though right why all of a sudden dollarization became the buzz word why uh there were why there was a bricks why um why all of a sudden why the whole idea of dation came into picture anyway right lots of you people will say that it's because uh of sanctions on Russia and all that that's one aspect of it yes but uh what happened is this I'll tell you see when the 2008 economic crisis happened okay then all of a sudden Obama government decided to toally block to seize the the all the dollar access to all the countries globally for a brief period of time and when they decided to so that the countries don't withdraw the dollar right because they will need the dollar and if and when the recession is there then us cannot print the dollar right if you cannot print the dollar then uh how the countries are going to have the dollar to really use so what they will do they will try to cash in from the right so when they try to cash in from the US Banks what's going to happen it's going to create a deficit of dollar in our our market right and when it's going to create deficit of dollar in our Market what what does that mean it means that when it creates deficit of dollar in our Market meaning that considering our Market is a credit based Market okay so you might have seen lots of people buying all these lots of exotic items lots of expensive items but where do they buy it from they buy it from credit cards or loans right everybody goes everybody has car note they have mortgage they have um credit card bills all kinds of bills right but where does that credit card bill come from who pays that credit card credit card bill gets paid by the company that authorizes the credit card that is right so what do you do visa and Master Card all the Visa or Master cards they are the facilitator right what they do they act as a middleman between the lender and you how is that how that happens you have the credit card you have a Visa credit card and when you have a Visa credit C you take it and you go and swipe it what happens somebody gets the bill somewhere you get it too but somebody gets the real Bill and they have to pay but in return what they do they you have to pay them back so they rely on the interest rate the interest that they make out of this thing so let's say there is a billionaire somewhere billionaire says that hey I will contribute to Visa's funding or visas credit uh payments so that was Layman Brothers 2008 and lemon Brothers then there were other companies too right lemon Brothers basically they depended on the housing market okay housing mortgage and all and when people uh when Bill Clinton became the President Bill Clinton basically removed some of the regulations and what he did when he removed the Reg regulations then slowly and slowly the whole housing market it be it build up right that's why Bill Clinton Bill Clinton terms budget was in Surplus so people may think that oh it's a good thing no it's not a good thing Surplus budget is never a good thing Surplus budget simply means that you have excess dollar that is unus and if you have unused meaning that already you are basically saying that hey dollar value is going to go going to see the Dollar's value is going to go down and it's going to lose its value so but uh first term second term we saw those things and then by the time we could see the real thing Bill Clinton was then George Bush became what what George Bush did George Bush had to go for for the wars so to spend all that the extra dollar that was printed that was sitting in in Surplus that's why I recall like George Bush was saying um signing trillion dollars for Iraq war trillion dollars for Iraq war really so what was all that anyways that's not the discussion but so so this is what happens right so in 2008 when Obama stopped the government US Government stopped um the access of dollar for the countries then they they relying on dollar US dollar for their Imports and all right especially for the energy sector so what they will do they will have to do something right that was the first time when they realized that that there is a need for alternative dollar why because if they seiz it because up until that Point nobody thought that okay because there was a Unwritten understanding even with the written understanding also that the dollar that are sitting in the US Banks will not be seen like right now it happened right in Russia Ukraine war Russ all the Russ hard earn dollar they were honest earn dollar honestly earn dollars okay those dollars were all seized and now that dollar is being given to Ukraine on the name of what hell so but anyway so in 2008 for the first time they realized this and by by 2010 when South Africa joined bricks so bricks was formed and Goldman sax actually is the should be given the credit for it actually Goldman Sach basically came up with this whole idea of bricks and then after that countries were like hey G7 is not and and Russians were there see just G7 used to be G8 and then Russians were kicked out of it Russians were kicked out of it so Russians decided that hey let's create our own block so bricks came into picture five countries decided to form bricks and when they form bricks uh and because of 2008 everybody suffered from it so they were all unanimously they were like okay no I think we will have to find an alternative to we have to solve this problem one way or the other and then 2014 and between 2008 and 2014 Chinese economy was uh basically soaking wet with the US dollar they were being they have been sucking US dollar uh like a sponge you know meaning that they were sucking US dollar so much so that there are cities after cities in China that are empty nobody lives China is running your bullet trains in the areas where nobody lives but why because they had the extra dollar now they had to put it and so but by the time China was also facing the problem right and so China was also joined China also became serious 2014 China made some more regul regulatory changes China made some certain other changes in 20 5 in their policies and if you map these things then you're going to see that every time there has been a recession China had finally when China was like okay we cannot make any further changes in our economic policies to accommodate the dollar China and by 2022 when the whole Russia Ukraine thing happen and hardcore sanction and all Russian economy automatically dollarized and Russia is one legitimate country that actually can that is completely self-reliant whether it is energy whether it is food a it Russia is 100% so uh but anyway so uh so that's how the whole dollarization started okay now this thing now at this point when if you apply tariffs what's going to happen this whole process will further be accelerated even the countries that that are still doing business with us after doing increasing the tariffs and just because we want to um we want we don't like their way of doing business uh it's not it's not going to be a very good idea okay and uh as it is like uh like we have lots of hostilities here and there because of the bad foreign policy for the most part um you will see that this move could fuel like uh anti-American sentiment it's already there and this is only going to fuel it you know the repercussions now in global trade I don't know I don't think that there will be much impact on the global trade why because simply countries will simply stop EXP supporting things to us like you remember in 1973 there was a oil embargo on us right let's say Saudi Arabia decides to Saudi Arabia is already actually Saudi Arabia has already started to do business in Yuan okay and UA has already started to do business in Duram their own currency so Durham they call it Durham so they have started to do sell sell oil in teram too and uh so if you apply a tariff on all these countries what they're going to do they're going to Simply apply the oil embargo on us what what's going to happen you won't get any oil so some of the politicians who are anti fracking right will say that let's stop the fracking but we will have to eventually Frack the oil get all our oil to stabilize our economy okay so so there will be commodity embargos there will be a commodity War that's coming actually weaponization of commodities have to understand this that that up until now we were using dollar as a commodity we were weaponizing the dollar but now what's going to happen is that if we don't work on our own exports and uh we do we didn't work on our own internal consumptions then I can tell you that a commodity war is coming what what's going to happen with the commodity War meaning that the countries where we have like I showed you right that there are countries where we have a negative balance of trade deficit based balance of trade right so let's say I'm not saying it will happen but let's say just hypothetically decides to or China decides let's forget about India let's say China because China is makes more news right China decides to export lots of stuff to us China says that okay we are not going to export you anything right so what can you do what are your options then you'll have to immediately scramble even to buy underwear from some other country and if those countries are also doing trade in you want and they say that hey we are not going to do say export it to you either let's say let's say China says no we go to Bangladesh Bangladesh says that no we are not going to export you either the China asked us not to right so guess what we'll if you don't have under underwear manufacturing anywhere nearby in our friendly Nations at least then guess what we will be living without underwears right so commodity war is coming believe me there will be a weaponization of Commodities right so you have to think about it the only way to save dollar and save economy is to increase the internal consumption by increasing production in this country have to start producing we'll have to start exporting and we will have to start consuming within our country and to consume within our own country have to increase so think about it now uh now impact on global trade I mean it's pretty I think I have talked about this thing at length already impact on GL global trade and the impact on global trade will be very simple commodity Wars there will be commodity War commodity could be oil commodity could be simple as simple as underwear commodity could be as simple as rice or wheat commity could be Pharmaceuticals pharmaceutical because India is the second or third largest manufacturer of general pharmaceutical General Pharmaceuticals are the medicines that are manufactured in India and they are exposed orted to countries so that uh the prices of those medicines are cheap stay cheap each of of a common man like for example covid right there are uh pretty disheartening to know this thing that all these countries who brag about their things that blah blah blah they didn't during the covid time they didn't even have proper Co vac manufacturing infrastructure that that can actually manufacture covid vaccines in a very large large capacity to India and India started to manufacture those covid vaccines Pro started to provide to Europe UK they provided to us so so so yeah so this happen right but if uh you immediately get into this thing uh they start to apply tariff and start to do certain moves that are not very friendly moves soal right we we will get into commodity War right because you read what you saw they've been applying sanctions to all the countries and all that they had I mean as a country us has applied sanction on India us has already has applied sanction in the past and 98 99 around that time frame then they bu sanction on China pretty much any country you name it like sanctions have been there so these things are going to lead to tariff and all that is going to lead to what the commodity wall it's going to happen eventually then now what's going to happen into the US economy as a result see first thing first is like I said prices of things are going to go up repercussions of tariff okay leads to price increase in import immediately especially from the countries where we are in deficit going to immediately is going to increase the prices of now how are you going to maintain keep the price of those goods low going to keep those prices of price of those goods Low by manufacturing low or you go and talk to uh neighboring countries like Mexico or Nicaragua or Caribbean somewhere wherever you see fit you'll have to go to these countries and talk about and have give them some deal manufacture things so that uh so that you can maintain the prices prices are float the inflation in check okay um this will also like slow down certain sectors right so because US economy heavily depends on Foreign imports and why it depends on for heavily depends on foreign import let me give you a very crude types I don't have the exact numbers but I'll give you the population of India is four times that of United States but consumption of United States is four four times that of why is that have to increase the consumption so much so so that we can even the L of things that we only goes to waste only goes to waste and might guys might have read about it like like Amazon for example right Amazon products that we return they never go back to the warehouse they go somewhere else and that in itself is a whole different business lot of things go to waste why we have to waste things so that dollar can stay alive that's all it is oh if when the countries will walk away from Dollar there will be no waste won't be able to import that much of stuff then we will be importing everything that is needed right so and all this is going to lead to basically inflation it's going to lead to commodity Wars it's going to lead to if we didn't improve our uh manufacturing local manufacturing then we improved our local manufacturing then I think that survive or it will survive whether dollar is a reserve currency or not that won't really matter but I think that right now dollar is at what 58% market share and if countries let say countries leave dollar decide to D dollarize still I think it will be market share is still will be up to% large number so what you never know but we will definitely see the impact of it it will be quite visible and it's already visible I think and uh dollar may lose its Reserve status why Reserve status because dollar these IES agreed to accept dollar as a reserve currency right now since the countries agreed to be the dollar for the dollar to be the reserve currency that was because they said okay we will use it but now if no country will use the dollar then uh you can call Dollar all you want to call I mean all you want like reserve currency BL currency this currency nobody's using it then it has no value supply and demand right if demand is not not there for dollar you can increase the supply but if you increase the supply happen of dollar Bel so there will be that will be the impact on US economy now being said that uh I think that uh though if the I think it will be in fact in the in the in in next in this decade like up to 2030 I think that we will constantly see that impact it's going to happen okay it's going to happen interest rates are not going to come down they're not going to come down until 2035 I me forget about that uh you know the 3.6% 2.5% interest the time is long gone that will never happen Okay interest rates are not going to come down below 5% but at best you're going to get 5.5 5 if that but uh I think after 2030 when you increase when we will have our own exports ready could be sooner than that too but you'll have to have your own exports in order to save uh the dollars dollar Reserve status still is not going to be there there will be blocks and all already formed um so that's not going to work now the policy implementation right so imposing 100% tariff on goods from all countries shifting away from the US dollar would be challenging to enforce which is true I mean it's going to be very challenging to enforce because like I said because of the reasons that we talked about right uh like there is a saying right like Beggars are not choosers right if you don't have the options then you are not going to go choose and say that and try to dictate your own terms you cannot dictate your own terms when your own currency is um its market share is at stake and if you're going to sanction all the major countries I mean Russia is a major country imagine having two to three trillion dollars of dollar uh dollar transaction from in in Russia through Russia every year that after you apply sanction what that two to three trillion dollar worth of dollar transaction was killed immediately meaning that when that happened meaning that we killed our own currency we are Our Own Worst Enemy that's the problem okay the dollarization be is being driven by geopolitical changes yes the rise of alternative currencies like youan and then increasing adaption of digital currencies yes and we have blockchain and all there so so now with blockchain Payment Systems also it it is a lot easier and more secure to really find the Alternatives of of Swift systems and third and most important important thing that's happening is supply chain now what's happening in the supply chain is that up until now all the O the supply chain that was going through ocean canal and all that right now after China has made its naval base in jibuti that the entrance from this side it's at the entrance at at basically let's just say that it's a entrance of at the end of su Canal so to counter this what we have done we have already created a corridor landbased Corridor so now all the trade is Shifting towards the land land through that Corridor that goes through the land friendly countries on the and Ocean trade is going to be only in Indo Pacific Asia Pacific the whole concept of the Asia Pacific that was the lane the shipping Lane that was going to China South China Sea that's going to be pretty slowed down but Indo Pacific will be the thing but there will be alternative route alternative in fact I would say that's the main route will the land that Middle East Corridor Middle East Corridor that goes through UA Saudi Arabia Jordan Israel then through Europe that's why you are seeing whatever you are seeing right now Israel Hamas war and all the nonsense that you're seeing that's happening because it's a cleaner process it needs to be cleaned up to make sure that this whole Corridor remains untouched whole project the project is being financed by who by G7 in response to brri China's B and in last year India joined this thing too so they called it iMac India Middle East Corridor and then it's going to be further extended towards Bangladesh so Bangladesh Prime Minister was trying to do business and you won sh Casina so sh Casina is also gone there was a regime change sh Cas is gone because he was trying to do trade in and uh I mean Trump said the 100% tariff but somebody else said that hey regime change if you don't use dollar so so it's going to go all the way indopacific will extend all the way to the Australia okay and you will see changes pretty much and I'm telling you this is going to happen in Myanmar also something that's going to happen in Myanmar as well all this region will be stabilized under the full control ofia and the United States for a clean cut trade or a clean cut supply chain because Russia Ukraine war has basically blocked the whole entire Global Supply Chain at this point so uh so supply chain is going to be also impacted and to and countries are right now looking for land Corridor landbased corridors that are sanction free so when you apply sanctions then what happens is that all the all these shipping lanes all the ships that are being that cargo ships that are used to transport things those are basically uh insured by Western companies okay so most of these insurance policies are provided by the Western countries 85% of say so so to to counter that countries have come up with the landbased corridors like bri is there you have insc there then now it is IM and all it's also landbased so what happens is that you go through the friendly country so this way if somebody applies sanctions you don't have to worry about shipping Lane you don't do you don't have to worry about uh countries don't have to worry about uh insurance policies and all that right so so all that is basically being tackled slowly and slow slowly it has actually increased faster now and so you're going to see lots of geopolitical changes happening the talk about each of those in coming podcast now what's the conclusion of this thing right conclusion is that it may look like it will work in short term the 100% tariff on once again I have not heard president Trump say this thing I haven't heard it only thing that I have heard I have found videos on was when he said that uh we will be a tariff nation and also we will apply tariffs on cars those two things those two separate videos I have seen I have not seen the 100% tariff on so I don't know if it is made up or what not but just so you know just to clarify okay uh so so this whole 100% tariff could exert short-term pressure but long-term visibility is just not going to happen okay it will only accelerate the dollarization process and it's going to actually uh uh separate the countries more away from us to do the trade exactly what we would want them to do right that if you're not doing trade in dollar or you're walking away from Dollar walking away from Dollar simply means that you're not doing trade with okay because if any country let's say the whole D doll d dollarization or doing the trade in natural in their National currency means that uh let's say in that let's say us is doing trade with China if China is selling something to us then uh we are going to buy something from China then we will buy in Yuan and if China will buy something from us we will they will buy in dollar that's that's the whole thing now it's not going to be that okay you can you sell us something and then we'll buy it in dollar and we will sell it in dollar as well that's not going to happen anymore okay so that's what the whole premise of dollarization is these are going to let's say Russia and India are doing trade then uh let's say India is buying all kinds of oil from Russia right now right so what what India is doing is buying it in rupees and and in return Russia is buying stuff from in like India is buying stuff Russia is buying stuff from India and rubal like that so that's the that's the currency exchange so uh so so yeah so so whole tff thing is not going to fly yeah maybe with the cars because we are the largest consumer of the cars so anybody who wants to sell us their cars to us may work but but there are lots of other countries as countries their GD increases like for example India or Indonesia they lots and lots of country Mexico Mexico's GDP is growing Brazil's GDP is growing big time so these countries when their GDP grows their economy improves these countries become financially more well worse then what going to happen they will consume the cars too so even if you apply tariff on cars then countries that are manufacturing cars and vehicles they're going to go find their market so the whole multi-polar world the idea of multipolar world is that that find multiple consumers find alternatives to your products rather than just rely on one particular country to be whole idea of globalization and a centralized consumer Market is gone centralized manufacturing market and a centralized consumer Market on consumer Market was United States and Manufacturing was China is gone going to go away so so tariff is just a big no no I hope that doesn't happen and we think before we do any such thing because inflation is not very good right now and we don't want more of that right so I hope guys you guys enjoyed the podcast and uh I'll talk to you in another video another podcast oh goodbye take care like And subscribe