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Over the past two years, the White House has initiated trade disputes, insulted allies and enemies alike and withdrawn from or refused to ratify multinational treaties and agreements. It has also expanded the reach of its unilaterally imposed rules, forcing other nations to abide by its demands or face economic sanctions.
While the stated Trump administration intention has been to enter into new arrangements more favorable to the United States, the end result has been quite different, creating a broad consensus within the international community that Washington is unstable, not a reliable partner and cannot be trusted. This sentiment has, in turn, resulted in conversations among foreign governments regarding how to circumvent the American banking system, which is the primary offensive weapon apart from dropping bombs that Washington has to force compliance with its dictates.
The blowback from the Make America Great Again campaign, particularly as the flip side of the coin, appears to be that the “greatness” will be obtained by making everyone else less great.
At the recently concluded G20 meeting in Tokyo, Britain, France and Germany announced that the special trade mechanism that they have been working on this year is now up and running. It is called the Instrument in Support of Trade Exchanges (Instex) and it will permit companies in Europe to do business with countries like Iran, avoiding American sanctions by trading outside the SWIFT system, which is dollar-denominated and de facto controlled by the U.S. Treasury. And what if the dollar ceases to be the world’s trade and reserve currency? It would mean that the treasury might have to cease printing surplus dollars and the United States’ ability to establish global hegemony on a credit card might well be impeded.
Ideally, judicious and prudent negotiations, not threatening pontification with Iran, will prevail.