Reciprocity or retaliation? The semantics of US trade power

Mail & Guardian

4 days ago

Trump's trade tantrums reflect the US president's transactional politics. Photo: File
It's hard to decide what's more surreal — that the US is threatening 50% tariffs on Brazilian imports in the name of 'reciprocity' or that global markets, once jittery at the mere whisper of Trumpian trade tantrums, are now brushing off these ultimatums with a shrug and record-breaking rallies.
In a letter campaign launched on 7 July, the US administration warned dozens of nations that, unless bilateral trade deals were reached by 1 August, punitive tariffs would be unilaterally imposed. Brazil, the current chair of Brics and a nation with a sizable trade deficit vis-à-vis the US, was told in no uncertain terms that its exports would be slapped with 50% tariffs. The premise is both stark and familiar: comply or pay.
But this time, something has shifted. Unlike the uproar that followed the first wave of tariff threats in April — when emergency summits and legal challenges rippled across the globe — the second wave has been met with a remarkable degree of composure. The world isn't retreating. It's recalibrating.
Take Brazil, for example. President Luiz Inácio Lula da Silva, just days after hosting the 17th Brics Summit in Rio de Janeiro, responded with restraint. 'We don't want an emperor,' he quipped, declining to engage in crisis theatrics. It was a sharp, yet composed, rejoinder to an ultimatum that would once have triggered panic.
This moment marks more than defiance, it signals a strategic turning point. The Rio Declaration, adopted unanimously by Brics nations and invited partner countries, issued the bloc's clearest rebuke yet of US trade practices. 'We are seriously concerned about the rise of unilateral tariffs and non-tariff measures, which distort trade and violate WTO [World Trade Organisation] rules,' the declaration read. More than rhetoric, it outlined a coordinated vision — strengthen local currency trade, expand the role of multilateral development institutions and build resilient frameworks beyond the reach of US coercion.
The contrast couldn't be clearer. While Washington leans on tariffs as a blunt tool of pressure, the Global South is coalescing around a more deliberate, cooperative trade vision.
It's worth interrogating the logic behind these US threats. The idea that trade imbalances are inherently unjust and must be 'corrected' through punitive measures is a populist oversimplification. Economies specialise, consumers choose and deficits emerge naturally. Punishing countries for selling what Americans want to buy is not reciprocity – it's retaliation.
Moreover, Washington's coercive strategy stands on shaky legal ground. The US Court of International Trade ruled in May 2025 that the administration's use of emergency tariff powers was incompatible with trade law. Yet, legality seems increasingly irrelevant in the face of a foreign policy that views the WTO not as a rules-based arbiter, but as an inconvenience.
And still, the global economy hums. The Dow and Nasdaq have posted historical highs. Inflation remains subdued. Emerging markets, far from fleeing, are holding their ground. It's tempting to believe the tariffs are toothless. But that would be premature.
Beneath the surface, a quieter reordering is underway. Countries are no longer scrambling to appease Washington. They're building buffers. From the Association of Southeast Asian Nations's supply chain diversification to the African Continental Free Trade Area's intra-regional push, nations are insulating themselves — not just economically, but diplomatically.
The Brics bloc is central to this shift. No longer just a symbolic grouping, it has taken tangible steps toward a multipolar economic architecture. New initiatives unveiled in Rio — such as the Brics Pay platform, the Multilateral Guarantee Mechanism and ethical AI cooperation — are not mere declarations of intent. They are building blocks of a system that does not rely on Western-dominated institutions for validation.
China's role in this transformation is pivotal. As the world's second-largest economy and a founding Brics member, China has consistently championed win-win cooperation over confrontation. Its advocacy for local currency-based payment systems, climate financing for the Global South and expanded youth and trade exchanges underscore a strategic, long-term vision. One not built on coercion, but on connectivity.
India, too, proposed a forward-looking four-point agenda for the 2026 Brics Summit it will host: demand-driven development financing, climate adaptation support, ethical AI regulation and a framework for South–South food security. Together, these form a quiet, yet deliberate, counter-narrative to the transactional diplomacy of tariffs and threats.
It's important to note that this isn't anti-Americanism. It's post-Americanism. Countries are not trying to isolate the US, they are trying to insulate themselves from its volatility.
And the backlash is not limited to Brics. The EU, long seen as a compliant economic partner of the US, is beginning to show signs of fatigue. German Chancellor Friedrich Merz has floated anti-coercion instruments aimed at retaliating against US overreach in public tenders and service sectors. Canada is considering reciprocal tariffs on US steel and agriculture. Even smaller nations like Malaysia are defending domestic policy space while exploring countermeasures.
This isn't surrender. It's maturity. The world is learning that the US, for all its economic might, cannot permanently bend the global system to its will — at least not without consequences.
Of course, the asymmetry of power remains. A 50% tariff from Washington still packs a punch. But its effectiveness as a shock tool is eroding. Countries are beginning to treat American threats not as destiny, but as one variable among many.
If anything, the US approach might hasten what it fears most: a decentralised, multipolar trade regime. By using tariffs to enforce compliance, Washington is nudging others towards de-dollarisation, alternative payment networks and regional trade accords.
Already, energy deals between Russia and China are settled in yuan and rubles. India pays for oil in dirhams. Brics's expansion to include Argentina, Egypt and the United Arab Emirates — and talks with Saudi Arabia as a strategic partner — further signals a pivot toward greater autonomy from Western leverage.
As the 1 August deadline nears, some nations could still pursue tactical deals with Washington. India is reportedly close to a metals agreement. Pakistan is finalising a tariff adjustment deal. But the broader picture is one of divergence, not capitulation.
The Rio Declaration summed it up best: 'Only when more and more economies issue a unanimous voice of condemnation and more and more actions form a counter-force can bullying be stopped.'
The world is not panicking. It is prepared. And in that preparation lies not just the defiance of the present, but the blueprint of the future — a future where trade is negotiated, not dictated; where cooperation triumphs over coercion and where no nation, however powerful, can hold the global economy hostage to its whims.
Dr Imran Khalid is a freelance columnist on international affairs based in Karachi, Pakistan.