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How the U.S. Buys the World for Free

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Paris (Imran Y. CHOUDHRY) :- Former Press Secretary to the President, Former Press Minister to the Embassy of Pakistan to France, Former MD, SRBC Mr. Qamar Bashir analysis : In the vast theater of global trade, a silent drama unfolds every day: the United States buys real goods and services from across the world, not with hard-earned commodities or gold-backed guarantees, but with paper dollars—printed in abundance, backed by confidence, and accepted globally as the world’s reserve currency.
For decades, this privilege has placed the U.S. in a position of unrivaled economic power. It can run persistent trade and budget deficits without suffering the traditional penalties other countries face, such as currency depreciation or reserve depletion. With over 58 percent of global central bank reserves held in dollars, according to the International Monetary Fund, and more than $7.4 trillion in U.S. debt held by foreign governments, global demand for dollars allows the U.S. to print money and buy real value from the rest of the world. Whether it’s a smartphone from China, oil from Saudi Arabia, or pharmaceuticals from India, the U.S. pays for these tangible goods with freshly minted dollars—costing it virtually nothing beyond the ink and the click of a keyboard.
In addition to its ability to purchase real value with fiat currency, the U.S. has increasingly turned to tariffs as a second revenue stream. President Donald J. Trump’s administration has aggressively imposed tariffs on hundreds of billions worth of imports—primarily from China, Canada, India, the EU, and Mexico. These tariffs, averaging 15 to 25 percent, not only raise costs for exporters but also serve as a powerful fiscal tool for the U.S. Treasury.
However, this economic privilege does not come without backlash. The drive toward de-dollarization—led by countries like China, Russia, and Brazil—is a direct response to the United States’ weaponization of its currency. The U.S. Secretary of State Senator Marco Rubio admitted that if countries stop using the dollar, the U.S. would lose its ability to impose sanctions on them.
The U.S. currently has sanctions in place against countries representing nearly a quarter of the world’s population, including China, Russia, Iran, Venezuela, Cuba, Nicaragua, Syria, and Zimbabwe restricting their ability to trade, causing domestic inflation and a collapse of industrial capacity. In response, many of these nations have begun constructing alternative financial systems, exploring cross-border payment networks independent of SWIFT, increasing bilateral trade in non-dollar currencies and off loading their dollar reserves.
Suppose, in a hypothetical but increasingly possible scenario, major global powers collectively decide to dump their dollar reserves in protest. Let us assume $4 trillion worth of reserves are released into circulation. If the U.S. refuses to buy back these dollars—as it has no legal obligation to do so—the entire burden shifts to open currency markets. The consequences of such a move would be swift and profound.
For the countries dumping dollars, the sudden oversupply would drive down the value of the dollar by 20 to 30 percent. Their own dollar reserves would lose value rapidly, resulting in capital losses of hundreds of billions. China alone, holding over $850 billion in U.S. debt, could see a $250–300 billion wipeout in reserve value overnight. At the same time, their national currencies would strengthen, making their exports more expensive and less competitive, thereby triggering trade slowdowns. Domestic instability and inflationary pressure would follow, especially in emerging economies.
The United States would not be immune to the fallout. As the dollar weakens, the cost of imports would rise sharply, driving domestic inflation to perhaps 5 to 7 percent annually. Interest rates would surge as the U.S. government tries to stabilize its currency and attract debt buyers, dramatically increasing the cost of servicing the national debt. With total federal debt exceeding $34 trillion, even a modest 2 percent increase in rates could cost the U.S. over $600 billion annually in additional interest payments. Financial markets would face severe volatility, and the Federal Reserve would be forced into emergency interventions.
Both sides suffer in this scenario, but the countries dumping dollars would experience the most immediate and severe pain. The United States, due to its institutional, military, and technological advantages, would endure longer. Thus, retaliatory dumping of the dollar would amount to a self-inflicted wound.
A more strategic and potentially sustainable path would be for the world to gradually pivot away from the dollar altogether. In this scenario, over the next decade, countries form a consensus around a new reserve system—perhaps a gold-linked BRICS coin, a central bank digital currency, or a commodity-backed blockchain token. Oil is priced in yuan or a digital euro. International contracts are settled in diversified currency baskets. The reliance on a single nation’s currency would fade, distributing global financial power more equitably.
The consequences for the U.S. would be significant. Losing its reserve currency status would mean losing the exorbitant privilege of paying for imports with printed dollars. Demand for the dollar would contract. Inflation would rise. Interest rates would surge. Government spending would need to be curtailed or financed through real productivity, not limitless debt. Wall Street’s global supremacy would diminish, and American soft power would decline. Yet, for the rest of the world, this could mean a more balanced global trade system, one not subject to the whims of a single national monetary policy.
This raises a deeper philosophical issue: should global trade be conducted based on fiat currencies at all? A more equitable system would measure international trade not in symbolic reserve currencies, but in real economic value. A nation exporting $1 billion worth of steel, for example, should receive $1 billion worth of equally valuable goods or services—not just fiat notes that can be printed or devalued at will. This “value-for-value” model would eliminate the distortions caused by currency manipulation, inflation, and speculation. It would foster genuine reciprocity, reduce inequality, and align global trade with tangible economic contributions rather than geopolitical leverage.
Such a system would require a new global accounting architecture—perhaps enabled by artificial intelligence, digital ledgers, and multilateral oversight. While ambitious, it is not an unreachable ideal. In an age where technology is redefining commerce, communication, and currency itself, transforming how we value trade could be the next step toward a truly just economic order.
So, is the United States looting the world with both hands? Arguably, yes. One hand pays for global goods with fiat dollars backed by trust rather than labor or materials, and the other hand collects tariffs and imposes sanctions on those same suppliers. This system has allowed the U.S. to enjoy unmatched economic privilege while exporting inflation, volatility, and fiscal burdens to others.
Yet retaliation through abrupt de-dollarization would only heighten global instability. A gradual, deliberate creation of a new, multipolar reserve system—paired with a shift to value-based trade—offers a more sustainable path. It promises not only financial fairness but also geopolitical balance, autonomy, and mutual dignity.
Until that transformation is realized, the world continues to subsidize America’s monetary empire—while the United States continues to collect wealth with both hands.

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What Hungary’s Orban did – and didn’t – get from Trump

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On the surface, the Hungarian prime minister’s trip was exactly what he went to Washington for: luxuriant praise and an exemption from sanctions on Russian oil, gas and nuclear supplies.

And all that just five months out from a difficult election.

Look closer, however, and the picture is less clear cut. The US side struck a hard trade deal – and an expensive one for Hungary.

And there’s no progress on Viktor Orban’s biggest headache: ending the war in neighbouring Ukraine, and with it the long shadow the conflict casts over Hungary.

Let’s look first at Orban’s key win – an exemption from US sanctions, which a White House official told the BBC was time-limited to one year, although Péter Szijjártó, Hungary’s foreign minister, said would be indefinite.

The time span is interesting. Trump clearly wants to help his friend win the election in April. And the exemption even partially dovetails with the European Commission demand to all member states to end the import of Russian oil, gas and nuclear fuel by the end of 2027.

What is missing, from an EU perspective, is any political commitment from Orban to meet that demand – a commitment made and fulfilled by the Czech government. And the EU is trying to tighten energy sanctions – to the fury of Hungary and Slovakia.

Away from the media spotlight, the Hungarian energy company MOL has been upgrading two of its refineries – Százhalombatta in Hungary and the Slovnaft facility in Bratislava – to process Brent crude instead of the high-sulphur Urals crude which flows through Russian pipelines.

On Friday, MOL said 80% of its oil needs could be imported through the Adria pipeline from Croatia, albeit with higher logistical costs and technical risks.

So Orban’s argument, which so impressed Trump, that Hungary, as a landlocked country, has no alternative to Russian oil may not strictly be true.

Overall, Hungary and Slovakia have together paid Russia $13bn (£10bn) for its oil between its full-scale invasion of Ukraine in February 2022 and the end of 2024.

The one-year window granted by the US is nevertheless a valuable respite for Hungarian households this winter.

Orban told pro-government reporters who travelled with him to Washington that otherwise utility bills “could have gone up by up to three times in December”. Capping those bills by various means has been a central plank of his popularity in Hungary since 2013.

Under the US exemption, Hungary can also continue to buy Russian gas through the Turkstream pipeline, which traverses the Balkans, and pay for it in hard currency ($185m in August alone) using a Bulgarian loophole. Orban has agreed to buy LNG from the US worth $600 million, according to Bloomberg.

Another key part of the Washington deal is nuclear.

Hungary agreed to buy US nuclear fuel rods for its Paks 1 nuclear power station (at a cost of $114m), in parallel to those bought from Russia’s Rosatom and France’s Framatome.

Russian plans to finance and build the nuclear extension, called Paks 2, have been long delayed by technical and licensing issues. The US agreement to lift all nuclear sanctions on Hungary may help restart that project, but thorny problems remain.

Hungary has also agreed to buy US technology to extend the short-term storage of spent nuclear fuel at Paks for between $100m and $200m.

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US to boycott G20 in South Africa, Trump says

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Donald Trump has said the US will not attend the G20 summit in South Africa over widely discredited claims that white people are being persecuted in the country.

The US president said it was a “total disgrace” that South Africa is hosting the meeting, where leaders from the world’s largest economies will gather in Johannesburg later this month.

South Africa’s foreign ministry described the decision by the White House as “regrettable”.

None of South Africa’s political parties – including those that represent Afrikaners and the white community in general – have claimed that there is a genocide in South Africa.

Trump posted on his social media platform Truth Social: “It is a total disgrace that the G20 will be held in South Africa.

“Afrikaners (people who are descended from Dutch settlers, and also French and German immigrants) are being killed and slaughtered, and their land and farms are being illegally confiscated,” he wrote.

“No US government official will attend as long as these human rights abuses continue.”

Trump had earlier said South Africa should not be in the G20 at all, and that he would send vice-president JD Vance, instead of attending himself.

But now the White House says no US official will go.

Reuters  Cyril Ramaphosa sits in the Oval Office next to Donald Trump in May 2025.
Donald Trump confronted South African President Cyril Ramaphosa in May

Every year, a different member state hosts the G20 and sets the agenda for the summit – with the US due to take its turn after South Africa.

The South African foreign ministry said in a statement: “The South African government wishes to state, for the record, that the characterisation of Afrikaners as an exclusively white group is ahistorical.

“Furthermore, the claim that this community faces persecution, is not substantiated by fact.”

Since returning to office in January, Trump has repeatedly accused South Africa of discriminating against its white minority, including in May when when he confronted his South African counterpart Cyril Ramaphosa in the Oval Office.

The Trump administration has given Afrikaners refugee status, stating a “genocide” is taking place in South Africa. Last week, the White House announced plans to cap refugee admissions at a record low, and give priority to white South Africans.

South Africa’s government said the claims of a white genocide is “widely discredited and unsupported by reliable evidence” and pointed to the “limited uptake” of this offer by South Africans.

The claims were dismissed as “clearly imagined” by a South African court in February.

The G20 was founded in 1999 after the Asian financial crisis. The nations involved have more than 85% of the world’s wealth and its aim was to restore economic stability.

The first leaders’ summit was held in 2008 in response to that year’s global financial turmoil, to promote international co-operation.

Now the leaders get together each year – along with representatives of the European Union and African Union – to talk about the world’s economies and the issues countries are facing.

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Conservative justices sharply question Trump tariffs in high stakes hearing

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Donald Trump’s sweeping use of tariffs in the first nine months of his second term was sharply questioned during oral arguments before the Supreme Court on Wednesday.

Chief Justice John Roberts, and justices Amy Coney Barrett and Neil Gorsuch – three conservative jurists considered swing votes in this case – peppered US Solicitor General John Sauer, representing the president’s administration before the court.

They were joined by the court’s three liberal justices, who also expressed scepticism about whether federal law – and the US Constitution – give the president authority to unilaterally set tariff levels on foreign imports.

“The justification is being used for power to impose tariffs on any product from any country in any amount, for any length of time,” Roberts said.

If the court ruled for Trump in this case, Gorsuch wondered: “What would prohibit Congress from just abdicating all responsibility to regulate foreign commerce?”

He added that he was “struggling” to find a reason to buy Sauer’s arguments.

In a possible sign of case’s complexities, the hearing stretched almost three hours – far longer than the time formally allotted.

Arguing over ‘country-killing’ crises

The case centres around a 1977 law, the International Emergency Economic Powers Act (IEEPA), that Trump’s lawyers have said gives the president the power to impose tariffs. Although the Constitution specifically vests Congress with tariff authority, Trump has claimed that the legislature delegated “emergency” authority to him to bypass longer, established processes.

Sauer asserted that the nation faced unique crises – ones that were “country-killing and not sustainable” – that necessitated emergency action by the president. He warned that if Trump’s tariff powers were ruled illegal, it would expose the US to “ruthless trade retaliation” and lead to “ruinous economic and national security consequences”.

Trump first invoked IEEPA in February to tax goods from China, Mexico and Canada, saying drug trafficking from those countries constituted an emergency.

He deployed it again in April, ordering levies from 10% to 50% on goods from almost every country in the world. This time, he said the US trade deficit – where the US imports more than it exports – posed an “extraordinary and unusual threat”.

Those tariffs took hold in fits and starts this summer while the US pushed countries to strike “deals”.

Lawyers for the challenging states and private groups have contended that while the IEEPA gave the president power to regulate trade, it made no mention of the word “tariffs”.

Neil Katyal, making the case for the private businesses, said it was “implausible” that Congress “handed the president the power to overhaul the entire tariff system and the American economy in the process, allowing him to set and reset tariffs on any and every product from any and every country, at any and all times”.

He also challenged whether the issues cited by the White House, especially the trade deficit, represent the kind of emergencies the law envisioned.

Suppose America faced the threat of war from a “very powerful enemy”, Samuel Alito, another conservative justice, asked. “Could a president under this provision impose a tariff to stave off war?”

Katyal said that a president could impose an embargo or a quota, but a revenue-raising tariff was a step too far.

For Sauer, this was a false choice. Presidents, he said, have broad powers over national security and foreign policy – powers that the challengers want to infringe on.

Tariffs v taxes

A key question could be whether the court determines whether Trump’s tariffs are a tax.

Several justices pointed out that the power to tax – to raise revenue – is explicitly given to Congress in the Constitution.

Sauer’s reply was that Trump’s tariffs are a means of regulating trade and that any revenue generated is “only incidental”.

Of course, Trump himself has boasted about the billions his tariffs have generated so far and how essential this new stream of funding is to the federal government.

The justices spent very little time on questions about refunds or whether the president’s emergency declarations were warranted. Instead they spent most of their time examining the text of IEEPA and its history.

Sauer urged them to understand tariffs as a natural extension of other powers granted to the president under the law rather than a tax. “I can’t say it enough – it is a regulatory tariff, not a tax,” he said.

But that appeared to be a stumbling block for many of the justices.

“You want to say that tariffs are not taxes but that’s exactly what they are,” Justice Sotomayor said.

Many seemed persuaded by arguments from the business and states that tariffs, as a tax paid by US businesses, were fundamentally different from the other kinds of powers addressed by the law.

But not all.

Justice Kavanaugh expressed doubts on that point toward the end of the hearing, saying it didn’t seem to very “common sense” to give the president the power to block trade entirely, but not impose a 1% tariff, sugggesting it left a gap like a donut hole.

“It’s not a donut hole. It’s a different kind of pastry,” Gutman responded, drawing chuckles in the crowd.

What the court’s ruling could do

Treasury Secretary Scott Bessent, who attended the hearing, made no comment when asked by the BBC what he thought of the hearing. Secretary of Commerce Howard Lutnick, also in court, flashed a thumbs-up.

US Trade Envoy Jamieson Greer was in court, along with Minnesota Senator Amy Klobuchar, who said outside after arguments that she was “hopeful” based on the questions asked that the court would overturn the tariffs.

“I thought they were very good questions,” she said, describing tariffs as an “unconstitutional power grab” by the president.

The hearing drew a full audience, with press pushed into overflow seats behind columns.

If a majority of the Supreme Court rules in Trump’s favour, it will overturn the findings of three lower courts that already ruled against the administration.

The decision, no matter how it works out, has implications for an estimated $90bn worth of import taxes already paid – roughly half the tariff revenue the US collected this year through September, according to Wells Fargo analysts.

Trump officials have warned that sum could swell to $1tn if the court takes until June to rule.

During oral arguments, Barrett grappled with the question of reimbursing such revenue, wondering if it would be a “complete mess”.

Katyal responded by saying that small businesses might get refunds, but bigger companies would have to follow “administrative procedures”. He admitted that it was a “very complicated thing”.

In remarks on Wednesday, press secretary Karoline Leavett hinted that the administration already is looking at other ways to impose tariffs if the Supreme Court rules against them.

“The White House is always preparing for Plan B,” she said. “It would be imprudent of the president’s advisors not to prepare for such a situation.”

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