Brics nations pledge unity against US trade war threat

26 July 2018 - 16:41 By AFP

As Donald Trump's tariff salvos threaten global trade wars, leaders from the Brics bloc - Brazil, Russia, India, China and South Africa - are expected to band together in defence of the multilateralism the United States once championed, at a summit of major emerging nations in Johannesburg.

Five of the biggest emerging economies stood by the multilateral system on Thursday and vowed to strengthen economic cooperation in the face of US tariff threats and unilateralism.

The heads of the Brics group - Brazil, Russia, India, China and South Africa - met for an annual summit dominated by the risk of a global US-led trade war, although leaders did not publicly mention US president Donald Trump by name.

"We should stay committed to multilateralism," China's president Xi Jinping said on the second day of the Johannesburg talks. "The escalation of protectionism and unilateralism are directly affecting ... emerging markets," he said in a statement in the day's opening session.

"Closer economic cooperation for shared prosperity is the original purpose and priority of Brics," Xi added.

Russian president Vladimir Putin, who held a controversial meeting with Trump last week, echoed the calls for closer ties among Brics members and for stronger trade within the group.

"Brics has a unique place in the global economy - this is the largest market in the world, the joint GDP is 42 percent of the global GDP and it keeps growing," Putin said. "In 2017, the trade with our Brics countries has grown 30 percent, and we are aiming at further developing this kind of partnership."

Trump has said he is ready to impose tariffs on all $500-billion of Chinese imports, complaining that China's trade surplus with the US is due to unfair currency manipulation.

Trump has already slapped levies on goods from China worth tens of billions of dollars, as well as tariffs on steel and aluminium from the EU, Canada and Mexico.

US trade policy could give the Brics group renewed purpose

"We are concerned by the rise in unilateral measures that are incompatible with World Trade Organisation rules, and we are worried about the impact," South African President Cyril Ramaphosa told the summit's opening session on Wednesday.

The Brics group, comprising more than 40 percent of the global population, represents some of the biggest emerging economies, but it has struggled to find a unified voice.

Analysts say US trade policy could give the group renewed purpose.

In Washington, Trump and European Commission chief Jean-Claude Juncker announced an apparent truce in their trade war after White House talks on Wednesday.

The US and the EU will "immediately resolve" their dispute over US steel and aluminium tariffs and subsequent EU counter-measures, US Treasury secretary Steven Mnuchin confirmed Thursday.

The punishing US metals tariffs had angered Washington's major trading partners including the EU and sparked retaliation against important American exports, spooking global stock markets.

Xi arrived in South Africa after visiting Senegal and Rwanda as part of a whistlestop tour to cement relations with African allies.

Turkish president Recep Tayyip Erdogan will also attend the Brics event as the current chair of the Organisation of Islamic Cooperation (OIC) and will meet Putin on the summit's sidelines.