Summary
China, Japan, and South Korea held their first trade talks in 5 years in Seoul, agreeing to deepen cooperation amid looming U.S. tariffs announced by Donald Trump.
With a 25% tariff on car imports threatening their export-heavy economies, the three nations pledged to advance negotiations on a trilateral free trade agreement and strengthen the RCEP.
South Korea’s trade minister emphasized joint action against global economic fragmentation.
The meeting marks a renewed push for regional trade unity as tensions with the U.S. grow. The next meeting will be held in Japan.
Because what you are saying ignores everything BRICS is doing. All BRICS nations are copying China’s currency swaps. None of them are using the RMB as a reserve currency, except for Russia. If 120 nations can do it in unison, why can’t Europe fall in line as well?
I understand what you’re saying, but I have read from countless economists that the ease of a reserve currency far outweighs the equality of currency swapping. I can provide many sources if you’d like to read them, but as you said, they’re all westerners.
And there you see what I’m saying. Let’s ask this a different way, are any of those analysts living in a nation where currency swaps are common? It’s like people with horse drawn carriages saying cars will never take off because the roads are made for horses. That happened, it seems insane now but many people at the time believed horses would be forever.
*Edit. This is also how the Russian economy didn’t collapse and we couldn’t understand why. We just kept putting more sanctions on to increasing uselessness.
At the end of the day, it costs more from an accounting standpoint to constantly swap currencies. It’s easier and more cost effective to buy when the most widely used currency is more in your favor and use that to trade with allies. China doesn’t really have as much of a say in how others conduct trade in BRICS. They would need to add a clause abolishing the use of their currency for trades that do not include China.
You are right in a sense. For example, Russia literally forced that situation. However, there simply isn’t enough RMB globally for it to work. China would have to take on a lot more debt for that amount to be possible. China can choose not to as they’ve consistently shown. However, if globally the world decides in unison to ignore this, they’ll deflate the Chinese yuan considerably forcing China to take on the debt. In many ways that’s already happening to China’s chagrin. However, I believe since China really doesn’t want this they’ll figure out a way to enforce currency swaps. I could be wrong obviously, but that’s clearly the direction China wants to go.