[Samurai]

Originally Posted by Linuskm

Their strict regulations and unionised labor will make them hard to compete with south asian countries in manufacturing and services sectors.

We shouldn't assume trade unions are the same around the world. The trade unionism we encounter in India or USA is not the norm in Europe.

Checkout the worker representation on corporate boards of directors: https://en.wikipedia.org/wiki/Worker...s_of_directors

Sort the table by the Minimum Worker Representation column in descending order. You will find most prominent European countries (except UK) having 1/3 to 1/2 worker representation in corporate boards. So, they don't have adversarial relationship between the management and employees.

[DigitalOne]

Originally Posted by V.Narayan

EU hopefully will become more independent, more capable of defending itself and more united. The world needs a sane EU as a balancing factor and a third leg between Trump and Xi Jinping.

Originally Posted by WhyMe

Economically perhaps yes but militarily I'm not so sure, many countries (within EU or elsewhere) have shifted far right, some are in transition, some in center, some on left.

Originally Posted by Linuskm

EU without UK and weakening Germany (economically) is doomed to be a failed experiment in my opinion.

I agree with @WhyMe's and @Linuskm's opinions. EU is neither a civilizational idea, like India or China, nor a strong nationalistic union like the US. It is just an economic union or a trading block. Many countries within the EU are now turning sharply nationalistic. It is simplistic to say every EU nation's interests are aligned with Germany's (the backbone of EU). Countries will leave EU as per their own interests, just like Britain did.

Italy's PM Georgia Meloni's visit to the US yesterday and the bonhomie displayed among Trump, Meloni, and JD Vance was very telling. Meloni in her remarks, during the press conference, mentioned that they would import LNG from the US, work on Nuclear Tech with the US, and also invest billions in the US. These probably are platitudes by her to please Trump but it would have equally caused anxiety within the EU bureaucracy. It-exit next?

The Trump tariffs are going to be biggest test for EU.

Originally Posted by V.Narayan

And through this all gradually de-dollarization will take place at least in part to the deep detriment of the US.

I have asked this before . How is de-dollarization going to affect a normal, average American i.e. any American who is not interested in perpetrating American expansionism/hegemony, endless wars, or "saving democracies" elsewhere?

I understand there will be an inflation spike (worst estimates put it at a 3%), probably a short recession and job losses. On the other hand, America is surplus in Agriculture, Energy (coal and LNG) and, still reasonably strong in Manufacturing. Military and Technology is still super strong to ward off any external threats. So, what am I missing here? How does a weak dollar affect them adversely domestically?

[Samurai]

Originally Posted by DigitalOne

I have asked this before . How is de-dollarization going to affect a normal, average American i.e. any American who is not interested in perpetrating American expansionism/hegemony, endless wars, or "saving democracies" elsewhere?
.
.
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So, what am I missing here? How does a weak dollar affect them adversely domestically?

As I mentioned few pages ago, dollar is the most valuable US goods. Not only they buy it for third party transactions, but they often return it in exchange for US treasury bonds.

T-Bonds are how US government takes loans. Countries and businesses around the world buy T-Bonds because that was the most stable currency, which has steadily appreciated. USA used to ensure this through their global hegemony.

Like any loan, T-Bonds have yearly payment to the lender at the coupon rate. If USA defaults on this payment or threatens the stability of dollar, the lenders will start dumping the T-Bonds fast at lower prices in the secondary markets, which will increase the yield. Yield going up is the sure sign of a bond losing its stability and trust. It may sound counter-intuitive at first. If the yield goes to double digits, we are looking at a fire sale. That means no one will trust that bond and is unlikely buy any from the actual issuer. If the US treasury is selling a bond at $10K and the secondary market is selling at $7K, why will anyone buy it from US treasury? The coupon rate aka annual payment remains the same. That means the US treasury has to offer much higher coupon rate to sell their bonds, in order to beat the higher yielding older T-bonds in the secondary market.

Say $10K bond with coupon rate 5% is selling at secondary market at $8K. That makes yield (10K x 0.05)/8K = 6.25%. And treasury has to continue paying $500 annually to the bondholders, while being unable to sell anymore bonds. This will force the treasury to sell the new bonds at coupon rate at least 6.25% in order to beat the secondary market. Also means they have to pay $625 annually to these new bondholders, to match the yield.

If borrowing becomes expensive, US will have lot less money for fiscal spending, that affect spending on roads, military, dams, etc. They will lack funds even to maintain existing infra.

They will also have to increase the repo rates, which will makes borrowing expensive of every citizen, for buying cars, homes, education, etc.

[DigitalOne]

Originally Posted by Samurai

As I mentioned few pages ago, dollar is the most valuable US goods.....
T-Bonds are how US government takes loans. Countries and businesses around the world buy T-Bonds because that was the most stable currency, which has steadily appreciated. USA used to ensure this through their global hegemony.

I get that but a gradual weakening of the dollar makes US exports competitive and brings down their trade-deficits with countries. It will make paying off existing loans easier.

I do get that getting new loans becomes more expensive and that will force them to spend less, i.e. keep their fiscal deficit down. Their fiscal deficit now is around 6.5%, whereas India's is at 4.8% and targeted to come down to 4.4%). If Indians can do with 4.4% deficit, so can the US citizens.

Keep spending within means (i.e. deficits down), don't make excessive borrowings, make exports competitive are all bedrock of conservative economics. If it is good for other countries, should be good for the US also. There will be short pain in the form of inflation and rise in interest rates, but as long as it doesn't threaten their fundamentals, it should be fine.

[Jeroen]

Originally Posted by DigitalOne

I It is just an economic union or a trading block. Many countries within the EU are now turning sharply nationalistic. It is simplistic to say every EU nation's interests are aligned with Germany's (the backbone of EU). Countries will leave EU as per their own interests, just like Britain did.

You might want to brush up on your understanding of the EU. Although it started as an economic alliance it is way more these day. Its is also a political and legislative body.

Most laws in EU countries origin from EU legislation these days.

After the Brexit disaster there is virtually no appetite within the EU for leaving. If anything the recent global events and in particular the idiot Trump has strengthened the EU countries in sticking together on just about all topics under the sun. Politically, economically, financially, defence, science and so on.

Of course you can always find the extreme right wing nut case politician who believes otherwise, but those are the exceptions

Jeroen

[V.Narayan]

US Vice President JD Vance is scheduled to arrive in New Delhi today with his family on a business cum tourist visit. Accompanying him will be senior U.S. officials from the trade and the security side of matters. India is clocking healthy progress in its bilateral trade agreement with USA with Terms of Reference already drawn up and the first part to be closed by September with a smaller portion to be signed up within the 90-day period the Trump administration has provided. In my opinion, and others may differ, for us this is the sensible path to follow.

Vance's visit and subsequent meetings with trade officials of USA will focus on the all important H1b visa, IT exports, dairy & farm imports and opening up the Indian market to import of US retail goods. Unlike China and the EU we are a minnow compared to the US and we need their export markets more than the other way around. So it makes sense to be humble, be welcoming, be flexible, give a little and protect what we have, and get a little. Vance, I'm sure, will welcome a visit where he is feted after his recent trips to Greenland and Europe. With our trade imbalance with China, with China's dumping into India and with the fact we cannot trust China but must maintain decent relations with them it is in our interests to be a soft friend, not a military ally but a soft friend of the US.

From The Guardian a slightly slanted article, not surprisingly

https://www.theguardian.com/world/20...ing-trade-pact

https://www.indiatoday.in/india/stor...929-2025-04-21

UK India close to wrapping up the FTA
https://www.theguardian.com/politics...rade-agreement

Meanwhile UK & India are almost there with finalizing their mutual Free Trade Agreement. Good for both nations. Both need fresh trading partners to boost their economies. The UK separated somewhat from Europe and facing tariffs albeit a mild 10% from USA could see India as a useful trading partner. Similarly for us.

Onwards and upwards.

[DigitalOne]

Originally Posted by V.Narayan

Vance's visit and subsequent meetings with trade officials of USA will focus on the all important H1b visa, IT exports, dairy & farm imports and opening up the Indian market to import of US retail goods.

Couple of things apart from the things you mentioned.

1. Crude oil and LNG imports from the US: I am sure there will be pressure from the US side to buy more crude oil and LNG from the US (than say Qatar or Saudi).

2. In a recent breakthrough, US Department of Energy had approved US company Holtec to build nuclear reactors in India with three approved partners (L&T, Tata Consulting Engineers, and Holtec India). This has been hailed as a resurrection of the stalled India-US nuclear ties. I am definitely expecting a more visible, public announcement of this.

Both are win-win for India and US.

[whitewing]

Originally Posted by DigitalOne

..
1. Crude oil and LNG imports from the US: I am sure there will be pressure from the US side to buy more crude oil and LNG from the US (than say Qatar or Saudi). ...
Both are win-win for India and US.

This would mean the shipping distance and time goes up say 8-10 time more?? and we'd have to pick the tab for the additional transportation costs. Also in that event I wonder what happens to the RIL deal with the Russians for long term purchase of crude.

The developments on the nuclear energy front though is a win-win for both.

[DigitalOne]

Originally Posted by whitewing

This would mean the shipping distance and time goes up say 8-10 time more?? and we'd have to pick the tab for the additional transportation costs. Also in that event I wonder what happens to the RIL deal with the Russians for long term purchase of crude.

India has been importing crude oil from the US for 5-6 years now. For example, see this news from 2019.

India's energy trade with the US is expected rise by more than 42% to $10 billion in the current financial year as the ..

“In 2018-19, (India’s) total import of crude oil, LNG and coking coal stood at $7.2 billion."

RIL deal with the Russians will continue. It may also increase if Russia and Ukraine get into a peace agreement, and sanctions on Russia are removed.

If an US-Iran nuclear deal is successful, Iran may also go off sanctions thus bringing more supply.

I am fairly optimistic that the world is going to see an oil glut in the near future.

[PreludeSH]

Originally Posted by DigitalOne

India has been importing crude oil from the US for 5-6 years now. For example, see this news from 2019.



RIL deal with the Russians will continue. It may also increase if Russia and Ukraine get into a peace agreement, and sanctions on Russia are removed.

If an US-Iran nuclear deal is successful, Iran may also go off sanctions thus bringing more supply.

I am fairly optimistic that the world is going to see a glut of oil in the near future.

If Russia and Ukraine attain peace and US-Iran reach a nuclear deal, US defense industry will suffer losses

But hope it happens for World's sake. That leaves only one other major issue in middle east.

TSMC is suffering losses in its Arizona unit. It was already known that the chips will be 50% costly compared to Asian manufactured ones. But its coming to be close to double the cost.

[twincharger_gt]

Originally Posted by DigitalOne

I have asked this before . How is de-dollarization going to affect a normal, average American i.e. any American who is not interested in perpetrating American expansionism/hegemony, endless wars, or "saving democracies" elsewhere?

Any attempt to de-dollarize in medium to short term would cause havoc in global financial markets and more so for the average American household. The reason of dollar being the reserve currency means that it is always worlds in demand currency.
Today out of the total US debt in Treasury Bonds one-thirds remains foreign owned while two thirds is domestically owned. So in very simplistic terms one third value of dollar is because of its demand in Foreign shores most of which is because of the reserve currency status.
If one fine day that demand cools off you could find dollar depreciating against other major currencies very rapidly that would mean runaway inflation. Like @Samurai mentions technically any loss of demand of US treasury bonds would mean that the prices decrease thereby automatically increasing yields. That means to any further debt needs those same or better yields thereby increasing the borrowing cost for govt. and thus for all U.S citizens.

[volkman10]

India's proposed digital competition law likely to be put on the back burner, considering strong concerns from US government and industry.

[dragracer567]

Latest numbers from the IMF's World Economic Outlook, April 2025 is out and they are interesting:

1) The US is still outgrowing almost all other developed economies, though still a drop from the Biden-era. Spain seems to be the new star among developed economies though I'm not sure if past experience should temper expectations.

2) China is growing at a solid 4% for 2025 which is still quite formidable for a $20 trillion economy, especially one facing a demographic crisis and what is expected to a brutal trade war with its largest trading partner. India meanwhile is expected to grow at 6.2%, which is low despite being the highest in this list, keeping in mind our aspirations - the 8 to 9% growth might be a fantasy at this point but I believe 7-7.5% is necessary to ride the demographic dividend wave. Both are still much better than any other major economy of the Global South (i.e excluding minor ones like Guyana & Senegal), many of whom are struggling to keep up with developed economies.

3) While there is a general slowdown, the global economy isn't getting devastated due to the recent headwinds generated by the current US administration. Fingers crossed on that one.

[GTO]

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