- The U.S. buys a lot of goods from you using U.S. dollars, leading to a large accumulation of dollars in your hands.
- However, you don’t buy equivalent goods from the U.S. For example, I import $100 worth of goods from you, but you only import $50 worth from me, leaving you with a $50 surplus annually (e.g., $50 billion).
- You use these dollars to buy cheap crude oil from Russia. Ambani refines it into petrol/diesel and sells it to Europe at a lower price than me, earning euros.
- If Europe buys from Arab countries instead of you, they must pay in U.S. dollars, as Arab countries don’t accept euros.
- By selling cheap oil and earning euros, you reduce the global use of my U.S. dollars significantly.
- You give these dollars to Russia, which uses them to buy weapons, impacting U.S. military operations.
- You buy oil cheaply from Russia but don’t pass the benefits to your people by lowering petrol/diesel prices. Instead, the massive profits go to Ambani and his ancillary companies, not the public.
- So, we’ve imposed a 50% higher tariff on Indian goods. This increases their price in the U.S., discouraging purchases and imports from India, reducing the flow of U.S. dollars to you, so you can’t send them to Russia or Europe.
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