 Salaam from the People's Dispatch studios here in New Delhi. I'm Siddharth Ani and you're watching The Daily Debrief. We have a lot to get through on the show today. We're keeping the intros to the absolute minimum. In our first story, China and Brazil have reached an important deal to move towards bilateral trade in their own currencies, ditching the US dollar as an intermediary. The deal enables the largest economy in Latin America and the second largest economy in the world to conduct their massive volumes of bilateral trade, which topped the record 150 billion US dollars last year, exchanging yuan for reish directly, ditching of course the intermediary US currency. The Brazilian Trade and Investment Promotion Agency released a statement saying the move is expected to reduce costs, promote even greater bilateral trade and facilitate investment as well. A preliminary agreement was reached back in January this year, which allowed the announcement to be made at the high-level China-Brasil Business Forum in Beijing, despite the Brazilian President Luiz Inácio Lula da Silva being unable to attend after contracting pneumonia. Praveer Prukayasar, Editor-in-Chief of NewsClick, is with us in studio to discuss the implications of this historic deal. Praveer, good to have you with us in studio. Another major announcement on the trade front from a sort of internationalist perspective, Brazil and China coming to an agreement to use the yuan by passing the US dollar as the currency for their trade. China is Brazil's, as we were mentioning, biggest trading partner and the two countries doing close to $150 billion worth of trade annually. So a major development. Yes, and I think also it shows a trend that if your major partner in trade is China, both in terms of exporting to Brazil, exporting to China and Brazil importing from China, then obviously why should the currency be dollar and not yuan and not, for instance, the Brazilian currency? So what is the role of reserve currency in this case? Because ultimately what you're really negotiating is the difference of import versus exports. Otherwise, the rest of it is really balancing the books, so to say. And I think this brings us to the question, what is the role of reserve currency? And unfortunately for the United States, it became the reserve currency because in post the Bretton Woods Agreement, US dollar was pegged to gold and it was really gold standard by the dollar which was then the world's global standard. And once in 1971, it goes off the gold standard, the US goes off the gold standard. Dollar has become the reserve currency without being pegged to anything except to itself. So therefore what happens is this works as long as it is the shall we say the largest economic heavyweight in the world. Now increasingly when it comes to trade and it's external account that is important when you talk about reserve currency, the external account is still 1990, US was the biggest trade partner of about 80% of the countries in the world. Today 80% of the country is only what 1990, I think up to 2000. Only about 20 to 30 years down the line, China today is the biggest trade partner of 80% of the countries in the world. Therefore the role of the reserve currency vis-a-vis China trade is obviously weakened at a time when China itself is going off the dollar. And of course it still is the biggest holder of dollar reserves in the world but slowly reducing the dollar reserves it holds. Now that is linked to the Russia, Ukraine, NATO war that is going on. We have termed it as Russia versus NATO war which is being fought in Ukraine. So I'll come to that little later but the larger current is that the biggest trade partner for most countries in the world today is China not the United States. Therefore the Yuan playing a bigger role in as the currency for trade and still not the reserve currency is emerging. Now this does not mean that the reserve currency for the world will still not be the dollar. It will still continue to be the dollar at least for the foreseeable future because there are a lot of other consequences if Yuan wants to become the reserve currency of the world which I don't think China is willing to do at the moment. So that's a longer conversation again we won't get into. But having your trade fixed in not the dollar is a consequence really of the Ukraine war in which the European Union led by the United States under United States leadership decided to sanction Russia. They called it sanctions from hell and it will ruble, it will become rubble. Rubble has actually strengthened. It has also meant that a large number of transactions in the world remember the swift system was under US control. Large number of transactions have gone off the swift system because they can't trade with Russia using the swift system. So all of this meant that the role of dollar has reduced in the world and I think this is really a sign of that. We'll also have seen Saudi Arabia, other countries wanting to trade with China in Yuan. We have seen India trading with China with Russia but in dirhams. So you could see multiple currencies being used in the trade. So this sign of yes the dollar weakening as a reserve currency but it still remains as the preeminent currency and let's not forget that. So we should not underestimate the United States and the dollar nor overestimate. I think both things have to be taken together. With that sort of financial or at least currency sort of scenario, from a sort of geopolitical perspective, does all of this indicate a shift, not maybe towards multi sort of polarity but regional agreements and regional understandings becoming the way in which countries kind of negotiate, not just trade but also the movement of other things, people etc. Well this is of course inter-regional because Brazil is in Latin America and if you see trade between China and Latin America, most countries in Latin America have trade, the largest trade partner is China, which is really again a shift for the last 20-30 years. So this is really inter-regional but you're right, regional forces are coming up and they think that if they have to trade among themselves, why should they go via the dollar? Again, that brings us to the question, what is a reserve currency for the world? And if that role brings within the threat of sanctions and therefore should they therefore designate their trade in dollars or not? Dollar designation has the consequence, this is what the United States claims, that if any trade takes place in dollar, that means at the end of it the Federal Reserve is involved and therefore it's a transaction under U.S. law. So the issue is not dollar alone, that's why I'm saying it's not simply the question of reserve currency, it's a question that therefore any trade, any agreement signed in dollars brings it under U.S. law and therefore at any point of time U.S. can say you violated my law in this particular way and therefore you can now be held liable and I can penalty on you. So also designating contracts in dollars therefore brings with it a risk. This happened for the French Czech Alstom group which was penalized, its senior official was jail and so on and ultimately Alstom was forced to sell its boiler division to an American company, combustion engineering, the boiler company over there. So these are the consequences of having your agreement signed in dollars. So I think countries are aware of this kind of risks and therefore slowly designating trade agreements between themselves in a currency which is not the dollar, which is not transacted through Swift. So out of U.S. monitoring as well as out of U.S. control. So these are the things why it is happening at the moment and as I said if your main trading partner is not the United States then of course it becomes much easier and therefore you will also see the increasing reliance on currencies other than the dollar from both the oil countries as well as countries like India for example or countries like Turkey who write therefore like for instance a certain number of agreements to be out of U.S. per view. In the case of India obviously Russia, oil as well as military arms etc. which are all essentially being transacted in either third currencies or each other's currencies. I think this is an obvious issue for most of the world. Given the kind of sanctions is free that the U.S. has gone I think there is something like 6,000 to 8,000 sanctions. No, no I may be completely underestimated. Maybe it's much larger but you can check the figure out. It's a very large number of sanctions they've imposed on and we have a map that in news click we show which shows that how many countries they have sanctioned, the U.S. has sanctioned and therefore it's not surprising that countries are then not now to designate their agreements or trade agreements in dollars. Thanks very much Pabir and as we spoke earlier we'll have you back on the show tomorrow so looking forward to that as well. Next up in another first, former U.S. President and frontrunner for the Republican Party's nomination for the 2024 U.S. presidential elections Donald Trump will be the first former president to face criminal charges after the sealed indictment was issued in relation to an investigation over payments made to porn star Stormy Daniels as hush money. On Tuesday next week Trump might face the prospect of being processed before being taken into custody and appearing before a Manhattan court. This is of course like we were saying a historic first in the United States and a development that could have a significant impact on an already divided nation. Anish covers the region for People's Dispatch and joins us now via video conference. Anish, just before we started recording you were sharing your more candid observations on this indictment. We won't get too much more into it but as a reporter who's been covering the story and looking at the various sort of issues that have come about both during Trump's regime and after of course January 6 being the foremost among them what was your initial and immediate sort of reaction response to seeing the indictment? And what exactly is this unprecedented criminal indictment actually? What does it mean? Yeah so there are multiple things to look at in this thing. First of all we do not exactly know what will be the specific charges that Trump will be indicted on because what we know so far is that he had given what the media calls hush money to a former adult entertainment star and this was done right before his election and during his election campaign so that she doesn't divulge more information about whatever their relationship they had a decade ago. So this comes under several laws of corporate fraud probably or maybe like campaign fraud at best. So in many of these like even if it's charged for any of these charges or under any of these legal stipulations it is not going to be as grave in the sense that it may not attract a jail sentence even if he gets convicted. But more importantly it is how the prosecution takes this case forward that is going to be more interesting. We need to wait and see what the specific charges are and that will be once he surrenders and gets ready for the indictment and that will mean that he will get arrested and be taken into custody. And that means that he may not be able to campaign currently or maybe take up like an early campaign for the next year's election. Whatever said and done of the three sort of cases that are going on against him this is probably in terms of gravity of the crime the least of you know the least in its you know the graveness of the sentencing orange you know the kind of charges that are there. The second question that obviously comes is whether or not he will be able to run for president. The thing with the United States system is that it does not have any kind of provision that disqualifies anybody even if they get criminally indicted. There is the only form of disqualification that the US electoral system allows for somebody from running from president is if they get convicted for insurrection or rebellion against the state and that's a very specific thing that was created right up to the American Civil War to keep all the you know the Confederate soldiers and fighters and commanders from running for the highest office. So nothing has changed since then and what we have right now is that even if you know Trump gets convicted and that is a big if in itself even if he gets convicted he can still continue to run for president he can even win the election and serve as president unless he goes to jail. So even there the legal you know loopholes that we're looking at we're not very clear what would happen if he were to be imprisoned during his presidency but that's a different question altogether. All right Anish we are running a little bit sort of behind time on the show today so we'll jump straight into the next story which is of course also eventually concerning the United States but principally Maying Zhu is the first now Taiwanese or the highest ranking Taiwanese official president or former to visit mainland China since 1949. What are the sort of what is the background of this visit and what are we hearing from it as well. Yet it's quite significant considering the direction that Taiwan has taken under the presidency of Tsai Ing-wen in the past several years now and the fact that Hukumintang former president Hukumintang leader somebody who is still widely respected in Taiwan has taken this step to actually not only visit China but to meet the Taiwan Affairs Council there and also to you know keep himself open for further meetings with higher officials which may not happen considering the political sensitivity behind that on both sides of the streets. But nevertheless the fact that he made a statement that he's open to any kind of meetings very clearly indicating that he is open to even visit President Xi Jinping shows that there is a great deal of work happening on at least on the side of not just Hukumintang but also a certain section within Taiwan who does not want to continue tensions with China. We have already seen with size so-called transit through New York on her way to Guatemala. There is a Guatemala in Belize there was a protest that happened in Taipei led by workers movement and progressive smaller groups but nevertheless significant social movements in Taiwan and the fact that they took out this protest you know called out size administration for you know provoking and stoking tensions and provocations and also for betraying what quote unquote betraying the country. So because obviously we have seen so far even though she has not made any statements by herself the Xi administration and the DPP at large heard the ruling party have always taken a sort of very soft position towards separatist movements within Taiwan that have called for and so-called independent Taiwan separate from the very identity of China even though it is very closely tied to China's history and politics. And this is something that is continuing under her administration and that is something that the KMT is strongly opposed to and obviously a big section of the Taiwanese society is also opposed to even though you have a very vocal pro independence or pro separatist group within the country. So in that sense this is a domestic political story that has quite significant you know global or geopolitical ramifications as well. So just very finely and as quickly as you possibly can give us a sense of how you know the various other parties at play particularly the US what role they are playing in the entire situation. The US has definitely taken you know taken to a point where it will play for a place for all of these provocations against China and we've seen the manner in which they have been tight-lipped about whether or not the House Speaker will be meeting with Tsai Ing-wen on her way back to Taiwan through Los Angeles and that only shows how they're just trying to push the boundaries of provocations to the point where it does not actually become a conflict but nevertheless that is what the US has done. But as we have spoken about this before this is also as you pointed out a reflection of domestic politics and a change also happening on the ground. Recently local elections were swept by the opposition led by the Kuomintang and they are obviously this is the second such visit from one of their leaders. So they are definitely pushing not only for a national campaign to come back to power by next year but also to create a discourse that does not play into sort of US-led provocations against China. Alright interesting sort of set of difference there and hopefully like what is developing into a major flashpoint through this electoral sort of process can come to some kind of resolution alright. Thanks very much Anish for all the updates today and for your time and with that we also will bring to a close this episode of The Daily Debrief. As always thank you very much for watching you can head to our website peoplesdispatch.org for details on all of these stories and the other work we do. I will be back for our last episode of the week tomorrow same time same place until then goodbye.