Monday, August 4, 2025

The World Minus One – Why the World Needs a Global Goods Clearing House

Singapore’s former Prime Minister and current senior minister Lee Hsien Loong recently warned that the world may be heading toward a “World-Minus-One” scenario in trade—a global system operating largely without the United States as a constructive participant.


The United States remains the world’s largest single-country importer, taking in about 13.2% of global goods imports—USD 3.3 trillion in 2024—and exporting 8.3% of goods, or USD 2.1 trillion. In total, it accounts for roughly 21.5% of world trade. China, by comparison, accounts for around 12.5–13%.

But Washington’s increasingly unilateral trade policies—tariffs, sanctions, and the weaponization of its market power—risk undermining this role. Trump’s renewed tariffs are likely to shrink America’s trade footprint and force countries to search for alternative markets. For many exporters, the U.S. market is still critical, but overreliance on it has become a strategic vulnerability.

This reality opens the door to a new idea: the creation of a Global Goods Clearing House, a first step toward operationalizing the “World-Minus-One” trade concept.

A Blueprint for a New Trade Mechanism

This clearing house could begin with China and a coalition of willing partners: ASEAN members, Brazil, South Africa, Russia, a Central Asian economy, and a key Middle Eastern country. Its purpose would be straightforward: match imports and exports among participants to reduce friction, diversify market access, and shield members from politically motivated trade disruptions.

To limit dependence on any single currency, settlements could be conducted in a multi-currency basket:

  • USD: 25%

  • RMB: 25%

  • SGD: 15%

  • JPY: 20%

  • EUR: 15%

Interestingly, U.S. exporters and importers could still join on neutral terms, ensuring that trade flows remain open. Bilateral trade with the U.S. would continue under existing protocols, but members would gain a collective safety net for the growing share of commerce outside America’s influence.

Why the World May Need It

A global clearing house would serve three critical purposes.

First, it would reduce the world’s vulnerability to trade shocks originating from Washington. Tariffs, sanctions, and supply chain restrictions increasingly reverberate across the globe. A mechanism to reroute and settle trade outside U.S.-centric channels could dampen the impact.

Second, it would encourage gradual de-dollarization without abrupt disruption. By allowing a multi-currency settlement system, the clearing house would offer businesses an alternative path while maintaining some use of the USD for stability.

Third, it could accelerate the shift toward a multipolar trading order. In a “World-Minus-One” reality, countries would rely more on each other, spurring new trade corridors and partnerships rather than waiting for the U.S. market to remain open.

Can a “World-Minus-One” System Work?

Skeptics point to formidable obstacles. The U.S. dollar still dominates over 80% of international settlements. Many potential partners—especially in Southeast Asia—remain security allies of the U.S., which makes open participation politically sensitive. Building a credible clearing house would require strong governance, transparency, and risk management to win trust in global markets.

Yet history suggests that alternatives emerge when the dominant player overplays its hand. The Belt and Road Initiative, the BRICS New Development Bank, and mega-regional trade agreements like RCEP all reflect a gradual shift toward trade diversification and strategic hedging.

If Washington continues to weaponize its market power, the incentive for a World-Minus-One clearing system will only grow. The world cannot replace the U.S. overnight, but it can prepare a safety net for the day when global trade needs to function without its traditional anchor.

In the end, the question is no longer whether the world can imagine such a system—it is whether its major economies have the political courage and economic vision to make it real.

End

6 comments:

  1. A Global trading house is interesting. The details.. who leads who owns, the mechanisms , how much money it needs for trust, start with commodities

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  2. 1/n:

    It's a ponderable proposal but again there are downsides:

    1. how different would such a clearing house be from banks currently engaged as intermediaries in cross-border trade transactions?

    2. how likely would governments assume the risk of margin calls when there is likelihood of default by either buyer or seller, both of whom in the private sector?

    3. if there is default by underperformance, scam or force majeure, who pays for the demurrage and legal charges when goods are held at port by shipper beyond contracted periods?

    4. it is understandable all will want to avoid fractious relations with the US or any other country in trade relations but won't inviting the US to participate embolden it to demand equity in the House beyond what the other members can agree and to the extent of casting a spoil vote in the event of major decisions?

    5. won't pre-assigning percentage limits of currencies to be used regardless of the value of each or multiple transactions or period of coverage complicate matters and become self-defeating should a trade goes above the percentage for the currency when the alternative of currency swaps can be topped up in the same case?

    6. will the members agree to use the China-initiated New Development Bank as vehicle for the house which is currently being used for BRIC projects in which case use China's mbridge in lieu of the US' SWIFT as both bank and system are already operational, furthermore cheaper and faster?

    7. will the proposal rekindle the CPTPP which the US had rebuffed in which case how will its signatories respond if China expands her free-trade RCEP?

    8. should there be a dispute between the US and any House member, how will the MPIAAA arbitrate since the US has blocked the WTO arbitration panel and in such a way as not to cause the US to exercise its same blocking votes in the House?

    9. Given the US' present propensity to punish without principles, the House's KPI must be to achieve amongst its members a gross trade value exceeding their total with the US but how are the members which have signed deals with the US to afford the other aspect of each deal - to buy American products and outflow to the US funds from their treasuries in the billions of US dollars?

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  3. 2/n:

    Pick a country. Any. Malaysia? for a now 19% tariff by the US on goods from that country, it has to buy from and invest in the US over the next five years the ginormous sum of USD240 Billion which is ten times the US' deficit with it; for scale, that country's allocation for its own domestic investments is a paltry USD5.7 Billion over the period and for US investments, USD400 million last year.

    Moreover much of its surplus with the US is from US companies shored in the country making things for US consumers. To add salt to wound, its airline has to acquire 60 Boeing jets at USD19 Billion and its O&G-producing company has to buy USD3.4 Billion per year of US LNG.

    These will wipe out their respective bottomlines. It's a deal where the buyer has to take the sales without cost-benefit justification and then start cooking up economic reasons for the purchase.

    To top it, that country which aspires to be an AI center will now have to face the specter the US may bar its imports of critical AI chips and tools. But the demand to buy US goods and investments will still stand.

    Since there is now talk the money to do so will have to be by emptying the country's provident funds which are retirement monies, their clueless citizens may rile enough to destabilize the government. At the least, its financial sector will be aghast.

    Maybe that's why Japan has slyly said Trump misinterpreted his win of USD550 Billion japanese investment into the US when Tokyo intends it as mostly commercial loans only.

    As for Europe, how are its member countries to agree when investments will have to come out of the pockets of their private sector over which Brussels has no control? Von der Leyen to contribute her Pfizer fee?

    10. There is also a geopolitical reason. All these years the US has flexed its consumer, capital and military muscles. If it sees BRICs as a threat, so too the House and if it participates in the House, expect it wants control or dissolution. If it withdraws from the world's stage when the curtain draws to G-zero, the others will have to realign their security needs perhaps by forming a G-minus-one military alliance beyond the remits of the UN peacekeeping movement.

    How likely will it be that any member won't be a US-trojan horse to narcotize the alliance's response and initiative to a conflict so that the US' military-industrial complex will continue to step in after its CIA has subverted or even caused the conflict?

    That all said, the proposal for a Global Goods Clearing House in a G-minus-one world deserves serious and timely consideration if only to bring the US back to its senses that its republican praetorian guards have been goaring others once too many times. Like the Roman soldier spearing Archimedes before he could complete his Liber Assumptorum.

    If of any value, the following canopies the context of this comment.

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  4. 3/n:

    That the need for G minus one is now presented must be ascribed to Trump's knee-jerked thinking on thr world stage - incoherent, inchoate, petty and extortionate

    He weaponized the US as the world's sybaritic consumer by dangling tariffs as a portcullis on three excuses - one, that doing so will reshore manufacturing back to America except the need for goods is now and the ecosystem for manufacturing was yesterday; two, that doing so will reduce the US trade deficits except they are caused by credit-fueled consumer demand exceeding realworld production investment, and three, that doing so will provide the funds needed to cover his Big Beautiful Bill exposures except these will only be tax cuts for the rich and higher costs for the price-pummelled poor.

    In all so doing, he has aggravated trading and geopolitical relations with the world, increased costs and thus prices, and reduced the competitiveness of American enterprises.

    With less recycling back of the US dollar from reduced inbound trade, it thus loses its value but without making American goods and services more attractive overseas for the disgruntlement overseas buyers now have to boycott them; moreover tariffed countries will mount their retaliatory measures against his US.

    Which is why together with his tariffs, he has imperiously demanded: one, that any country which retaliates and/or transships to try and benefit from differential tariff rates will face more tariffs; two, any country which fails to strike a deal with his US will be at the mercy of his raised tariffs; three, any country which doesn't open its institutions and doors wide open and restructure its inbound rules for American exports will be escalatorily punished; four, any country which legally insults him and his cause and punishes his friends will face his vindictive wrath and; five, the bigger sellers must also invest in his US.

    The first four are just knuckle-duster and vindictive bullying, and the fifth is oxymoronic; after all, if they be made poorer, how can theyover their own invest in his US, the source of their trouble?

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  5. 4/n:

    There is a sixth; predisposed to his oil riggers, they must buy American fuel even if price and logistics wise, it does not make any business sense. Moreover, even if they have existing contracts, they must not buy Russian fuel that will indirect shore its war economy in the Ukraine which crisis he had earlier bragged he was going to stop 1/365 even if others have already concluded Zelenskyy will lose the war and letting it protract will only end up with more casualties that he appears to constantly lament. There is also a seventh....

    If one argues that Trump is really not being just transactional, what be the US' underlying strategy in the republicans' race to upend the world economies? Could it be the need to maintain the supremacy of the US dollar which has affected the sovereign liquidity of every country that has been made to adopt it?

    So, seventh, Trump's threat against the BRICs that no nation shall challenge the US dollar as reserve currency and default trade convertible instrument.

    Yet the US has raised its interest rate to vacuum back the dollar from other countries thereby weakening their domestic loan systems and causing their enterprises to fall into debt in which case the US can cherrypick and harvest their distressed assets by leveraging its IMF and WB to foist weakness-inducing sovereign restructuring and loosen their resistance against US interests.

    Such as happened in the 1980s with the Mercosur countries, and the 1997 Asian crisis not to forget the US 2008 subprime mortgage crisis which sundered many countries within its orbit. Which is also why many did not sanction Russia in the 2022 Ukraine crisis, seeing how if they do so, they would have lost a source of food, fuel and fertilizer, thereby weakening their economies.

    Could the US strategy be also to contain and kneecap China? The alarmist tendency of the US towards China's rise despite Starr's research that the US holds first pole through its TNCs in many global industries? (https://tinyurl.com/3nxup3my).

    The alarmism started with Andrew Marshall who funded Michael Pillsbury's The Hundred-Year Marathon which Trump said he had read.

    There were many anti-China hawks after who jumped onto the red scare bandwagon,, notable were those with military insignias. Such as HR McMaster and David R. Stilwell who boasted he started the contain-China campaign which at present is helmed by Colby in the wake of Pompeo, Doshi, Pottinger, Sullivan, Krishnamoorthi, Cruz, Cotton and Schumer. Active still are the academics Brands and Beckley, and the ex-FBI directors Wray and O'Brien. Not to miss out Bannon who was introduced to Trump by Mercer, Simon's computer sidekick in Renaissance Technologies.

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  6. 5/5

    A smattering of others may be added to the 'anti-China exclusion list'. Ex-Google chief Eric Schmidt. One north texan engineer who wrote a US policy-influencing piece on semiconductors. Journalists like Denny Roy, Richard Heydarian, Howard French and Dan Wang formerly of Gavekal for his piece in Foreign Affairs. And until lately, David Goldman of Asiatimes who spooked with his book on how China was going to 'sino-form' the world. And not to forget, New Delhi's Brahim Chellaney who now has the dilemma how to write next about China given how the US has snubbed his India. Will the tide of history leave all of them as footnotes with Gordon Chang?

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