Hong Kong
CNN
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As US President Donald Trump wages a trade war across the globe, a new target has come into his line of fire: the BRICS group of emerging major economies.
Trump in recent days has threatened members of the China- and Russia-backed club with 10% tariffs on goods imported to the US – in addition to heightened tariffs already looming for some of them.
“Any country aligning themselves with the Anti-American policies of BRICS” will face those duties with “no exceptions,” Trump wrote on social media Sunday, as leaders from the group met for an annual summit in Rio de Janeiro.
Days later, he went further, suggesting he wants to break up the group. “If they’re a member of BRICS, they are going to have to pay a 10% tariff, just for that one thing – and they won’t be a member long,” Trump said during a cabinet meeting.
Trump’s focus on BRICS comes at a time when the club appears to be ascendant. Eponymous members Brazil, Russia, India, China and South Africa have since last year expanded their club to include Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates – and more countries are waiting in the wings for entry. It’s not clear if Saudi Arabia has accepted an invitation to join.
It also turns up the international spotlight on the group, which roughly serves as the Global South’s answer to the US-led Group of Seven (G7) advanced economies, but is often dismissed by experts as comprising nations too politically and ideologically disparate to be effective.
That raises the question of just what Trump is so concerned about as he eyes BRICS warily from Washington.
Does BRICS want to ‘degenerate’ the dollar?
In his railings against the group, Trump has homed in on one area he sees as a specific threat: currency.
“BRICS was set up to hurt us, BRICS was set up to degenerate our dollar and take our dollar, take it off as the standard,” Trump said during the cabinet meeting on Tuesday.
It’s not the first time he’s said something like this. In November, as president-elect, Trump threatened he would put “100% tariffs” on BRICS countries unless they committed to never create a “a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar.” He reiterated the threat against “seemingly hostile” BRICS countries earlier this year.
The lofty goal of a “BRICS currency” was suggested by Brazil’s President Luiz Inácio Lula da Silva in 2023, but the proposition, – so complex it may be practically impossible – has not been a focus of the body.
BRICS countries are, however, interested in expanding trade in their national currencies, rather than relying on the US dollar – an aim that, if successful, could reduce the dollar dependence of a significant chunk of the global economy. By some estimates, BRICS members account for more than a third of global GDP based on purchasing power parity. Currently, the size of the US economy and the stability of the dollar have made the greenback the lifeblood of global finance – and a significant factor in American global power.
In a joint declaration released during their summit Sunday, the group of BRICS leaders backed ongoing discussions of a “cross-border payments initiative” between member countries. Analysts say that such a system, if developed, could potentially become an alternative to the SWIFT inter-bank network, using BRICS countries’ currencies or their digital equivalents.
Bypassing SWIFT and a dollar-denominated trade system has obvious benefits for certain BRICS countries, such as Russia and Iran, as it could allow them to circumvent heavy Western sanctions. But other countries also see a benefit in not relying on the US dollar for trade.
China has long looked to make its renminbi an international currency and chip away at what it’s called the US’ “financial hegemony.” In comments last month at a financial forum in Shanghai, the head of China’s central bank Pan Gongsheng called for the development of a “multi-polar international monetary system” – or one in which no single currency is dominant.
But even with the will, reaching that point would be no quick transition – and there are likely many different views and competing interests within BRICS on how to get
it done, not to mention technical challenges. Brazil’s Lula on Monday alluded to that when he repeated his view that global trade needs alternatives to the US dollar, but added that this would be something that “happens gradually” and “carefully.”
Is BRICS set up to counter the US?
The economic coalition of founding members Brazil, Russia, India and China was launched in 2009 in the wake of the US financial crisis that damaged America’s financial reputation and gave new confidence to emerging markets about their place in the global economy.
The group, which invited South Africa in 2010, is even more of a geopolitical hodgepodge today than it was then, made up of authoritarian nations – both Communist Party-ruled and theological, vibrant, sprawling democracies, and others in between. It includes close partners of the US, like India and the UAE; those that consider the US an enemy, like Iran; and countries that don’t see eye to eye, like India and China. That can blunt the force of BRICS when it makes finding consensus on a range of issues challenging, observers say.
But BRICS countries are also united by a simple view: that the global balance of power skews too much toward the US and its European allies to the exclusion of emerging economies – and that the system should be reformed. To that end, the body set up its own development bank in 2015, and backs Brazil and India’s aspirations to play a greater role in the UN Security Council.
Members of the group have denied this makes BRICS “anti-Western.” But as Russia and China in the past decade have faced more friction with the West amid China’s growing assertiveness on the global stage and Russia’s invasion of Ukraine, observers say both have pushed to shape the group into a more pointed tool to counter US power.
Not everyone is on board. Indian Prime Minister Narendra Modi warned other members at a BRICS summit last year to “be careful to ensure that this organization does not acquire the image of one that is trying to replace global institutions.”
Meanwhile, this year’s gathering was missing top leaders of several countries, among them China, UAE and Egypt, suggesting the body is not at the top of their immediate agendas.
That said, Trump’s global tariff war has been a rallying point for BRICS. During their summit in Rio, the leaders released a joint declaration voicing “serious concerns” about the “rise of unilateral tariff and non-tariff measures” – an apparent jibe at the Trump administration’s trade policy.
Members have also found common ground on points counter to the US outside the realm of economics, even as they’ve voiced them carefully.
Their latest declaration referenced a 12-day conflict between Israel and member state Iran by condemning recent military strikes on Iran and expressing “serious concern” over “deliberate attacks on civilian infrastructure” and “peaceful” nuclear facilities.
It did not, however, name Israel on that point, after Israel carried out days of strikes against Iran last month. It also didn’t name the United States, which bombed three Iranian nuclear facilities as part of the same onslaught.