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Tariffs

Trump's Trade War Targets BRICS: What's Behind the US President's Threats

Strategic Insights

— 2 min read

US President Donald Trump's trade war has reached new heights as he targets the BRICS group of emerging major economies with 10% tariffs on goods imported to the US. The BRICS group, formed in 2009 in the wake of the US financial crisis, consists of Brazil, Russia, India, China, and South Africa, and has since expanded to include Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates. Trump's latest move comes as the BRICS group appears to be gaining momentum, with its membership and influence growing globally. But what's behind Trump's concerns about the BRICS group, and what does the US president hope to achieve by targeting them with tariffs?

Key Takeaways:

  • Trump has threatened BRICS countries with 10% tariffs on goods imported to the US, citing concerns that the group is "set up to degenerate" the US dollar and take its place as the global standard currency.
  • The US president has repeatedly threatened to put "100% tariffs" on BRICS countries unless they commit to never creating a new currency to replace the US dollar.
  • BRICS countries have been exploring the development of a cross-border payments initiative, a potential alternative to the SWIFT inter-bank network, which would allow member countries to conduct trade without relying on the US dollar.
  • The US dollar remains the lifeblood of global finance, but BRICS members account for over a third of global GDP based on purchasing power parity.
  • The BRICS group has its own development bank, which was established in 2015, and backs Brazil and India's aspirations to play a greater role in the UN Security Council.
  • Trump's trade war has been a rallying point for BRICS, with the group releasing a joint declaration expressing "serious concerns" about the rise of unilateral tariff and non-tariff measures outside the realm of economics.
  • BRICS countries, including China, Brazil, and India, have voiced concerns about the US's "financial hegemony" and have expressed support for the development of a multi-polar international monetary system.

Statistics:

  • BRICS members account for over a third of global GDP based on purchasing power parity.
  • The US dollar remains the lifeblood of global finance, but it's not the only currency used in international trade.
  • BRICS countries have their own development bank, with Brazil and India's aspirations to play a greater role in the UN Security Council.
  • The cross-border payments initiative, which is being developed by BRICS countries, would allow member countries to conduct trade without relying on the US dollar.

Sources:

  • CNN
  • Joint Declaration released during the BRICS summit in Rio de Janeiro
  • Comments by Brazilian President Luiz Inácio Lula da Silva
  • Comments by Chinese central bank head Pan Gongsheng
  • Comments by Indian Prime Minister Narendra Modi
  • Article by US President Donald Trump on social media
  • Article by US President Donald Trump during a cabinet meeting

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