BRICS summit to take place under Trump's tariff shadow
"He ruled the playground until he was the only one left on it." That phrase is being tossed around as the Trump administration ups the ante in its trade war with Canada and continues its push to impose steep tariffs globally. It's a situation that trading partners and adversaries are watching closely and will be discussed at length during the upcoming BRICS summit this weekend. That friction is even present in the conference theme "Building for Resilience, Innovation, Cooperation and Sustainability," but expect many of the tense conversations to take place behind closed doors.
Backdrop: The BRIC inaugural summit was first held in 2009, with South Africa joining the union a year later. It has since expanded further, with more nations looking to increase their influence in the global political and economic order. There are now 11 full members of the group, including Iran, Egypt, and Indonesia, as well as a new tier of 10 partner countries like Cuba, Thailand, and Vietnam.
The White House has taken notice amid worries over power dynamics. Over the past two years, President Trump has threatened the broadening BRICS union with 100% tariffs, accusing the group of wanting to take over the dominance of the dollar. It's even more consequential, as the fast-growing bloc now represents nearly half of the world's population and a similar percentage of global GDP, and has already made some moves on reducing their dependence on the U.S. financial system. Those include efforts like settling trade in national currencies (yuan, rupees, and rubles), alternative payment systems to SWIFT (CIPS and SPFS), as well as the formulation of the BRICS New Development Bank.
What's next? It's not likely that the dollar's status as the primary world reserve currency—which grants the U.S. immense leverage and lower borrowing costs—will end anytime soon. The size and depth of U.S. markets are too deeply entrenched, while structural barriers, debt risks, and differing priorities and disputes among the BRICS nations only complicate the picture. What is more likely is that the group will gradually continue to build more financial infrastructure and institutions to reduce their exposure to American sanctions and dollar volatility.
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