Tariff Tug-of-War – In the high-stakes arena of global trade, tariffs are more than just economic tools, they’re geopolitical chess moves. When U.S. President Donald Trump launched his aggressive tariff strategy, the goal was clear: protect American industries, punish trade partners deemed unfair, and reassert U.S. dominance in a shifting global economy. But like any gambit, it carried risks. And one of the most consequential may be the unintended strengthening of the BRICS alliance, a bloc of emerging economies now poised to challenge Western hegemony more directly than ever before.
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The BRICS Bloc: From Loose Alliance to Strategic Counterweight
BRICS – originally composed of Brazil, Russia, India, China, and South Africa, was conceived as a coalition of fast-growing economies with shared interests in reforming global governance. Over time, it has evolved into a platform for economic cooperation, financial innovation, and geopolitical coordination. With recent expansions including Iran, Egypt, UAE, Ethiopia, and Indonesia, BRICS is no longer just a symbol of emerging markets, it’s becoming a serious contender in shaping a multipolar world.
Trump’s tariffs, particularly those targeting China and other BRICS nations, have inadvertently accelerated this transformation. By weaponizing trade, the U.S. pushed these countries to seek alternatives, not just in commerce, but in currency, infrastructure, and diplomacy.
How Tariffs Backfired: Catalyzing BRICS Unity
1. Trade Diversification and Intra-BRICS Commerce
One of the most immediate effects of Trump’s tariffs was the disruption of traditional supply chains. China, for instance, faced steep tariffs on electronics, steel, and other goods. In response, it ramped up trade with fellow BRICS members, importing more soybeans from Brazil, investing in infrastructure in South Africa, and deepening tech partnerships with India.
India, too, began exploring alternatives to U.S. imports, while Brazil saw an opportunity to fill the agricultural void left by reduced U.S.- China trade. These shifts weren’t just reactive, they laid the groundwork for a more resilient, interdependent BRICS trade ecosystem.
2. De-dollarization and Financial Innovation
Trump’s tariffs coincided with broader U.S. efforts to sanction adversaries and weaponize the dollar. This alarmed many BRICS nations, who began accelerating efforts to reduce reliance on the greenback.
- China expanded the use of the yuan in international trade, especially in energy deals.
- Russia promoted the ruble and developed its own payment systems like MIR.
- India pushed its Unified Payments Interface (UPI) globally, even integrating it with partners like Singapore and UAE.
The New Development Bank (NDB), BRICS’ answer to the IMF and World Bank, began issuing loans in local currencies and funding infrastructure projects that bypass Western financial institutions. These moves signal a clear intent: build a parallel financial architecture immune to U.S. pressure.
3. Geopolitical Coordination and Strategic Expansion
Tariffs didn’t just push BRICS nations closer economically, they fostered a sense of shared grievance and strategic alignment. Leaders like Brazil’s Lula da Silva and India’s Narendra Modi began calling for a more balanced global order, one not dictated by Washington or Brussels.
The expansion of BRICS to include countries from Africa, the Middle East, and Southeast Asia reflects this ambition. These new members bring energy resources, strategic geography, and political clout, further enhancing BRICS’ ability to challenge Western dominance in forums like the G20, WTO, and UN.
Tariff Tug-of-War & What the U.S. Risks Losing
While Trump’s tariffs were framed as a defense of American workers and industries, they came with significant costs, both economic and strategic.
1. Domestic Economic Pain
Multiple studies have shown that tariffs led to higher prices for U.S. consumers and businesses. The Peterson Institute for International Economics estimated that the average American household paid hundreds more annually due to increased costs on goods ranging from washing machines to electronics.
Exporters also suffered. Retaliatory tariffs from China, India, and others hit U.S. farmers, manufacturers, and tech firms hard. Soybean exports to China plummeted. Harley-Davidson faced higher costs abroad. Even iconic brands like Apple saw disruptions in their supply chains.
2. Strategic Isolation
By targeting allies and adversaries alike, Trump’s tariff strategy alienated key partners. India, once seen as a natural counterweight to China, began hedging its bets, deepening ties with Russia and joining BRICS-led initiatives. Brazil, traditionally aligned with Western trade norms, leaned into its role as a BRICS agricultural powerhouse.
This erosion of trust has long-term implications. As BRICS gains cohesion and expands its influence, the U.S. risks losing its ability to shape global norms and broker multilateral agreements.
3. Dollar Vulnerability
Perhaps the most profound consequence is the threat to dollar dominance. For decades, the dollar has been the backbone of global trade and finance. But as BRICS nations promote local currencies and digital payment systems, the dollar’s centrality is being challenged.
If fewer countries settle trade in dollars, the U.S. loses leverage, not just economically, but geopolitically. Sanctions become less effective. Financial surveillance becomes harder. And the U.S. finds itself competing in a financial landscape it once controlled.
A Multipolar Future: The New Rules of Engagement
Trump’s tariffs were a bold move, but they may have accelerated a shift that was already underway. The rise of BRICS, fueled in part by U.S. protectionism, signals a world where power is more distributed, alliances are more fluid, and economic influence is no longer the sole domain of the West.
For the U.S., this means adapting, not retreating. It means engaging with emerging powers on equal footing, reforming global institutions to reflect new realities, and investing in domestic resilience without alienating global partners.
For BRICS, it’s an opportunity to redefine global governance, promote inclusive development, and offer alternatives to Western-led models. But with opportunity comes responsibility. As the bloc grows in ambition, it must also navigate internal differences, ensure transparency, and uphold the values it claims to champion.
Conclusion
The tariff tug-of-war may have started as a domestic political manoeuvre, but its ripple effects are reshaping the global order. BRICS is no longer just a collection of emerging economies, it’s a rising force, galvanized by shared challenges and a vision for a more balanced world. And as the U.S. recalibrates its role, the question isn’t whether it can lead but whether it can listen, adapt, and collaborate in a world it no longer dominates alone.
Also read – Mexico Stands Tall: Claudia Sheinbaum’s Bold Foreign Policy Defies U.S. Pressure Over BRICS Ties