The Trump administration’s recent tariff policies have intensified tensions with BRICS nations. The unpredictable use of tariffs against Brazil, South Africa, China and Russia marks shift in global economic relations. This has prompted strategic recalibrations among BRICS members and exposed cracks in the Western-led world order.
Trump’s Tariff Strategy Against BRICS
The US imposed high tariffs on Brazil and India, reaching 50 per cent. South Africa faces 30 per cent tariffs and aid cuts. China and Russia are targeted differently, with threats linked to currency and trade policies. These tariffs are often seen as unilateral sanctions lacking clear justification. The approach reflects Trump’s tendency to use tariffs as a political tool rather than based on detailed economic analysis.
BRICS’ Response and Unity
Brazil’s President Lula called the tariffs unacceptable blackmail and urged BRICS countries to unite. India has responded cautiously, avoiding escalation. China and Russia remain central to BRICS’ vision of a new global order. The group is exploring ways to strengthen economic ties and reduce dependence on the US dollar, though full de-dollarisation remains distant and complex.
Challenges of De-dollarisation
BRICS discussions on replacing the US dollar with a common currency lack consensus. Proposals like a gold-backed “Unit” face scepticism. The process is complicated by diverse economic systems and geopolitical interests. Historical precedents, such as the Euro’s four-decade evolution, show the difficulty of such monetary integration. China itself is reluctant to promote the yuan as a global reserve currency.
Impact on Global Order
BRICS challenges the Western-dominated financial system established after World War II. Trump’s tariffs aim to maintain US economic dominance but risk alienating key allies like India. The current geopolitical environment is marked by a fragmentation of alliances and new power centres. The war in Ukraine and shifting alliances signal the end of a 70-year period of relative peace among major powers.
Western Divisions and Future Prospects
Trump’s policies have deepened divisions within the West, notably between the US and Europe. Concerns about a Yalta II scenario evoke fears of renewed great power rivalries. The global economic and political landscape is undergoing a Zeitenwende or turning point. While Trump seeks to suppress BRICS’ rise, these actions may instead strengthen the bloc’s resolve and cooperation.
Trump’s Political Motives
Tariffs serve as a political tool to rally domestic support and create distractions. Trump’s economic strategy is often impulsive and lacks long-term coherence. His approach reflects a zero-sum worldview where US hegemony is non-negotiable. This stance overlooks the evolving multipolar world and emerging economic realities.
BRICS as a Catalyst for Change
BRICS is no longer a mere acronym but a force shaping a new global order. Its vision includes greater economic cooperation and reduced Western influence. The bloc’s actions may accelerate the transition to a more multipolar world. The future of global governance and finance may hinge on how BRICS navigates these challenges.
Questions for UPSC:
- Discuss the implications of the US tariffs on BRICS countries for global economic governance.
- Critically examine the challenges and prospects of de-dollarisation in the international monetary system.
- Explain the impact of shifting global alliances on the post-World War II international order with suitable examples.
- With suitable examples, discuss how emerging economies like BRICS influence the concept of multipolarity and global power dynamics.
