The BRICS economic bloc, composed of Brazil, Russia, India, China, and South Africa, has been expanding rapidly and poses a growing challenge to U.S. dominance in global trade. With the recent inclusion of Egypt, Ethiopia, Iran, and the United Arab Emirates, the group now has over 30 nations expressing interest in joining. Despite this growing influence, the United States, under President-elect Donald Trump, has signaled a potential response in the form of a 100% tariff on BRICS countries if they continue to undermine the U.S. dollar’s role as the global trade currency. However, analysts argue that this threat is unlikely to curb the group’s expansion, given its increasing geopolitical and economic influence.

Historically, the BRICS coalition was established in 2009 by Brazil, Russia, India, and China, with South Africa joining the following year. The group’s primary goal was to challenge the Western-dominated global order by fostering greater economic and political cooperation among emerging markets. As the bloc expands and includes more countries, such as those in Africa and the Middle East, its influence on global trade grows. However, the U.S., which has long maintained the dollar’s supremacy in international finance, sees BRICS’ efforts to undermine this dominance as a direct challenge to its economic power.

Donald Trump has made clear his position regarding BRICS and the U.S. dollar, vowing to impose a 100% tariff on countries within the group if they continue to pursue de-dollarization. This threat is a reaction to Russia’s long-standing push for alternatives to the U.S. dollar, especially after the West imposed sanctions on Moscow. President Vladimir Putin has frequently criticized the U.S. dollar’s use as a “weapon” in global finance, particularly in relation to sanctions that target Russia’s economy. Consequently, there have been discussions within BRICS about the possibility of creating a shared currency or increasing the use of local currencies for trade. While these discussions have not yet yielded significant results, the possibility remains a core focus of the group’s strategic planning.

However, analysts believe that Trump’s tariff threat may be more symbolic than effective. According to Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, applying a blanket tariff on BRICS countries would risk pushing neutral countries into China’s orbit, strengthening Beijing’s position in the global economy. This would undermine U.S. interests, particularly in regions where the U.S. has long-standing trade relations. The sheer size of the BRICS coalition and its growing economic clout make such punitive measures difficult to enforce without unintended consequences.

China, in particular, is positioned to play a significant role in mitigating the impact of U.S. tariffs on BRICS members. Beijing has already implemented a zero-tariff policy for least developed countries, and this policy is expected to expand to further support nations with diplomatic ties to China. As many as 120 countries already count China as their primary trading partner, and this network of trade relationships could provide a cushion for BRICS members if U.S. tariffs are applied. David Lubin, senior research fellow at Chatham House, notes that China’s strategy to establish itself as an alternative pillar of global order is crucial for its broader geopolitical goals. Therefore, China would likely step in to support BRICS nations in the face of U.S. trade measures.

At the heart of the dispute between the U.S. and BRICS is the role of the U.S. dollar in global trade. While Russia has pushed for de-dollarization as a way to circumvent U.S. sanctions, the idea of replacing the dollar as the global reserve currency faces significant challenges. The dollar remains the dominant currency in global trade, and financial markets continue to be largely denominated in U.S. dollars. Although some BRICS countries, such as China and Russia, have engaged in bilateral trade using local currencies like the yuan and ruble, these efforts have not yet threatened the dollar’s position as the world’s most widely used trade currency.

Moreover, the idea of a BRICS-backed unified currency has not gained traction. While Brazil has proposed the idea of a shared currency, it has not yet gained enough support from other BRICS members. Additionally, the creation of a common BRICS currency would require significant coordination and economic integration, which remains challenging given the diverse economic interests and political landscapes of BRICS countries. Some analysts, such as Chatham House’s Lubin, argue that while the Chinese yuan is an important player in the BRICS currency discussions, it remains far less usable internationally than the dollar, limiting its potential as a viable alternative.

Despite these challenges, the BRICS bloc continues to make significant strides in increasing its global influence. The 16th BRICS summit in Kazan, Russia, saw the official admission of Egypt, Ethiopia, Iran, and the UAE, signaling the group’s expanding reach. Additionally, more than 30 countries have reportedly expressed interest in joining BRICS in 2024. This expansion reflects the group’s growing influence, particularly among developing economies that see membership as a way to bolster their global standing and access alternative sources of trade and finance.

The increasing number of nations seeking to join BRICS suggests that the coalition’s expansion will likely continue, regardless of the U.S. response. The group’s internal cohesion, however, remains a point of contention. Analysts like Mihaela Papas of MIT’s Center for International Studies note that while China seeks to leverage its economic position, other BRICS members remain cautious about Beijing’s growing dominance. Countries such as India, Brazil, and South Africa may seek to balance China’s influence with their own interests, which could limit the group’s ability to present a unified front on key issues, such as de-dollarization.

Despite the internal dynamics within BRICS, the coalition’s growth indicates a shifting global order. While the U.S. may view BRICS as a challenge to its economic dominance, the bloc’s expansion and cooperation with emerging markets signal a move towards a more multipolar world. Whether BRICS can effectively challenge the U.S. dollar’s supremacy remains uncertain, but the group’s growing economic and political clout suggests that its influence will continue to rise in the coming years.

In conclusion, while Trump’s 100% tariff threat may be a significant symbolic gesture, analysts believe that it is unlikely to derail BRICS’ expansion or its efforts to challenge the U.S. dollar. The growing cooperation between BRICS nations and their willingness to explore alternative trade arrangements suggest that the bloc is becoming an increasingly important force in the global economy. As the world continues to shift towards a multipolar order, the role of BRICS in shaping future global trade and finance will only grow more significant.

(Adapted from CNBC.com)