In a move that has sent ripples through the global economic landscape, President Donald Trump has announced plans to impose heavy tariffs on imports from Canada, Mexico, and China. The tariffs are aimed at addressing the failure of Canada and Mexico to stop illegal migration and combat the flow of fentanyl and other illegal drugs into the United States. This includes a 25% additional tariff on goods from Canada and Mexico, set to take effect in February, with a 10% tariff on imports from China.
The BRICS bloc—comprising the nucleus of Brazil, Russia, India, China, and South Africa—along with a growing number of new members like Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, the United Arab Emirates, Indonesia, and others waiting in the pipeline, is expanding its influence on the global stage. The bloc has been exploring avenues to reduce dependence on the U.S. dollar, a move perceived as a direct challenge to American financial hegemony. Russia and China, in particular, have been vocal proponents of establishing an alternative currency to facilitate international trade within the bloc. India, however, has expressed scepticism about adopting a single BRICS currency, with External Affairs Minister S. Jaishankar emphasizing the complexities involved in aligning the fiscal, monetary, economic, and political policies of member nations.
Trump’s aggressive stance underscores a broader strategy to reassert U.S. dominance in global trade and finance. By leveraging tariffs as a punitive measure, the administration aims to deter developing nations, both fast-developing and still underdeveloped, from pursuing economic policies that could dilute the dollar’s supremacy. However, this approach risks alienating key trading partners and could trigger retaliatory measures, potentially destabilizing international markets.
The imposition of tariffs on Canada and Mexico, both integral partners in the United States-Mexico-Canada Agreement (USMCA), marks a significant departure from the cooperative framework established under the agreement. The tariffs are expected to increase consumer costs in the U.S., particularly in sectors such as electronics, groceries, and apparel, as businesses pass on the additional expenses to consumers. Critics argue that such protectionist policies may backfire, leading to supply chain disruptions and strained diplomatic relations. The threatened 100% tariff on BRICS nations, should they move forward with a new currency, could further complicate international trade dynamics.
Beyond immediate economic ramifications, Trump’s return and his renewed focus on tariffs could significantly impact the geopolitical order. His previous tenure saw the U.S. pulling out of multilateral agreements, withdrawing from the Paris Climate Accord, and engaging in trade wars that led to unpredictable economic volatility. His potential second term appears poised to follow a similar trajectory, with an emphasis on economic nationalism that could accelerate global economic fragmentation.
The BRICS, now essentially the BRICS Plus bloc, has steadily grown in influence, not just in economic terms but also as a geopolitical counterweight to Western-dominated institutions such as the IMF and World Bank. The expansion of BRICS, with new potential members like Nigeria and Pakistan, signals a strategic shift toward an alternative global financial architecture.
If these countries move forward with a shared currency or trade settlements in local currencies, the U.S. dollar’s pre-eminence in global transactions could face significant challenges.
Yet, within BRICS itself, there are notable fissures. India, a key player in the bloc, has maintained a balanced approach in its foreign policy, often aligning with the West on critical matters while engaging pragmatically with Russia and China. Unlike Russia and China, which advocate aggressively for a multipolar world order, India remains cautious in upsetting the global economic status quo. New Delhi’s hesitation toward a BRICS currency is indicative of broader concerns regarding sovereignty, economic autonomy, and its existing economic ties with the U.S. and Europe.
China, on the other hand, has been steadily pushing for de-dollarization, particularly through initiatives such as the Belt and Road Initiative (BRI) and Digital Yuan expansion. Russia, hit hard by Western sanctions following its Ukraine conflict, has accelerated its push for financial alternatives, increasingly conducting trade with China and other partners in non-dollar transactions. Brazil and South Africa, while supportive of BRICS initiatives, lack the economic leverage that China and Russia have to drive such fundamental changes in the global financial system.
Trump’s return to power injects further unpredictability into these evolving dynamics. His history of unilateralism suggests a likelihood of heightened economic confrontations, particularly with China, which he has repeatedly accused of «cheating» in trade. If he follows through on his 100% tariff threat, BRICS countries could respond by deepening their efforts to circumvent the dollar, potentially accelerating global financial fragmentation.
Moreover, a more protectionist America under Trump 2.0 could create unexpected strategic realignments. India, which has cautiously engaged with BRICS while maintaining strong ties with the U.S., may be forced to recalibrate its position depending on the economic consequences of American trade policies. Likewise, the European Union, already wary of Trump’s «America First» doctrine, might seek to strengthen economic partnerships with BRICS nations, particularly in the wake of energy supply disruptions caused by the Ukraine war.
For Russia, Trump’s tightening grip over U.S. administrative machinery presents both opportunities and risks. On one hand, Trump has historically expressed scepticism toward NATO and questioned the extent of U.S. involvement in Ukraine, positions that align with Moscow’s strategic interests. On the other hand, his tariff threats and potential economic hostility toward BRICS could complicate Russia’s economic recovery, given its increasing reliance on non-Western trade partners.
China, often seen as the primary target of Trump’s economic policies, faces a more challenging scenario. The first Trump administration saw an intense U.S.-China trade war that led to tariffs on billions of dollars worth of goods. A second Trump term could escalate this conflict, particularly if he seeks to cut off Chinese access to critical technologies or limit its influence in global supply chains, such as restricting access to high-bandwidth memory chips crucial for AI applications, as seen with recent curbs on U.S. and foreign companies like South Korea’s SK Hynix Inc. and Idaho-based Micron Technology Inc
Amid these uncertainties, BRICS itself must navigate internal contradictions. While the bloc aims to challenge Western financial dominance, the differing priorities of its members create internal roadblocks.
A more aggressive U.S. under Trump may either accelerate BRICS cohesion as a defensive response or expose fault lines as individual members prioritize national interests over collective action.
The return of Trump thus heralds a new era of strategic uncertainty. His tariff-centric policies, coupled with BRICS’ growing push for de-dollarization, could reshape global economic alignments in unprecedented ways. While the full impact remains to be seen, what is certain is that both the U.S. and BRICS nations are entering a period of intensified economic and geopolitical contestation. The coming years will likely determine whether these tensions lead to a fundamental shift in the global financial order or merely reinforce existing divisions in an increasingly fragmented world economy.