Trump’s Tariffs and BRICS: Towards a Resilient Bloc?

Summary

President Donald Trump’s tariffs have underscored the need to use BRICS as a platform to promote global governance reform and multi-polarity. At the same time, India must balance this role with its broader network of partnerships.

On 31 July 2025, United States (US) President Donald J. Trump signed an executive order revising tariff rates announced in April. The new measures imposed a blanket 10 per cent tariff on all imports, with even higher rates targeting goods from 92 specific countries.[1] One of the policy’s goals was to pressure emerging economic groupings, including BRICS. Trump had warned on 7 July that any country supporting BRICS’ anti-American policies would face an additional 10 per cent tariff.[2] Recently, his trade advisor, Peter Navarro, went further, describing the BRICS countries as “vampires that suck US blood”.[3]

India and Brazil now face tariffs of up to 50 per cent on key exports, China has been slapped with a 145 per cent tariff, and South Africa faces a 30 per cent hike. In response, the BRICS nations took the unusual step of convening an extraordinary virtual meeting to coordinate their response. This raises a critical question: Will Trump’s tariffs weaken BRICS as intended, or could they paradoxically drive the bloc towards closer cooperation?

Trump’s Tariff War

Trump’s protectionist trade policy began during his first term. He frequently claimed that the US was being exploited by its trading partners. Pursuing this agenda, he withdrew the US from multilateral agreements such as the Trans-Pacific Partnership (TPP)[4] and renegotiated existing contracts, including the North American Free Trade Agreement (NAFTA).[5]

Central to Trump’s trade war strategy was the imposition of tariffs on steel, aluminium, and a wide range of Chinese goods to reduce the trade deficit and address perceived unfair practices. The trade war initially focused on China, targeting alleged intellectual property theft, unfair trade subsidies, and China’s large trade surplus with the US.[6] These measures marked a significant departure from decades of US engagement in multilateral trade, signalling a move towards unilateral actions and setting the stage for subsequent trade tensions with other emerging economies, including BRICS members.

Trump’s second term saw an intensification of the tariff war. On 20 January 2025, Trump signed the ‘America First Trade Policy Memorandum’, directing an investigation into the causes and implications of the US trade deficit and its potential national security implications.[7] The memorandum also sought to identify unfair trade practices employed by foreign partners. Subsequently, on 1 February, the administration imposed tariffs ranging from 10 to 25 per cent on a wide range of imports from China, Canada and Mexico.[8] On 13 February, a second memorandum titled ‘Reciprocal Trade and Tariffs’ was issued, emphasising a review of non-reciprocal trade practices and their link to the growing trade deficit.[9]

In response to US tariffs, affected countries introduced retaliatory measures. The US then announced a 90-day pause on reciprocal tariffs, excluding China. Tariffs on Chinese imports were raised to 125 per cent, prompting Beijing to impose the same rate on US goods.[10] Following high-level talks in Geneva, both sides agreed to a 90-day truce. The US reduced tariffs on Chinese goods from 145 per cent to 30 per cent, while China lowered its tariffs from 125 per cent to 10 per cent.[11] On 7 July, the US extended the suspension of tariffs till 1 August 2025.[12] However, on 31 July, President Trump signed an Executive Order modifying the reciprocal tariff rates. The order imposed tariffs ranging from 10 to 41 per cent on imports to the US from several trade partners.

BRICS’s Response to the Tariffs

BRICS has often been criticised for its internal differences. India and China, for example, are frequently seen as rivals, with their long-standing border dispute and strategic competition creating tensions within the group.[13] Russia and China also have competing interests in Central Asia, adding another layer of friction.[14] Beyond these geopolitical issues, the member countries have very different domestic systems, ranging from China’s one-party rule to India’s democracy, which makes finding common ground challenging. Because of these differences, sceptics argue that even with an expanded membership and the creation of institutions such as the New Development Bank (NDB), BRICS remains more a loose coalition of convenience than a truly united group.

However, Trump’s Tariff war acted as a catalyst for bridging some of the differences. As the US adopted an inward-looking, protectionist stance under Trump’s America First policies, BRICS countries enhanced their economic cooperation. Trump, for instance, threatened 100 per cent tariffs if BRICS challenges the US dollar by promoting a new currency.[15] He subsequently imposed 50 per cent tariffs on India and Brazil, and 30 per cent on South Africa. China, the largest BRICS economy, faces a 145 per cent tariff if it fails to reach a deal with the US.[16] In response, BRICS countries adopted a multifaceted strategy, enhancing economic and political coordination while engaging in strategic signalling.

Enhanced Coordination and Strategic Signalling

Although the tariffs were intended to pressure and fragment BRICS, they had the opposite effect, pushing member countries closer together. For example, the 17^th BRICS Leaders’ Statement criticised the US measures as unilateral and warned that such protectionism harms global trade and disrupts supply chains.[17] The tariffs also pushed BRICS members to begin closer bilateral diplomatic engagement.

For India, the tariffs highlighted both risks and opportunities. Despite its strategic engagement with the US on security and Indo-Pacific strategy, the tariffs revealed that Washington’s economic interests take precedence, offering little protection for partners. India responded to the tariffs by deepening engagement within BRICS. On 7 August, Prime Minister Narendra Modi spoke with Brazilian President Lula da Silva on global trade and to forge closer coordination.[18] Modi also held a telephone discussion with Russian President Vladimir Putin, reaffirming the India–Russia strategic partnership.[19] Soon after, India also sent its national security advisor and external affairs minister to Moscow to strengthen diplomatic ties further.[20]

India–China relations also showed signs of improvement, partly driven by the shared impact of the tariffs. This was first reflected in China’s confirmation of Prime Minister Modi’s attendance at Tianjin’s Shanghai Cooperation Organisation (SCO) summit.[21] Later, on 18–19 August, Chinese Foreign Minister Wang Yi visited New Delhi and held talks with Prime Minister Modi and External Affairs Minister S. Jaishankar.[22]

Further, China’s ambassador to India, Xu Feihong, publicly expressed Beijing’s firm opposition to Washington’s steep tariffs on New Delhi and emphasised the need for enhanced cooperation between India and China.[23] Modi’s subsequent visit to China for the SCO meeting on 31 August–1 September further reflected this thaw. During his visit, he engaged with the Chinese leadership and met Putin, signalling India’s commitment to deepening ties with its key BRICS partners.[24]

Extraordinary Virtual Meeting

BRICS’ push for unity gained further momentum on 8 September, when the group held an extraordinary virtual meeting at the initiative of Brazilian President da Silva to discuss the unilateral US tariffs. During the meeting, Lula emphasised that closer trade and financial integration among BRICS members would help reduce the impact of protectionism and strengthen the bloc’s collective resilience.[25]

Xi Jinping echoed this sentiment, calling for a strong and unified response to the Trump administration’s trade challenges. He noted that, as a leading voice of the Global South, BRICS must embody openness, inclusiveness, and win-win cooperation while defending multilateralism and advancing deeper internal coordination.[26]

External Affairs Minister S. Jaishankar highlighted the need for joint action. He said raising barriers or linking trade with unrelated issues would not solve problems. Instead, he suggested BRICS should review trade among its members to show its commitment to fair and open practices.[27] South African President Cyril Ramaphosa warned that unilateral tariffs contributed to a more protectionist environment, posing serious risks for the Global South. He noted that global trade was undergoing seismic shifts, transitioning from a unipolar to a multipolar world order.[28]

The above responses show a broader effort by BRICS members to strengthen unity and coordination in the face of US tariffs. The tariffs have reinforced cohesion by encouraging members to expand trade, enhance financial cooperation, and deepen diplomatic engagement. Yet, for BRICS to evolve into a truly resilient and influential player in the changing global landscape, it must go beyond these immediate steps and pursue more comprehensive strategies aimed at long-term stability and global influence.

Building a Resilient BRICS Requires More

To become a resilient bloc, BRICS must focus on four key areas: diversifying trade; strengthening financial autonomy; fostering political cohesion; and advancing an inclusive multipolar world order.

Diversification of Trade

For BRICS, diversifying trade is critical to reducing vulnerability to external shocks, protectionist policies, or geopolitical tensions. Over-reliance on a narrow set of markets exposes member states to economic risks. The bloc can reduce dependence on Western economies by expanding regional trade networks and strengthening intra-BRICS trade. This requires deeper integration in value chains, improved logistics and infrastructure, and more harmonised trade rules. A broader, more balanced trade portfolio drives growth and enhances economic security.

With its expanded membership, BRICS now represents 41 per cent of global GDP (PPP), 56 per cent of the global population and about 40 per cent of global trade.[29] Between 2015 and 2025, the bloc contributed 54.5 per cent of global GDP growth.[30] From 2002 to 2021, BRICS trade grew more than sevenfold, rising from US$ 572 billion to over US$ 4.2 trillion.[31] Moreover, intra-BRICS trade reached approximately US$ 1 trillion in 2024, accounting for 20 per cent of the bloc’s total exports and 30 per cent of its imports.[32]

Energy trade further highlights BRICS’s strategic potential. With the inclusion of Iran, Egypt, Ethiopia, and the UAE, the bloc now controls about 32 per cent of global oil production and more than 30 per cent of natural gas output. Saudi Arabia’s potential formal membership would further boost these percentages. BRICS also holds around 72 per cent of the world’s rare earth reserves.[33]

Despite these strengths, intra-BRICS trade remains limited compared to members’ ties with Western economies. Proposals such as a BRICS Free Trade Agreement, common trade rules, and investment protections could strengthen supply chains, lower barriers, and facilitate cross-border projects. Members have imposed about 232 trade-restricting measures on each other, highlighting the need to lower internal barriers for stronger integration.[34] Similarly, average tariffs among the 10 BRICS members are 8.4 per cent, compared to just 1.1 per cent for OECD countries.[35] Addressing these barriers will be critical for deeper economic integration.

Financial Autonomy

The dominance of the US dollar in global trade exposes BRICS members to sanctions, currency swings and policy shifts. The bloc increasingly uses local currencies in cross-border trade to reduce these risks.[36] For instance, in 2024, Russia–China trade reached US$ 243 billion, with over 90 per cent settled in rubles and yuan, compared to almost all in dollars in 2015.[37] Brazil and China signed a 2023 agreement allowing payments in local currencies, while more than 95 per cent of Russia–Iran trade in 2024 was conducted in rubles and rials.[38] India has also expanded local currency settlements with 156 Special Rupee Vostro Accounts opened by 123 banks from 30 countries by 2025, facilitating trade in Indian rupees.[39]

Initiatives such as the BRICS Cross-Border Payment Initiative (BCBPI), a multi-currency settlement platform, BRICS Pay, an alternative to SWIFT, and the Interbank Cooperation Mechanism are designed to support transactions in local currencies. The proposed BRICS Reinsurance Company further supports the goal of financial autonomy. In addition, BRICS countries are experimenting with digital currencies for cross-border trade.[40]

By developing alternative financial systems and reducing overdependence on the US dollar, BRICS can mitigate exposure to global financial volatility. Nevertheless, this transition must be approached with caution. The objective should not be to undermine the dollar’s central role in global finance but to expand the range of settlement options and reduce systemic vulnerabilities. A balanced multi-currency framework would protect against instability and the weaponisation of trade.

Political Cohesion

BRICS brings together countries with diverse political systems, regional interests and economic models. These differences in financial strength and geopolitical outlook raise a key question: Does BRICS operate as a cohesive coalition with shared goals, or is it mainly held together by periodic summits and symbolic cooperation? The complex relationship between India and China, the bloc’s two largest economies, highlights the tensions within BRICS. Similar challenges exist elsewhere: Egypt and Ethiopia, both members, remain divided over the Grand Ethiopian Renaissance Dam, while in West Asia, Iran’s confrontation with Israel contrasts with the UAE’s position. Managing such divergent interests will be vital for building a stronger and unified BRICS.

Advancing a Multipolar World Order

To consolidate its global role, BRICS must commit to advancing a multipolar world order. The current international system continues to reflect disproportionate Western dominance. Moreover, the intensifying US–China rivalry risks reconfiguring the global order into a bipolar structure. A bipolar system, however, could constrain BRICS by compelling members to align with one pole. It would also undermine their strategic autonomy and diminish their capacity to operate as independent actors.

By contrast, a multipolar order provides greater scope for inclusivity, balance and representation. It would enable BRICS to act as a catalyst for reform in institutions such as the IMF, World Bank and United Nations, ensuring that global governance reflects contemporary power dynamics. In this context, multi-polarity is not simply a rejection of unilateralism but a framework for building a more equitable international system. In advancing multi-polarity, BRICS can enhance its global standing and create a fairer, more stable international order in which emerging economies are not passive recipients of rules but active participants in shaping them.

Conclusion

Trump tariffs have strengthened BRICS by fostering unity within the bloc and highlighting the need for alternative platforms of economic cooperation. This development underlines BRICS’ growing role as a counterweight to unilateralism and the bloc’s potential to shape an emerging multipolar order. However, challenges remain. To become an influential actor in the global system, BRICS must adopt more comprehensive strategies that ensure long-term stability and sustained influence.

For India, Trump’s tariffs underscore critical strategic lessons. They have exposed the limitations of excessive reliance on the US for economic security while simultaneously reinforcing the importance of BRICS as a platform for collective bargaining and pursuing alternative institutional frameworks.

However, India must balance its expanding role within BRICS with preserving its broader global partnerships. An overtly anti-Western orientation within the bloc could constrain India’s strategic autonomy and reduce its flexibility in foreign policy. Bottom of Form

In this context, safeguarding India’s long-term interests will require using BRICS to promote global governance reform and multi-polarity while actively engaging with diverse actors and institutions.

[1] “Further Modifying the Reciprocal Tariff Rates”, Executive Orders, The White House, 31 July 2025.

[2] Donald Trump, “Any Country aligning themselves with the Anti-American policies of BRICS…”, Truth Social, 7 July 2025.

[3] “BRICS Nations ‘Vampires’ who are ‘Sucking the US Blood Dry’ with Unfair Trade Practices: Trump Aide Peter Navarro”, The Economic Times, 10 September 2025.

[4] “The United States Officially Withdraws from the Trans-Pacific Partnership”, Office of the United States Trade Representative, 1 January 2017.

[5] “USTR: Trump Administration Announces Intent to Renegotiate the North American Free Trade Agreement”, Office of the United States Trade Representative, 18 May 2017.

[6] “USTR Finalizes Tariffs on $200 Billion of Chinese Imports in Response to China’s Unfair Trade Practices”, Office of the United States Trade Representative, Executive Office of the President, 18 September 2018.

[7] “America First Trade Policy”, The White House, 20 January 2025.

[8] “Fact Sheet: President Donald J. Trump Imposes Tariffs on Imports from Canada, Mexico and China”, The White House, 1 February 2025.

[9] “Reciprocal Trade and Tariffs”, The White House, 13 February 2025.

[10] “Announcement of the Tariff Commission of the State Council on Adjusting Tariffs on Imports from the United States”, Ministry of Finance of the People’s Republic of China, 11 April 2025.

[11] “Joint Statement on U.S.-China Economic and Trade Meeting in Geneva”, The White House, 12 May 2025.

[12] “Extending the Modification of Reciprocal Tariff Rates”, The White House, 7 July 2025.

[13] Raj Verma and Mihaela Papa, “BRICS amidst India-China Rivalry”, Global Policy Journal, Vol. 12, No.  4, 2021.

[14] Joseph S Nye Jr, “What are the BRICS Good for?”, Project Syndicate, 2 January 2025.

[15] “Trump Repeats Tariffs Threat to Dissuade BRICS Nations from Replacing US Dollar”, Reuters, 31 January 2025.

[16] “Trump Says China Tariffs Will Come Down from 145%”, Reuters, 9 May 2025.

[17] “Rio de Janeiro Declaration: Strengthening Global South Cooperation for a More Inclusive and Sustainable Governance”, Rio de Janeiro, Brazil, 6 July 2025.

[18] “PM Narendra Modi Receives a Telephone Call from the President of Brazil (August 07, 2025)”, Ministry of External Affairs, Government of India, 8 August 2025.

[19] “PM Narendra Modi Speaks with President Putin”, Ministry of External Affairs, Government of India, 8 August 2025.

[20] “Visit of External Affairs Minister to Russia (August 19-21, 2025)”, Ministry of External Affairs, Government of India, 22 August 2025; “NSA Ajit Doval Meets Russian President Vladimir Putin In Moscow; Russian President To Visit India Soon”, News on Air, 8 August 2025.

[21] “Prime Minister’s Visit to Japan and China (August 29 – September 01, 2025)”, Ministry of External Affairs, Government of India, 22 August 2025.

[22] “Visit of Foreign Minister of China to India (August 18-19, 2025)”, Ministry of External Affairs, Government of India, 19 August 2025.

[23] “Beijing Opposes ‘Bully’ US for 50% Tariffs on India”, BBC, 22 August 2025.

[24] “Prime Minister’s Bilateral Meeting with Chinese President Xi Jinping (August 31, 2025)”, Ministry of External Affairs, Government of India, 31 August 2025; “Prime Minister Shri Narendra Modi Met H.E. Mr. Vladimir Putin, President of Russia on the sidelines of the SCO Summit in Tianjin, China”, Ministry of External Affairs, Government of India, 1 September 2025.

[25] “President Lula’s Speech at the BRICS Virtual Summit”, 8 September 2025.

[26] “President Xi Jinping Attends Virtual BRICS Summit and Delivers Important Statement”, Embassy of the People’s Republic of China in India, 8 September 2025.

[27] “EAM’s Remarks during Virtual Summit of BRICS Leaders (September 08, 2025)”, Ministry of External Affairs, Government of India, 8 September 2025.

[28] “Statement by President Cyril Ramaphosa to the Extraordinary BRICS Leaders Meeting”, Official Information and Services, Government of South Africa, 8 September 2025.

[29] “BRICS GDP Outperforms Global Average, Accounts for 40% of World Economy”, BRICS Brazil 2025, 2 May 2025.

[30] “BRICS”, World Economics, September 2025.

[31] “Trade for Industrial Development: Leveraging the Potential of BRICS for Developing Countries”, United Nations Industrial Development Organization, February 2025.

[32] “BRICS Business Forum Identifies Pathways to Foster Economic Growth and Enhance Productive Integration Across the Global South”, BRICS Brazil 2025, 5 July 2025.

[33] Alisa Kazelko and Uirá Sorbo Semeghini, “Expansion of BRICS: Implications for Global Energy Markets”, BRICS Journal of Economics, Vol. 5, No. 1, 2024, pp. 53–67.

[34] “International Trade Can BRICS Countries Capitalize on the Shifting Landscape of Global Trade?”, Boston Consulting Group, 3 July 2015.

[35] Ibid.

[36] Kazan Declaration, Strengthening Multilateralism for Just Global Development and Security, XVI BRICS Summit, Kazan, Russian Federation, 23 October 2024.

[37] Elina Ribakova, “Economic Linkages and Sanctions Evasion Export Controls and Technology Transfer: Lessons from Russia”, US-China Economic and Security Review Commission, 20 February 2025.

[38] “China, Brazil to Trade in Local Currencies”, State Council Information Office of China (SCIO), People’s Republic of China, 31 March 2023; “The Growing Trend of De-dollarisation: Not Restricted to BRICS Member States”, Diplomatist, 27 May 2025.

[39] “India’s RBI Allows ‘Vostro’ Accounts to Invest Entire Surplus in Government Securities”, Reuters, 12 August 2025.

[40] “China Uses Digital Rmb to Settle First Cross Border Oil Transaction”, Ledger Insights, 20 October 2023.