Why in news?

President Trump has threatened 10% tariffs on BRICS nations after their Rio summit 2025, continuing his pattern of trade-related warnings.

What’s in Today’s Article?

• Trump Sees BRICS as a Threat
• Tariff Threats Targeting BRICS
• BRICS Denies De-Dollarisation Threat
• India Distances Itself from BRICS De-Dollarisation Push
• BRICS: Diverse Members, Common Frustration

Trump Sees BRICS as a Threat

• Donald Trump views BRICS as “anti-American” due to its push for a BRICS common currency and cross-border payment systems that bypass the US dollar.
• He has repeatedly threatened high tariffs to deter such moves, especially after BRICS expanded and promoted local currency trade following Western sanctions on Russia.

Tariff Threats Targeting BRICS

• As BRICS leaders met recently in Rio for the 17th BRICS summit, President Trump warned of an additional 10% tariff on any country aligning with BRICS, calling it a penalty specifically for BRICS membership.
• Though earlier he had threatened 100% tariffs, it's unclear if or when these measures will be enforced.
• Trump's irritation is largely driven by BRICS efforts to bypass the U.S. dollar in global trade.
• Alongside this, his administration has imposed 50% tariffs on Brazil, citing political bias against former President Bolsonaro, and 30% tariffs on South Africa over trade disputes and concerns about Afrikaner rights.
• Trump is also pushing for the Sanctioning Russia Act of 2025, proposing 500% tariffs on Russian oil and sanctioned products — a move that could directly affect India and China, two major Russian oil importers.

BRICS Denies De-Dollarisation Threat

• BRICS members have rejected Mr. Trump’s concerns about de-dollarisation, clarifying that using national currencies within BRICS isn't aimed at replacing the U.S. dollar globally.
  • De-dollarisation is the effort to reduce dependence on the US dollar as a reserve currency, medium of exchange, and unit of account.
  • This push intensified after Russia’s invasion of Ukraine, which led to sanctions and exclusion from dollar-based systems like SWIFT.
  • Countries viewed this as the U.S. weaponizing the dollar. Additionally, overreliance on the dollar creates global financial vulnerabilities.
  • Emerging economies, gaining economic strength, now seek a more balanced and diversified financial system.
• The 2025 BRICS Rio Declaration avoids direct challenges to the dollar, focusing instead on improving cross-border payment system interoperability.
• While some leaders' rhetoric has been anti-U.S., official BRICS statements only express general concerns over unilateral trade measures without naming the U.S.

India Distances Itself from BRICS De-Dollarisation Push

• India has firmly rejected U.S. claims that BRICS is "anti-American."
• The government clarified in Parliament that Russia's report on alternative currencies was merely noted, not endorsed by all BRICS members.
• External Affairs Minister S. Jaishankar confirmed there is no Indian policy to replace the U.S. dollar, highlighting differences within BRICS on this matter.

BRICS: Diverse Members, Common Frustration

• Founded in 2009 after the U.S. financial crisis, BRICS now includes 10 countries.
  • BRICS has expanded beyond its original five members to include Egypt, Ethiopia, Indonesia, Iran, and the UAE, with more countries seeking to join.
• Despite political and ideological differences, members agree global power favours the U.S. too heavily. Still, nations like India caution against giving BRICS an “anti-West” image.
• During the Rio summit 2025, BRICS leaders condemned unilateral tariffs, indirectly criticising U.S. trade policy.
• They also expressed concern over attacks on Iran’s civilian infrastructure, without directly naming Israel or the U.S., showing diplomatic restraint.