Trump’s Tariff Offensive Against BRICS

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Is Trump's tariff policy slowing down the BRICS, or is the alliance losing momentum due to the heterogeneity of its member countries?

Just in time for the 17th BRICS Summit on July 6 and 7 in Brazil, US President Donald Trump addressed the alliance with a threat: "Any Country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% tariff.” Trump did not elaborate on what exactly this supposed anti-Americanism entailed. Most of the current ten members and the associated countries responded to Trump's intimidation with defiance and composure, but also with bewilderment.

Let's look at four countries—Brazil, China, India, and Turkey—and their reactions. In addition to the aforementioned 10%, Trump has threatened additional tariffs of 50% on Brazil because former President Jair Bolsonaro is on trial for his attempted coup in January 2023. “This Trial should not be taking place,” Trump wrote. “It is a Witch Hunt that should end IMMEDIATELY!” Brazilian President Luiz Inácio Lula da Silva appeared unimpressed and accused Trump of acting like an "emperor." He promptly announced measures based on the principle of reciprocity and dismissed Trump's demand as "unacceptable blackmail." Anger at US politics is growing in Brazil. By what right does the US president interfere in Brazilian politics? However, the US remains an important trading partner for Brazil. Therefore, Lula pleaded for negotiations but only based on respect and equality. Brazil's political and economic relations with China are becoming increasingly important. Brazil tries to protect itself from trade dependence and intimidation by looking for other partners.

China is the economic and political heavyweight in the BRICS group. The country had been the focus of US tariff policy long before the BRICS summit and responded with a combination of resistance and countermeasures permitted under WTO rules. China accuses the US of “unilateralism, protectionism and economic bullying with tariffs.” China’s response let to a temporary willingness of the US to negotiate. The expected economic disruption prompted the Trump administration to agree to a “truce.” The mirror-image Chinese countermeasures, initiated with boldness, are a serious factor for the US due to China's economic potential. Both sides reduced selected tariff rates for a limited period of 90 days. The Chinese government emphasized that it would only conduct negotiations on a tariff arrangement on an equal footing. At the same time, China, like many other countries, has deliberately promoted existing export channels and looks for new trading partners.

India is arguably the most important outlier in the BRICS alliance. Unlike many other countries, India is not interested in further expanding its relations with China to avoid becoming dependent. The Indo-Chinese relationship is characterized by competition (especially in Asia) and conflict. The unresolved border demarcation between India and China in the Himalayas persists, most recently leading to military clashes with deaths on both sides in 2020.

However, relations with the US have grown increasingly close over the past two decades, and India is viewed by the US as a partner in the rivalry with China. The US and India even cooperate in security policy and armaments. When Trump expressed anger that BRICS might reduce dependence on the US dollar, Indian Foreign Minister Subrahmanyam Jaishankar assured that India had "absolutely no interest in undermining the dollar at all." Because India is by no means interested in replacing the dollar with the Chinese Renminbi. So far, the original BRICS ambitions to introduce its own currency have not borne fruit. BRICS members lack confidence in their partner countries' currencies. The Indian government's position is complicated. It is fully committed to a negotiated solution to the tariff conflict with the US but also does not want to alienate its BRICS partners, especially since India will host the BRICS summit next year.

Turkey is neither a BRICS member nor a partner country but applied for membership in September 2024. At the same time, Turkey remains committed to Western alliances, particularly as a NATO member. If admitted to BRICS, Turkey would be the first NATO country to become a BRICS member. This political ambivalence is quite intentional on the part of the Turkish government, corresponding to its strategic positioning between the West and the East, or the Global South. Through a skilful, geopolitically oriented foreign policy, Turkey has succeeded in gaining international influence and prestige in recent years.

Relations with China in particular have intensified, and since 2016, a currency agreement has existed between China and Turkey, specifically designed to strengthen their respective currencies against the dollar. Turkey thus pursues both political goals to broaden its political leeway, as well as economic goals. Turkey faces an economic crisis and is actively looking for new export opportunities through cooperation within BRICS. At the same time, it is quite successfully promoting investment in Turkey, making it clear to Western partners such as NATO and the EU that it has alternatives. Although Turkey's formal BRICS membership has not yet been decided, Turkey is already using this format to demonstrate the independence of its own foreign and trade policy.

The West, represented by the G7 countries, is falling further behind the BRICS countries economically. Nevertheless, not much remains of the BRICS narrative of a new world order. BRICS is anything but a coherent alliance or block. Of the ten BRICS countries, only Russia, China, Iran, and possibly Ethiopia share the clearly anti-American orientation. Brazil and South Africa, as well as India, are keen to maintain good economic and political relations with the US, albeit not at any price. The new members Egypt and the United Arab Emirates are closely allied with the USA on security policy issues. Indonesia, like India, pursues a balanced policy of non-alignment, aimed at avoiding becoming dependent on either the US or China.

The absence of Chinese President Xi Jinping and Russian President Vladimir Putin from the recent summit reflects the waning momentum of the BRICS political agenda. A Putin spokesman explained his absence by citing "certain difficulties," referring to the risk of Putin being arrested in Brazil, as an arrest warrant from the International Criminal Court remains pending against Putin.

Xi Jinping's no-show sent a clear political message. It was the first time the Chinese president had missed a BRICS summit since taking office. China had previously set the pace for the BRICS due to its political presence and economic power. Has China now lost interest now, since neither a common BRICS currency nor an anti-Western counter-model has yet materialized? Or could Trump's brutal tariff policy possibly lead to greater BRICS solidarity? Last year's BRICS expansion may have expanded the potential of the BRICS bloc, but at the same time it also highlighted the divergencies among BRIRCS members. The current state of the BRICS prompted Western media to call the summit a "meeting of the disunited."

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Herbert Wulf is a Professor of International Relations and former Director of the Bonn International Center for Conflict Studies (BICC). He is presently a Senior Fellow at BICC, an Adjunct Senior Researcher at the Institute for Development and Peace, University of Duisburg/Essen, Germany, and a Research Affiliate at the National Centre for Peace and Conflict Studies, University of Otago, New Zealand. He serves on the Scientific Council of SIPRI.