BRICS Are No Threat to US Dollar Dominance, But Trump Is
Are the BRICS Countries increasing their clout?
Are the BRICS Countries Hard to Ignore? Increasing Their Economic Clout?
My answer is no. A Bloomberg columnist says yes. But he misses the real issue by a mile.
Please consider BRICS Is Getting Increasingly Hard to Ignore by Alan Crawford.
BRICS leaders hosted by Brazilian President Luiz Inácio Lula da Silva for a two-day summit smiled as they took on the West over issues of war and peace, trade and global governance.
The group adopted multiple positions at odds with Donald Trump, expressing “serious concerns” over trade tariffs, blasting soaring defense spending, and condemning airstrikes on Iran, a BRICS member.
It prompted an immediate reaction from the US president, who took to social media and threatened to slap an additional 10% levy on any country aligning themselves with “the Anti-American policies of BRICS.”
Until recently comprising five nations, BRICS has expanded to a club of 10 that defies easy categorization or a catchy acronym.
Its members are not all the best of buddies — India and China are open rivals, while Xi Jinping was one of four leaders who didn’t bother to attend. Saudi Arabia can’t decide if it’s in or out.
Critics say BRICS, which represents 49% of the world’s population and 39% of global GDP, perennially fails to punch its weight.
Unwieldy, it still refuses to go away. Countries are queueing up to participate as partners. Brazil hands over the presidency to heavyweight India.
As Trump sweeps all before him, BRICS — for all its shortcomings — is getting increasingly hard to ignore.
Easy to Ignore
It easy to mock the BRICS. Crawford even provided some of the ammo.
These nations have nothing in common, and the more nations one adds to the mix, the more unwieldy things become. The dysfunctional EU provides strong evidence.
I have been mocking BRICS statements since 2011.
2025 Joint Statement Farce
The 2025 BRICS Joint Statement is laughable.
“We voice serious concerns about the rise of unilateral tariff and non-tariff measures which distort trade and are inconsistent with WTO rules. In this context, we reiterate our support for the rules based, open, transparent, fair, inclusive, equitable, non-discriminatory, consensus-based multilateral trading system with the World Trade Organization (WTO) at its core, with special and differential treatment (S&DT) for its developing members.”
Lovely. I am for motherhood, apple pie, and a chicken in every pot.
But the only nation that can respond to Trump with actions of substance is China. That’s due to its rare earth element monopoly.
See Two-TACO Trump Day on His Call to Xi Over Rare Earth Elements for discussion.
Joint Statement Irony
China is the biggest offender of WTO rules in the world. So it is more than a bit ironic for China to be pointing fingers.
But Germany, the US, and EU are also big offenders.
Missing in Action
This year, the summit was void of Gold-backed BRICS talk and any discussion of how a BRICS trading currency might work.
Those were the big hype announcements from past summits. They were supposed to have happened by now.
Now, even the talk has vanished.
Trump Steps Up His Fight With Brics Nations
The Wall Street Journal reports Trump Steps Up His Fight With Brics Nations
Trump posted on social media that countries aligning themselves with “the Anti-American policies of Brics, will be charged an ADDITIONAL 10% Tariff.” The threat appeared to be a response to a statement put out by the group of emerging economies—whose members include Brazil, Russia, India, China, South Africa and others—that took a swipe at Trump’s policies.
Responding to Trump’s threats, a spokeswoman for China’s Foreign Ministry stated on Monday its oft-repeated line that trade wars and tariff wars have no winners. Brics “does not target any country.” The Kremlin echoed those remarks, saying that Brics “has never been and will never be directed against third countries.”
Brazilian President Luiz Inácio Lula da Silva urged countries in the Global South on Monday to work together to build a new development model that favors their economies.
Trumpian Irony
The irony of Trump’s nonsensical reciprocal tariff policy, enhanced by a direct BRICS threat, is that Trump will be the one to accelerate new trade models, not the BRICS.
Trump’s tariffs will open the door for more Chinese investment in Latin America and more trade between Latin America and China. The same two-way logic applies to Africa.
Meanwhile, Trump’s tariffs will decrease US trade with the rest of the world. China rates to be the biggest beneficiary and the US the biggest loser.
Trump fails to understand that US trade deficits result in increased foreign US dollar and asset holdings. Those US dollar holdings get invested in US treasuries, US equities, and direct foreign capital investment in the US.
Ultimately, Trump will reduce all three and US consumers will pay the price.
Conclusion
Ignore what BRICS are saying. Trump is responsible for what will happen next.
Near term, the most likely consequence is a global recession.
Stagflation in the US is not put of the question.
Related Posts
July 7, 2023: More Gold Backed BRIC Currency Silliness on Dethroning the Dollar
If Russia or China had a gold-backed BRIC, what would that even mean? Would you trust it? Buy it?
August 25, 2023: What Would it Take for a BRIC-Based Currency to Succeed?
Lost in the hype over nations clamoring to join the BRICS block is a question I have not seen anyone address.
February 4, 2024: Nonsense of the Day: BRICS to Create a New Credit Rating Agency
Let’s discuss the latest BRICS silliness starting with the definition of BRICS.
June 23, 2025: How Long Can the US Dollar Remain the Global Reserve Currency?
An article on the fundamental flaws with the euro triggered this post.
Synopsis Including Related Posts
A BRICS currency is no threat. A gold-backed BRICS currency is nonsense.
Trump will further the BRICS goal of reducing the role of the dollar in international transactions.
However, there is still no replacement for the dollar and no reserve currency replacement in sight. See the previous link for details.
A currency crisis await. Time unknown.
This post originated on MishTalk.Com
Thanks for Tuning In!
Mish
