Recently, Trump’s remarks were like a bombshell, arousing widespread concern in the international community. He has threatened to impose 10 per cent tariffs on BRICS countries if they try to displace the US dollar’s global dominance. This kind of direct threat is not common in international politics, and it not only exposes the anxiety of the United States about the de-dollarization of the BRICS countries, but also indicates that the global economic landscape may be about to usher in a profound change.

Three events arouse anxiety in the United States

Trump’s fierce reaction is not without reason, and three recent events have made him feel more pressure than ever.

Ending the dollar at the BRICS Summit: On October 22, the leaders of the BRICS countries met in Russia to discuss ending the dominance of the dollar. The proposal of this issue is undoubtedly a direct challenge to the hegemony of the US dollar.

Financial cooperation between Iran and Russia: On November 11, the Central Bank of Iran announced that the banking networks of Iran and Russia have been officially connected, marking an important step in the cooperation between the two countries in the financial sector, providing practical financial support for de-dollarization.

Expansion of the RMB Cross-border Payment System (CIPS) : The RMB cross-border payment system has made significant achievements, with participants in more than 117 countries and regions and business coverage in 185 countries and regions around the world. This achievement not only enhances the international status of the renminbi, but also provides BRICS countries with a viable alternative payment scheme.

Although the share of intra-Brics transactions in global trade is still small, they are well positioned to move away from the dollar system when times change. Brics countries account for 45% of the world’s population, 37% of the world’s economic output, 44% of the world’s oil reserves, 53% of natural gas reserves, half of the world’s food production, and more than 40% of the manufacturing scale. These figures show that the BRICS countries have huge potential in terms of population, energy, food and manufacturing, which is enough to rival any economic alliance.

Trade among BRICS countries has been on an upward trend in recent years, but geopolitical developments such as the Russia-Ukraine war, ongoing trade tensions between China and the United States, and differences in political and economic interests among BRICS members are creating uncertainty. These challenges are particularly evident in industries such as textiles, where global supply chains are increasingly influenced by regional and international political dynamics.

In particular, continued sanctions against Russia, trade barriers, and supply chain disruptions have complicated the smooth flow of goods within the BRICS countries. While the BRICS countries have been pushing for a more balanced and multipolar global economic order, these geopolitical tensions have raised concerns about their ability to maintain robust trade relations.

Recent initiatives aimed at boosting internal trade, such as promoting the use of local currencies for transactions and increasing investment in key sectors such as textiles, agriculture and manufacturing, demonstrate the BRICS countries’ resilience and determination to strengthen mutual trade ties.

However, without addressing potential geopolitical frictions, the potential for greater economic cooperation within the BRICS could be limited. As the global economic landscape continues to evolve, the BRICS countries face a delicate balance between expanding trade and managing geopolitical realities that affect each member’s strategic priorities. Against this backdrop, the BRICS ‘future trade growth will largely depend on how it responds to these geopolitical challenges while promoting deeper economic cooperation among its different members.