financetom
World
financetom
/
World
/
COLUMN-Could Trump tariffs become BRIC-building blocks? McGeever
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
COLUMN-Could Trump tariffs become BRIC-building blocks? McGeever
Aug 7, 2025 5:55 PM

ORLANDO, Florida, Aug 7 (Reuters) - U.S. President

Donald Trump has the so-called 'BRIC' group of nations directly

in his trade war crosshairs, slapping super-high tariffs on

imports from Brazil and India, and accusing them of pursuing

"anti-American" policies.

Washington's relations with Brasilia and New Delhi have sunk

to new lows. But this belligerence could backfire.

The White House said on Wednesday that it will impose an

additional 25% tariff on goods from India, citing New Delhi's

continued imports of Russian oil. That brings the levy on most

goods to 50%, among the highest rate faced by any U.S. trading

partner.

Brazil also faces 50% tariffs on many of its U.S.-bound

exports, not because of trade imbalances, but because of Trump's

anger at what he calls a "witch hunt" against his ally, Brazil's

former President Jair Bolsonaro, who has been charged with

plotting a coup following his election loss in 2022.

This breakdown in relations could be Trump's intention: push

these countries to the brink so that they'll agree to trade

deals that are heavily lopsided in Washington's favor. That

strategy seemed to work with Japan and the European Union.

But hitting these 'BRICS' economies with eye-watering

tariffs could push them closer together, strengthening the

resolve of a group that appeared to be losing whatever momentum,

purpose and unity it had.

THE 50% CLUB

The original BRIC nations - Brazil, Russia, India and China

- held their first summit in 2009, eight years after former

Goldman Sachs economist Jim O'Neill coined the acronym for this

group of emerging economies he said would challenge the G7 group

of rich countries in the future.

South Africa became the 'S' in BRICS two years later, and

the club now comprises 11 countries including Indonesia, Iran

and Saudi Arabia, as well as a further nine 'partner' countries

including Malaysia, Nigeria, and Thailand.

It was always a disparate group - geographically,

economically, culturally, and politically - meaning its

cohesiveness has always been questionable. Its relations have

sometimes been rocky, particularly among its largest members.

That's why it was so notable when Indian Prime Minister

Narendra Modi on Wednesday announced that he will visit China

for the first time in over seven years. This could be a sign

that rising tensions with Washington are helping to thaw frosty

ties between New Delhi and Beijing.

Also on Wednesday, Brazil's President Luiz Inacio Lula da

Silva told Reuters that he plans to call the leaders of India

and China to discuss a joint BRICS response to Trump's tariffs.

"I'm going to try to discuss with them about how each one is

doing in this situation ... so we can make a decision," Lula

said. "It's important to remember that the BRICS have ten

countries at the G20," he added, referring to the group that

gathers 20 of the world's biggest economies.

UNITED FRONT

While nothing unites like a common enemy, the differences

between the BRICS countries could limit how solid that front can

actually be.

Stephen Jen, CEO and co-CIO of Eurizon SLJ Asset Management

in London, posits that trade links between the five core BRICS

nations - never mind the historical, political and cultural ties

- are weak.

Only 14% of their trade is with each other. Russia and

Brazil may have higher levels of intra-BRICS trade, but only 9%

of China's exports are BRICS-bound, significantly less than the

19% that goes to emerging Asia and 15% destined for the U.S. And

in economic, political and military terms, China matters far

more than the others on the global stage.

"BRICS is more of an alliance on paper, not in reality," Jen

says.

But there are signs that intra-BRICS trade is strengthening.

China-Russia trade was a record $244.8 billion last year, and

China and India are the biggest two buyers of Russian oil. China

is Brazil's largest trading partner, accounting for 28% of

Brazil's exports and 24% of its imports. Roughly 70% of China's

soybean imports are from Brazil.

TENUOUS ALLIANCE

Trump's tariffs could push BRICS countries closer together

in the near term, in areas such as trade, investment, and

currency usage. They may feel it's in their economic interests

and, for some, in their political interests, to present a united

front.

How long that front can hold is anyone's guess. These

countries, particularly India, may resist moving further under

China's influence, and Russia's pariah status could limit

further integration beyond commodity imports.

In the meantime, however, Trump's tariff salvos are

BRICS-bound. How these emerging economies respond could be an

indication of whether we may truly be seeing a reshuffling of

global alliances.

(The opinions expressed here are those of the author, a

columnist for Reuters)

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Bank of Korea vows to keep markets stable Yoon impeachment
Bank of Korea vows to keep markets stable Yoon impeachment
Dec 14, 2024
SEOUL, Dec 15 (Reuters) - South Korea's central bank vowed on Sunday vows to keep markets stable after South Korean President Yoon Suk Yeol was impeached over his brief imposition of martial law. The Bank of Korea said in a statement that it would use all available policy instruments in conjunction with the government to respond to and avert any...
CANADA-CRUDE-Discount on Western Canada Select heavy crude narrows
CANADA-CRUDE-Discount on Western Canada Select heavy crude narrows
Dec 13, 2024
Dec 13 (Reuters) - The discount on Western Canada Select (WCS) heavy crude versus the North American benchmark West Texas Intermediate (WTI) tightened on Friday: * WCS for January delivery in Hardisty, Alberta, settled at $12.20 a barrel under the WTI benchmark, according to brokerage CalRock, having settled at $12.55 a barrel under the U.S. benchmark on Thursday. * Global...
Bank of Korea vows to keep markets stable after Yoon impeachment
Bank of Korea vows to keep markets stable after Yoon impeachment
Dec 14, 2024
SEOUL, Dec 15 (Reuters) - South Korea's central bank vowed on Sunday vows to keep markets stable after South Korean President Yoon Suk Yeol was impeached over his brief imposition of martial law. The Bank of Korea said in a statement that it would use all available policy instruments in conjunction with the government to respond to and avert any...
CANADA STOCKS-TSX hits 3-week low as weekly winning streak ends
CANADA STOCKS-TSX hits 3-week low as weekly winning streak ends
Dec 13, 2024
* TSX ends down 0.5% at 25,274.30 * Posts its lowest closing level since Nov. 20 * Materials group loses 1.7% as metal prices fall * Enghouse Systems ( EGHSF ) falls 12.9% after revenue miss (Updates at market close) By Fergal Smith Dec 13 (Reuters) - Canada's main stock index fell to a three-week low on Friday as a...
Copyright 2023-2025 - www.financetom.com All Rights Reserved