Trump’s Economic Coercion Is Quietly Strengthening BRICS

United States President Donald Trump has made no secret of his hostility toward BRICS.

Last year, he threatened an additional 10 percent tariff on any country aligning itself with what he described as the bloc’s “anti-American policies.” Since then, his administration has continued to deploy tariffs aggressively against trading partners, including BRICS members such as Brazil, India, and China.

The message appears straightforward: Countries that challenge US economic power should expect to pay a price.

But coercion carries consequences. As BRICS leaders convene in New Delhi today, Trump may be reinforcing precisely the incentives that made the bloc appealing in the first place. The more Washington demonstrates its willingness to exploit access to its markets, its financial system, and the dollar as tools of political leverage, the greater the motivation for other nations to diversify away from them.

This does not mean BRICS is evolving into an anti-US alliance. Far from it.

The bloc’s 11 members — Brazil, China, Egypt, Ethiopia, India, Indonesia, Iran, Russia, Saudi Arabia, South Africa, and the United Arab Emirates — harbor vast political and economic differences. Collectively, they represent nearly half the world’s population and roughly 40 percent of global GDP, yet they share no common ideology, security policy, or unified geopolitical orientation.

Recent events have underscored those divisions. Iran, Saudi Arabia, and the UAE currently find themselves on opposing sides of an escalating regional conflict. In May, Iranian and Emirati delegates exchanged sharp words during a foreign ministers’ meeting in New Delhi. India and China remain locked in a tense border dispute that led to deadly clashes in 2020–2021, and only in the past two years have relations begun to stabilize.

So Trump is not forging a united geopolitical front against Washington.

He may, however, be providing countries with otherwise divergent interests a shared economic incentive to cooperate: protection against vulnerability to US power.

For nations outside the Western core, reliance on US-centered economic infrastructure presents real risks.

The dollar’s centrality grants the United States enormous structural advantages. International transactions flow through financial institutions subject to US jurisdiction; access to US markets can be abruptly curtailed; sanctions can sever governments and companies from segments of the global financial system.

BRICS efforts to reduce dependence on the US financial system do not signal that the dollar is on the verge of losing its status as the global reserve currency. This assertion is frequently raised around BRICS summits, typically accompanied by sensational predictions of a new BRICS currency. The evidence does not support it.

The dollar remains overwhelmingly dominant. According to the International Monetary Fund, it accounted for 57.1 percent of global foreign-exchange reserves in the first quarter of 2026. The Chinese renminbi accounted for just 2 percent. Indeed, the dollar’s share edged higher during that quarter.

But replacing the dollar and reducing dependence on it are two fundamentally different objectives.

BRICS countries are already pursuing the latter. South Africa has connected to China’s Cross-Border Interbank Payment System, enabling direct renminbi-settled transactions with China. Brazil and China are increasingly using their own currencies in bilateral trade, while India and the UAE have settled transactions in rupees and dirhams. China and Russia have shifted a significant portion of their bilateral trade into national currencies.

BRICS itself is also advancing cautiously toward deeper financial connectivity.

Last year, its leaders called for continued work on a cross-border payments initiative and greater interoperability among members’ payment systems. In August, Reserve Bank of India Governor Sanjay Malhotra confirmed that BRICS countries are discussing the linking of their fast-payment networks and potentially their central bank digital currencies. India is also promoting greater use of the rupee in international trade.

The New Development Bank provides another illustration. Established by the original BRICS nations as an alternative source of development finance, it has adopted lending in members’ currencies as an explicit strategic objective. Its current strategy targets 30 percent of financing in local currencies, partly to shield borrowers from foreign-exchange risks and expensive currency swaps; that figure could rise to 40–50 percent in the next cycle, covering 2027–2031.

None of this amounts to a rival global financial system. Much of it remains experimental, bilateral, or limited in scale.

But that is precisely why the fixation on whether BRICS can “replace” the dollar misidentifies what is occurring. The more consequential development is the gradual construction of options that allow governments and businesses to conduct a growing number of transactions without relying on the dollar and Western-dominated financial infrastructure.

Trump’s policies lend this process additional urgency.

Consider Brazil. Washington imposed a new 25 percent tariff on a range of Brazilian products in July, affecting billions of dollars in exports, despite the United States running a trade surplus with the country. The Trump administration has also scrutinized Brazil’s highly successful Pix instant-payment system, which competes with established card-payment networks.

Sanctions demonstrate the same vulnerability in starker terms. Russia and Iran have been driven toward alternative payment and trading arrangements precisely because their access to Western financial networks has been restricted. Washington is now considering further measures that could penalize countries heavily reliant on Russian energy, including China and India.

No BRICS member needs to sympathize with Moscow or Tehran to grasp the implications.

US financial power rests not simply on possessing the world’s largest economy or issuing its dominant currency. It also depends on other countries continuing to view participation in a US-centered system as more beneficial than the alternatives.

The more frequently Washington converts that system into an instrument of coercion, the stronger the incentive to build escape routes from it.

That said, most BRICS countries do not appear eager to swap dependence on Washington for dependence on Beijing.

India maintains extensive relations with the United States while purchasing Russian energy and pursuing closer economic cooperation within BRICS. Brazil has long sought greater autonomy without becoming a Chinese satellite. Saudi Arabia and the UAE remain deeply intertwined with Western economies even as they expand relationships with China.

Their objective is less likely to be replacing one hegemon with another than enhancing their ability to maneuver between competing centers of power.

That distinction matters. A trade transaction settled in rupees, a loan denominated in renminbi or rand, or a payment routed through a system that does not depend on the same Western intermediaries will not topple dollar dominance.

But multiply such arrangements across countries and over time, and they begin to reduce the costs of saying no to Washington.

This is why portraying BRICS simply as an anti-US threat risks becoming self-defeating. Punishing countries for seeking alternatives gives them yet another reason to develop those alternatives.

Trump wants to make challenging US power costly. Instead, he may be making dependence on US power costlier still.

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