Trade and Tariff || New weapon in the struggle for global order

Just hours after the BRICS summit concluded in Rio de Janeiro with a defiant call for global trade reform and a multipolar world, US President, Donald Trump reignited his trademark economic aggression, threatening an additional 10% tariff on all imports from countries aligning themselves with BRICS’ so-called “anti-American” policies.

“There will be no exceptions to this policy,” he warned, in a statement that rippled across global markets and diplomatic circles alike. It all started as a disagreement over tariffs but has quickly grown into a bigger clash, one that is both economic and ideological, between the United States and a now more confident group of rising economies.

In another move, Donald Trump has now turned his trade ire toward Brazil. In a social media post unveiling his latest tariff proposal, Trump declared plans to impose a 50% tax on Brazilian-made goods, accusing the country of targeting U.S. tech firms and orchestrating a political vendetta against former president Jair Bolsonaro. The move adds a sharp edge to the growing divide, especially as Bolsonaro faces prosecution over alleged efforts to overturn the 2022 election. Brazilian President Luiz Inácio Lula da Silva responded by vowing reciprocal measures and rejecting any perceived interference in the country’s judiciary.

The recent BRICS summit at Rio, Brazil, that earlier looked like it would be symbolic, now seems to mark a real shift in global power. Reading the Rio Declaration speaks volumes about what these countries have thought of their future plans. Trump’s latest action is not new. In his first term, he often used tariffs to pressure other countries, especially during the trade war with China. But this time, the difference is that the challenge is coming from BRICS as a united group, not just one country.

BRICS came into existence in 2009 with four countries, Brazil, Russia, India, and China. The BRICS bloc has since expanded to include South Africa, Egypt, Ethiopia, Iran, Indonesia, and the UAE. At this year’s summit, the group adopted its strongest ever language on global governance, calling for reforms in the UN Security Council and a diminished reliance on the U.S. dollar in international trade. Trump’s tariff threat specifically targets countries embracing such initiatives. His July 6 post on Truth Social made that clear: “Any country aligning themselves with the anti-American policies of BRICS will be charged an additional 10% tariff.”

The timing was no accident. Just hours earlier, BRICS had issued a joint declaration warning against unilateral tariffs and protectionism, claiming such actions distort trade and are inconsistent with WTO rules. Trump’s counterstrike reveals not just a disagreement over trade but a strategic attempt to contain the rise of a counterbalance to U.S. hegemony.

Led vocally by Brazil’s President Luiz Inácio Lula da Silva, this year’s summit emphasised the Global South’s desire for independent development pathways, less dominated by U.S.-centric institutions. The Rio Declaration proposed trade in local currencies, an expansion of the BRICS New Development Bank, and alternative digital infrastructure, clear signals that the bloc is preparing to diversify away from dollar dependency. “We don’t want an emperor,” Lula said, dismissing Trump’s threats. “This is a set of countries that wants to find another way of organising the world from the economic perspective.”

China’s Foreign Ministry echoed that sentiment. Spokesperson Mao Ning emphasised that BRICS “does not target any country” and that “protectionism leads nowhere.” Russian officials, too, denied that the bloc was “anti-American,” arguing instead that it represents a “shared worldview” for multipolar cooperation. But these assurances are unlikely to soften Washington or Trump. While Trump’s rhetoric may be framed as a defence of American workers, it is also a high-risk gamble. As of April 2025, the U.S. had already imposed base tariffs. The implementation is delayed, but the new date is August 1, which may involve some minor adjustments in negotiations with respective countries. One of the economists observing the fluid situation said that Trump plans to pressure these economies into backing away from BRICS or risk losing access to the American market. It is a textbook case of using economic coercion to stifle geopolitical competition.

But it may backfire. Most BRICS countries are already deeply integrated into global supply chains. Tariffs may cause inflationary pressure inside the U.S., particularly in sectors reliant on imports from India, Brazil, or Southeast Asia. Investors, wary of sudden reversals, have taken to what Financial Times columnist Robert Armstrong dubbed the “TACO trade”—Trump Always Chickens Out. Markets dip when tariffs are announced, and rebound on the assumption that Trump will back off. Yet this time, he may be serious. What makes this episode more than just another Trumpian spectacle is how clearly it marks the collision of two global visions. The U.S., still the world’s largest economy and military power, wants to preserve a system where access to its market is conditioned on ideological alignment. Trump has long argued that America must punish those who challenge the dollar or join institutions that exclude U.S. influence.

But BRICS is no longer a loose association of emerging markets. With expanded membership and partnerships with more than 30 countries, it now represents nearly 40% of global GDP and a quarter of all international trade. The bloc’s advocacy for multilateralism, currency diversification, and reform of global institutions resonates with much of the Global South. For many developing countries, BRICS offers a political space that reflects their aspirations, from permanent UNSC seats for India and Brazil to an international monetary system less beholden to Washington. Lula, Xi Jinping, and other BRICS leaders appear to be betting that the future belongs to a more distributed power structure, where influence is not wielded solely through Wall Street or Washington consensus. Some political analysts view that Trump’s attempt to isolate BRICS-aligned economies could instead accelerate their integration. If these countries continue to facing trade barriers from the West, they have no other way but to look for alternatives and deepen internal cooperation. They may invest more aggressively in alternatives like the BRICS Bank, and push for settlement mechanisms in local currencies. As geopolitical coercion mounts, so does the motivation to build resilience.

For the Global South, countries once hesitant to openly side with BRICS may now do so out of necessity, not ideology. Tariffs will hurt, but so will economic dependency without sovereignty. From Malaysia to Nigeria, Kazakhstan to Vietnam, dozens of countries are watching the BRICS-U.S. confrontation as a bellwether for the future of global governance. Even within BRICS, however, cohesion is not guaranteed. India, a key U.S. partner in the Indo-Pacific, has remained silent so far but are going to take the rotating leadership of the BRICS next year. Trade negotiations between the US and India may be announced soon. So far, India is included in the 26% tariff bracket.  That may alter New Delhi’s calculus over time if no solution is visible in the negotiations.  Also, five-nation visits by the Prime Minister last week to Africa and Latin America have their strategy and geopolitical message between the lines.

With Trump’s tariff threats escalating and the BRICS bloc solidifying its platform for a new world order, the coming months and years could reshape international economics and diplomacy in profound ways. This is not merely a trade spat. It is a contest over the architecture of the 21st-century global system. Washington still commands unmatched leverage, but its reliance on punitive tariffs, financial sanctions, and unilateralism is losing moral legitimacy, and it seems the country is already much saturated and overburdened. BRICS, for its part, remains new, a work in progress, developing, but one increasingly defined by shared resolve and rising credibility.

The world is watching whether economic coercion can halt the tide of a multipolar world. Judging by the tone in Rio and the flurry of diplomatic activity across Africa, Asia, and Latin America, the answer may not be what Washington wants to hear. The tariff war has begun. But the bigger battle is over global influence—and who gets to shape the rules of the game as tariffs still remain under negotiation; markets expect further country-specific exemptions or escalation based on geopolitical alignment.