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.
Do the G7 countries have anything in common?
The Brics countries are a restart of the non-aligned movement.
All these countries are impacted by multi-lateral international institutions based on the post-ww2 colonial powers, and too much representation by Western countries.
Brics is not a trade block or a military alliance or a currency union.
It is a forum.
De-dollarization is not a goal.
But it is a goal to skirt as much as possible the controlling tentacles of US and Western control, including facilitating trade which illegal (under international law) sanctions & sieges try to interdict.
Maybe not today but give BRICS about 10 more years.
This idea of laughing BRICS off is what put us behind the 8-ball with China.
You don’t take them seriously and then all of a sudden BAAM! . . . they’re out innovating you.
Phase of the cycle will bring the demise of the dollar. The guns and butter of the 1960’s brought an end the U.S. peg to gold. It took time for the pressure to become too great to stay on the gold standard anymore. No one saw the day of Nixon going to China. No one sees China after Xi. Days can last years and years can happen in days. All that is needed is an inflection point we cannot yet see.
There’s always so much talk of replacing the dollar, but never much about what it’ll be replaced with. I think it’s pretty obvious the dollar isn’t what it was in 1990, and while it’s not over the hill right this instant I don’t see it being the single world currency for too much longer (10-30 years or so). Especially not if Trump continues savagely burning away the goodwill anyone has towards us and destabilizing the nation to a possible breaking point. Troops fighting in the streets/Kent State 2.0 = dollar rout at best.
So back to replacing the buck. It’s an issue because nobody wants to get stuck being the reserve currency, right? China needs their yen diluted, Europe doesn’t want to put that on the Euro, ect. Given that it’s a yoke nobody seems to want, I think there’s a real argument to be made for some kind of stablecoin managed by an international effort.
Having a currency be stateless solves the age old issues with pegging everything to a currency controlled by a single nation, and makes it impossible for nannystaters and morons like Trump to crash. The dollar was close to this thanks to it being a Fed thing and not a government thing, but it’s still capable of being influenced by a would be dictator in the same country. One who seems genuinely open to trying to arrest Powell as of today’s congressional inquiry plot.
I don’t care if it’s a hot take: The world economy is way too big to keep centralized enough for a single rogue state to be capable of wrecking it. By running this country into the ground on the phrase “America first”, Trump is quickly setting up next generation systems to specifically put America on even ground for the sake of sanity.
The US bond market is the largest in the world. China growing bond market is much smaller. The US bond market is about 40% of the global market. Traders don’t trust the crooked Chinese bond market. When inflation rises the bond vigilantes demand higher rates. Much higher than10Y @5%. Traders in Japan, the EU are buying bills, notes and bonds, pd in US dollars, not in RMB, making money on the spread. The primary dealers are selling bills, notes and bonds to other banks and to the shadow banks. The Fed is buying bills, notes and bonds
directly from them to fund gov debt. JP is their biggest buyer. When the primary dealers suspect troubles they stop lending to other banks and shadow banks. A clogged O/N market – no flow – can cause heart attacks and strokes. Fed interventions saved the financial market many times, before, in between and after 2008 and 2020.
SEPTEMPER 17, 2019 all over again, BABY!
Look who’s coming for your treasuries: ON RRP
I remember reading about twice a week in the fall of 2019 that the Fed was injecting tens of billions in liquidity. It turned out to be something like $400B over 3 months until things calmed down.
“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. (Thank you sir for stating that fact)
“But Germany, the US, and EU are also big offenders.” True, but just trying to save what industries they can.
The answer to international currency exchange is The Bancor as envisioned after WW II and as Steve Keen shows here: https://profstevekeen.substack.com/p/support-me-by-watching-my-latest
The economic answer to every nation’s domestic economy is the new monetary paradigm of Direct and Reciprocal Monetary Gifting is my book Wisdomics-Gracenomics.
Whether it’s BRICS or the Ukraine, Mish never fails to be out of kilter outside the West.
The trade deficit is a consequence of excessive Dollar supremacy policies. To make the Dollar supreme we had to become by far the largest the buyer of other’s goods surpluses.
This economics imbecile actually believes that the targeted countries pay the tariffs.
Economic illiteracy: ignorance truly is bliss. Throw it on the wall and see what sticks.
The network effects of the US dollar were built up over 100+ years of performance and hard-won achievements. Trump’s jawboning and antics just seem ephemeral to that, though he seems to be doing his best to deconstruct it.
i think you have missed the point. the brics nations are no longer trying to create a new currency, if indeed they ever were. the goal is to settle transactions in their own currencies. in this they are well on their way to success. why should china and india, for example, have to buy dollars in order to settle their trades with each other?
bypassing the dollar in settlement of transactions is a very serious threat to u.s. hegemony whether you realize it or not. the u.s. has just two basic exports: military hardware and dollars with dollars being by far the most important. without creating and maintaining a demand for dollars to settle debts the dominance of the u.s. is gone. what other leverage do we have?
Businesses and people trade with each other. Countries don’t trade with each other. So China and India don’t buy dollars in order to settle trades.
So if you are a farmer in India who sells food to China and you get Yuan in return what do you think they are going to do with the Yuan? They are going to exchange it and that means dollars because the most stable currency is dollars (not Yuan or Rupees or whatever else there is).
Yes, China and India buy dollars to settle the trade done between their businesses and people with foreign businesses and people. That’s called capital controls.
Texas Time gets to the heart of the matter as to why a trading currency makes no sense.
I have discussed that in my posts many times.
Nations do not trade with each other.
And many times you showed that you do not know about the legal framework for foreign trade in other countries. Cue: capital controls.
Capital controls is just a sophistry.
Legally and logically, a business anywhere turns dollars/euro/yuan into local currency with which it pays its bills.
Why not just exchange it for the local currency, in this case Rupees?
Funny, no talks about a gold backed BRICS currency. Of course, NOT! The point of building the gold reserves, now and to understand that these BRICS nations are stock piling Gold and many more commodities. Is enough to say: the US dollar is slowly losing ground, value or faith. The process is slow. The dollar demise will not occur over night. ALL BRICSnnations are preparing themselves, to hold value and to be capable to move on…..
Move on?
Move on from what? When? No one knows. The catalyst(s) of the pivot to moving on. Will likely be in the realms of more QE and or when the GDP to debt ratio reaches 200 to 210%.
If and when the US debt reaches this point of UNPRODUCTIVITY, will the moving on will occur. The FED will continue to defend the dollar and support it, cleverly…. though for how much longer? 2 years? 10?
We will see
By trying to have his cake and eat it too, Trump is accelerating the trends that he doesn’t want.
In recessions DXY rises, the stock markets and commodities plunge.
????? All they need to do is get away from the dollar and US economy through trade with each other. Whether gold or yuan or crypto or barter or CIPS or local currencies, it doesn’t matter. That is all they need to do and they are doing it.
The US and the EU are 60% of the global trade. We don’t barter. North Korea bartered soldiers for oil. Russia and China barter oil for ev and drones. The Gulf states trade will decline. S. Korea, Japan, Germany and the UK will build factories in the US, to sell stuff, while avoiding tariffs. They will have to buy dollars to invest. We will buy less and less from China. The real RMB deflated. Centrifugal forces might break China apart.
i.m 75 years old and i have been hearing and reading about how china is about to collapse since i was in high school. we buy less from china because others buy more. don’t hold your breath waiting for “centrifugal forces” to break china apart.
Don’t the BRICs and EU pose a credible threat to raise counter tariffs on US agriculture products? Hitting Republican states hard politically and economic?
BRICS other than China and perhaps India are irrelevant.
Yes China can retaliate.
China is fighting back bc Trump is trying to dismantle a rising opponent.
China shipped anti aircraft missile batteries for oil, instead of ev cars, electronic equipment and chemicals. DXY is rising. Bibi dismantle the evil axis: China, Russia and Iran. China is trying to build a new silk road: China, Iran, Syria, Turkey and Europe. Mt Hermon (9,300 feet) is a bone in the throat.
Pretty much hits the nail on the head.
Trump is just making it easier for the BRICS long term . . . The global Recession has already started it kicked off in Europe . . . and it will be worse than a Recession . . .