Aggressive Tariffs Fuel BRICS’ Strategic Push Toward Dollar-Free Trade
Ruta Deshpande, Deftech Analyst, Regtech Times, 4/6/25
he BRICS group of nations—Brazil, Russia, India, China, and South Africa—has long aimed to challenge Western-controlled financial systems and reduce the world’s reliance on the US dollar. Now, that mission is getting an unexpected push, thanks to new tariff policies introduced by US President Donald Trump.
BRICS Bloc Gains Momentum Amid US Trade Setbacks
Trump has declared what he calls “Liberation Day,” a move that marks one of the biggest protectionist trade shifts since the 1930s. These new tariffs target both enemies and allies, and are expected to slow trade, increase prices in the US, and put brakes on global economic growth.
While the US is pulling away from its international trading partners, BRICS is pulling closer. The group is already deepening its economic ties and expanding its influence.
At their October 2024 summit in Kazan, Russia, the bloc welcomed four new members: Egypt, Ethiopia, Iran, and the United Arab Emirates (UAE). In January 2025, Indonesia also joined the coalition. That makes a total of ten full members. Several other countries, such as Turkey and Saudi Arabia, have either shown interest or are in line to join as partner states.
Political experts Stewart Patrick and Erica Hogan, from the Carnegie Endowment for International Peace, noted that the BRICS expansion represents a shift in global power, giving more voice to countries outside the traditional Western power structure. Although the full impact of this expansion is still taking shape, the numbers already show strength: BRICS countries make up nearly half of the world’s population and contribute over 35% of global economic output when adjusted for purchasing power.
US Policy Shift
The contrast between the US and BRICS is sharp. Trump’s government is moving towards isolation. A new US foreign policy strategy, introduced in March 2025 by Defense Secretary Pete Hegseth, outlines a plan for the US to reduce international cooperation and shift to a more “transactional” world order. Meanwhile, BRICS is promoting open trade and mutual development.
Russian President Vladimir Putin and Chinese President Xi Jinping highlighted their shared belief in fair international relations. They stressed two main ideas: no more “neo-colonialism and hegemonism,” and a global order built around the rules of the United Nations.
BRICS has already built a strong foundation for international cooperation. The group formed the New Development Bank (NDB) in 2015 to support infrastructure and development, with $50 billion in startup funding. Another institution, the Contingent Reserve Arrangement (CRA), was created in 2014 with $100 billion to help member nations facing financial trouble. These tools allow BRICS countries to support one another without depending on Western institutions like the International Monetary Fund (IMF).
Although the BRICS bloc has not yet built a complete free trade agreement (FTA) among all its members, they have taken steps in that direction. Many countries in the group already use regional FTAs through other platforms, such as the Gulf Cooperation Council. What’s missing is a single, unified trade deal covering all members—but that effort is now gaining speed.
Currency Shift and Tariffs Trigger Cooperation
Bloc Accelerates Efforts to Reduce Reliance on the US Dollar by developing “BRICS Pay,” a digital payment system using national currencies. Announced at the Kazan summit, this system would allow direct trade among member countries without involving the dollar.
Some members, like China and Russia, already trade using the yuan and ruble. However, the system works best when trade is balanced, posing challenges for pairs like Russia and India. Still, BRICS sees this as a step toward building a stronger, independent economic structure.
Donald Trump’s return to office has intensified these moves. In a Truth Social post, he threatened 100% tariffs on countries moving away from the dollar and warned BRICS against launching alternative currencies. Despite this, BRICS continues expanding trade ties, especially with Global South nations seeking new partnerships.
The BRICS+ alliance, now with ten members, is becoming more organized—forming working groups on energy, health, climate, and trade. While India pushes for cautious expansion, China and Russia advocate faster growth. Xi Jinping recently stated BRICS is open to all willing partners, reinforcing the bloc’s inclusive vision.